More than 20 million roubles in expenditures, 98 administrative procedures, and a thousand days are needed to overcome government barriers in the Russian residential construction sector.

These staggering figures were announced at a public hearing organized by the Public Council of the Rosreestr (Federal Service for State Registration, Cadastre, and Cartography is a federal executive body responsible for the state registration of rights to real estate and the transactions thereof).

Opening the hearing, the head of the Public Council, Chairman of the Russian Chamber of Commerce for Entrepreneurship in commercial property Oleg Skufinsky noted that the assessment of the level of administrative barriers in housing has been prepared by the National Association of Builders and the Institute of Economics.

The speakers at the hearings included the head of the National Association of Builders Mikhail Viktorov, the president of the Institute for Urban Economics Nadezhda Kosareva, the CEO of the Institute of territorial Planning Anna Beregovskikh, the deputy head of the Federal Registration Service Sergey Sapelnikov, and the head of the Public Council of the Rosreestr, Chairman of the Russian Chamber of Commerce and Entrepreneurship for commercial property Oleg Skufinsky.

The monitoring of administrative barriers in housing was conducted in 43 cities of Russia and the analysis assessed the number of required administrative procedures, the cost of implementation, and timing. The studies found it imperative to reduce administrative procedures, starting with the preparation of land use and urban planning and finishing with the phase of state cadastral registration and the registration of ownership rights to real estate.

The registration of rights to real estate is not a difficult procedure, especially since the Russian registry, where possible, is trying to move to an electronic platform. Much more time and effort is spent on the procedure relating to the solution of problems surrounding gas, heat, and electricity service installation, as well as to overcoming procedural obstacles created by local governing authorities. The speakers at the meeting observed that the time range is long, and there are a number of additional costs, since it is necessary to speed decision-making, which often is accomplished with the payment of bribes.

In general, as shown by the results of the monitoring, in about a thousand days, and with the spending of 20 million roubles in the course of 98 administrative procedures, would a development company be able to register a residential project. Only a third of the administrative procedures are taken at the federal level, with the rest being largely excessive and burdensome. Doing away with those procedures would allow for saving not only money, but also time – more than 700 days.

The registration term for primary ownership varies depending on the region from 7.3 to 60 days. The high costs of the registration itself – 15,000 roubles per each apartment – may run into a large sum if a building with a few hundred apartments is being built. All these and other costs, of course, then are shifted to the buyers.

A great deal of questions concerned the idea of the legislative introduction of mandatory registration of notarial transactions. These services to be rendered by notaries are expected to generate costs equal to a percentage of the market value of the real estate object sought to be registered, which will inevitably create a great challenge for the vast majority of citizens. During the hearing, it was decided to address this pressing topic at a separate discussion to analyze all aspects of the issue, which can seriously complicate the lives of both citizens, who are trying to solve their housing problems, and entrepreneurs. The panelists discussed whether the removal of administrative barriers in construction is an inter-agency problem, or whether it must be solved systemically. The forum concluded that the country should develop a single comprehensive strategy for the creation of urban policy and land and property relations in the long term.

Deputy Head of the Russian Registry Sergey Sapelnikov described the efforts of authorities to develop e-services. In this effort, the Moscow, the Rostov, the Orenburg region, and the republic of Khakassia were well ahead of the others at the end of 2011. Centralized state real estate records, which is the federal government’s information resource, is publicly available. As for the ownership of land, now almost one hundred percent of all registrations can be done electronically. Among other things, electronic registration is an important tactic in the fight against corruption. The official does not have the documents in his hands and, therefore he cannot allow, deny, or delay access to them.

During the discussion, it was suggested that the registration of property rights to real estate should not last longer than five days. The representative of the Rosreest said that in technical terms the organization is ready to move to an electronic register altogether, but the State Duma must pass corresponding legislative measures.

A suggestion was made to arrange for separate windows for legal entities with the purpose of accelerating the registration process. Still, the delegates decided that legal and natural persons are equal before the law, and the waiting line for businesses cannot be separate. The acceleratation of the transition to an electronic system can eliminate the waiting line.

In conclusion, the Chairman of the public hearing of the Public Council of the Rosreestr, chairman of the Russian Chamber of Commerce and Entrepreneurship for commercial property Oleg Skufinsky decided to draft a roadmap for optimizing procedures for property registering, aimed at simplifying the state registration of ownership and improving Russia’s position in the ranking of investment attractiveness of the World Bank.

To date, the first four roadmaps for national entrepreneurial initiatives to improve the investment climate in the country have been prepared and approved by the Prime Minister in the following areas of state regulation of construction: customs administration, the connection to communications networks, and international trade. These and other factors affect the conduct of business, and are used in determining the country’s place in the international ranking of the economies of 183 countries.

World Bank’s ratings for conditions for entrepreneurship “Doing Business 2012” showed that Russian reforms to simplify the registration of property rights have not gone unnoticed: Russia rose from the 51st place to the 45th place. By 2018, the country aims to climb to the fourth place. To do this, it is important to realize the systematic measures envisaged in the roadmap that will reduce the number of procedures for registering property five times and reduce the number of days eight-fold from 43 to five days.

Oleg Skufinsky is convinced that in the fall the roadmap will be prepared and proposed to the government of the Russian Federation. Its implementation would ensure that by 2018, a maximum of five days would be needed for the registration of rights to real estate, making the price for the service acceptable to customers.