State land privatisation with payment in instalments

7/8/2003 | 12:00 AM

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TALLINN, 8 July 2003 - The state is offering to privatise state land payable in instalments over 5-15 years, in exceptional cases also up to 50 years. The aim is a more effective use of land through transfer of land into private ownership. The SAO audited land privatisation with payment in instalments, using the County Governments of Viljandi, Pärnu and Lääne-Viru as examples.

On the basis of the audit, the SAO finds that the activity of the county governors acting as mortgagees has been satisfactory. However, the state’s activity in regulating the process as a whole has been unsatisfactory. Although land privatisation by payment in instalments is coming to an end, the protection of the state’s interest in the instalment process that will last several decades needs a better protection.

The audit of the SAO focused on the necessity of regulating the establishment of principal and accessory obligations in concluding contracts of sale and real right contracts; restrictions on persons who own arrears in privatisation of additional land; cooperation between mortgagees and environmental agencies in preservation of forest established as a security; etc.

For example, forest land privatisation is allowed for persons who own arrears for plots of land privatised earlier, moreover, persons who own tax arrears to the state are also privatising additional plots of land. Such persons may do illegal cutting on their new privatised plots of land, in order to cover their previous debts among other things.

The audit covered the problems with the land privatisation database. A mortgagee is not able to retrieve all the information necessary for conclusion of contracts of sale paid in instalments.

Among other things the SAO recommended to finish land privatisation on the existing principles, and sell state land according to the State Assets Act hereafter.
In conformity with the decision of the Government of the Republic, the relevant ministries will prepare a draft amending the Land Reform Act whereby several aims of the proposals of the SAO should be achieved.

Sven Soiver
Press Representative of State Audit Office
Telephone: (372) 640 0787
GSM: (372) 53 414464
E-mail: [email protected]

  • Posted: 7/8/2003 12:00 AM
  • Last Update: 10/2/2015 5:20 PM
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