ISCH COST Action G9
Modelling Real Property Transactions
The main objective of the Action was to establish a method for modelling real property transactions, which makes those transactions more transparent, and allows for true comparison of the processes and related costs between European countries. In order to accomplish the modelling work, cadastral domain experts and experts in the field of knowledge engineering and ontologies worked together. Real property transactions for several European countries have been described as complex sequences of processes. The Action came to those descriptions by breaking up the administrative procedures into smaller units through a method derived from the ontological theory of John Searle. The Action described in detail the existing transaction processes in several European countries, which allowed for the first time to draw direct comparison between the procedures in the Scandinavian countries, central Europe, the European reform countries as well as England and Wales. It became clearly evident that countries make different choices in which societal goals have to be served during the real property transaction, in addition to the legal security of that transaction in the narrow sense. This greatly influences the process time and costs. With regard to those costs of transactions, a careful definition of costs is necessary, to be able to identify and especially explain the differences. The Action noted substantial differences related to taxes that were levied on the real property transaction as such. Differences were further found in what part of public planning, procedures and related costs were borne by the parties of a real estate transaction. Furthermore, it has been revealed that general policy issues influence considerably the non-monetary costs of a transaction. In this context the preemption rights are of greatest importance. The question whether the holder of a preemption right (often a neighbor) is taking over the property or not, creates uncertainties, which have to be seen as hidden costs. Building on the information available as part of national statistics, the method of satellite accounts of the System of National Accounts was tentatively applied for two countries. This approach allows for another way to determine the transaction costs, taking the related spending in the relevant sectors (both public and private) as the starting point, instead of the price the seller and buyer have to pay for the services. The Action elaborated a method allowing a transparent description of real property transactions, as well as provided such descriptions for several European countries. It was learned that the outcome of the comparisons depends very much on the point of view taken, therefore, no ideal or optimal transaction system can be recommended. However, the Action’s outcome -to be published in a book- allows for formulating critical questions to examine the highly historically grown present-day systems.
(Descriptions are provided by the Actions directly via e-COST.)
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