Progress Made to Resolve Property Title Issues

If you’re having trouble finding clear title record to the property you hope to buy up north, chances are the problem is due to sloppy paperwork.

Matthew Bohn, who directs a U.S. government-funded effort to clear up property registries in northern Nicaragua, estimates that some 50-70% of disputed land titles they’ve come across are based on simple mistakes.

The problems range from property maps without clear boundary lines to lost record books, Bohn said. The Sandinista Revolution’s Agrarian Land Reform policies of the 1980s, he adds, “just made it more confusing.”

To correct the problem now requires navigating a labyrinth of government agencies. But the World Bank and U.S. government both say that they are making progress in fixing land titles around Chinandega, Estelí and León – areas that have yet to see the massive influx of outside investment that has bought up much of the south-central Pacific coast and the area in and around Granada.

By clearing up titles now, Bohn says they hope to prevent the chance for disputes before the land rush hits up north.

“We’re finding ways to attack the problem at a systematic level,” Bohn said.

As part of the United States’ broad $175 million Millennium Challenge project, $26.5 million is being devoted to clearing up the titles on some 80,000 urban and rural properties around León, totaling 5,138 square kilometers of land. The plan is to deliver approximately 43,000 clean titles after five years, Bohn says.

So far, the World Bank has cleared 98% of the property titles it set out to fix in Chinandega. The nearby effort in Estelí is 60% completed, the World Bank reports.

The León project, meanwhile, is just getting under way.

The programs make good economic sense.

A 2002 World Bank study found that as many as 60% of Nicaraguan properties lack proper documentation, and experts have long warned that the country’s erratic property system is a hindrance to faster growth.

Enhancing land titles, the World Bank estimates, could add 30% value to each property that is resolved. There’s also a 10% better chance that the person who bought the property will make further investments if the title is in good shape.

Bohn said that the Millennium Challenge group is not involved in fixing the contentious land confiscations from the 1980s.

But experts are reporting progress in that area as well.

At the end of 2006, more than 4,500 people who lost their property after they fled to the United States have been compensated with government-issued bonds valued at $320 million according to the U.S. Embassy in Managua.

Since Ortega returned to office on Jan. 10, the government has resolved an additional 85 cases at a cost of nearly $6 million.

On July 29, the administration of U.S. President George W. Bush officially recognized the Ortega government’s progress toward this end by extending for one year the waiver that will allow Nicaragua to continue receiving U.S. aid for its continued progress toward resolving property claims.

Under U.S. law, foreign countries where U.S. citizens have had property confiscated are not eligible for U.S. aid, requiring the U.S. government to issue Nicaragua a waiver each year based on its continued progress to resolve pending claims.

The Millennium Challenge Corporation is also building new roads in the north and contributing funds to make rural businesses more competitive.

But fixing property titles is quickly proving to be a main issue to restarting the economy in this part of the country.

“For small business owners, there’s no bigger issue,” Bohn said.

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