The Financial Oversight and Management Board for Puerto Rico welcomed today a new initiative to reduce the backlog of property deeds and other documents yet to be registered in Puerto Rico.
This initiative was launched with the University of Puerto Rico and the Department of Justice.
The new program, designed to tackle more than 400,000 documents that are pending registration in the Property Registry of Puerto Rico, encompasses several major components that include a work-study program of 130 graduate and non-graduate UPR students that will be assigned to the agency, as well as five public notaries, and five supervisors that will be hired by the Department of Justice.
The Oversight Board highlighted the need to improve the efficiency of the Property Registry due to its direct impact on the business environment and economic development, as noted by the World Bank and other international organizations.
A well-functioning and efficient registration process encourages investments that increase the value of properties and facilitates entrepreneurial activity.
Having an effective property registry system in place allows individuals and businesses the right to use and build upon their resources as they see fit, executive director of the Oversight Board, Natalie Jaresko, said.
“It’s critical that we direct existing resources to improve priority areas of concern which will promote economic activity and reduce the obstacles to starting a business in Puerto Rico,” Jaresko said.
“The importance of an up-to-date registry is vital for an economy, since it allows a person to claim ownership of a property, utilize the property for collateral and financing. Moreover, any sale of a property would not be considered valid if it was not registered,” she added.
“These rights support investment and provide transparency in real estate transactions in Puerto Rico,” said Jaresko.
The measures that are being taken to reduce the backlog of documents in the Property Registry relate to the Ease of Doing Business Reform, one of several structural reforms required in the Certified Fiscal Plan, that also tackle the issues of human capital and welfare, the power sector and infrastructure.
An important barometer for measuring this criterion is the World Bank’s Ease of Doing Business Index, which currently ranks Puerto Rico 65 out of 190 countries. It’s estimated that registering property in Puerto Rico now takes around 191 days, of which 180 days are due to delays in the Property Registry, placing Puerto Rico in the position of 161 out of 190 for title registry, according to the World Bank.
The Property Registry currently receives more than 130,000 documents for inscription annually and, although it has the capacity to process more than this amount with its current staff, it can only reduce the backlog by 31,824 a year, taking into account its workload.
At this pace, the agency projects it will take around 14 years to clear the existing backlog. The Property Registry’s workforce of 310 would receive a boost in its capacity and will be able to clear the backlog in approximately four years with the new program.
The first phase of the work-study program will run for five months, starting in March.
“We believe the backlog of cases could be significantly reduced if the students and government employees handle around 90,000 additional cases per year. The initiative will also be beneficial for students that are looking for great work experience in addition to providing them with a source of financial support while they study,” Jaresko said.
The Oversight Board approved a formal request from the UPR to finance the initiative with $386,100 from funds that had been assigned to the institution in previous fiscal years and remained unused.
The students will receive an hourly wage of $15 for their work at the Property Registry that could entail the inscription of property documents, analyses of other official forms, such as the cancellation of mortgage deeds, declaration of heirs, as well as estimating the cost of internal revenue stamps for submitted documents.
In addition, the Justice Department will hire the staff that will provide support to the Property Registry. The Oversight Board also approved a $2 million reapportionment request for the Department of Justice to invest in capital expenditures related to this initiative.
“Creativity and collaboration are key to solving issues that hamper Puerto Rico’s road to recovery. This type of collaboration, between the University of Puerto Rico and different agencies, is a prime example of how we can work together to improve efficiency and effectiveness of government in Puerto Rico,” Jaresko said.