Action G9 - Modelling Real Property Transactions
2001 - 2005 Chair: Pr Erik STUBKJAER (DK)
Signatories: AT, DE, DK, ES, FI, GR, HU, LV, NL, SE, SI, UK

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 fi rst 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 infl uences the
process time and costs.

With regard to those costs of transactions, a careful defi nition 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 infl uence 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.

COST Annual Report 2005, Issued by the COST office april 2006, page 26