Management of Real Property Valuation System in Latvia Aleksandrs Eļkins REAL PROPERTY VALUATION DEPARTMENT Division of analysis and valuation development Senior Expert in Methodology (Analyst) Study Visit in the State Land Service of Latvia 19th of April, 2016

Data collection, data quality Standard on Mass Appraisal of Real Property praisal.pdf According to IAAO  The data management system is the heart of the mass appraisal  Uniform and accurate valuation of property requires correct, complete, and up-to-date property data  The quality of the available data, more than anything else, determines the valuation accuracy

Data collection, data quality The main requirements for data: Market database  Transaction information  Market object characteristics Cadastre database  Property information  Main data characterizing the object MarketMarket CADASTRECADASTRE

Questionnaire lists: Municipality Land Register Excel spread sheet 28 offices Questionnaire lists: Municipality Land Register Excel spread sheet 28 offices Market data collection Main steps in evolution Central database (Oracle ) Create data storage for Online analytical processing (Oracle Discoverer) XML automatic data processing Central database (Oracle ) Create data storage for Online analytical processing (Oracle Discoverer) XML automatic data processing separate Database (Fox Pro) Info - municipality Tax payer Land Register 28 separate Database (Fox Pro) Info - municipality Tax payer Land Register Only Data exchange with XML file Land Register Only Data exchange with XML file WEB service Land Register - SLS WEB service Land Register - SLS

Market data collection

Transactions numbers

Data Analysis Section (Discoverer) Quick statistics and calculations Share to other users Connected between Data market base and Cadastre data on specific date

Information analysis from Discoverer Deals with the flats (premise groups). Work file consist of 416 columns with rows. Columns are 153 attributes (90 from market data base, 30 from Cadaster, 40 calculations and review marks) testing data (approx. 3-5 cycles).This data is temporary only, only final cycle will be saved. Ratio = appraised value/ market value

Verification of market information (deals) All deals are inspected for: Duplication the division into parts, resales Participants municipalities, relatives Object specific type of object Characteristics about objects still in building process, new buildings, that weren’t registered yet, actual land purpose Deal amount extreme deal sum, equal to previous deal sum, equal to KV total 26 marks for suspicious non- typical deals +comments about deals Regularly check deals (usually over of three months) at office and then on survey (with prepared rout and deal map) Possibility re-valuate deals (remove mark) Despite some deals are removed from analysis (ratio, time-adjustment, price index needs), they can be used with adjustment (with hand calculated KV with actual information, adjusted deal sum)

– advertising site place to find information about offers

Time adjustment Global trends for different type of real properties. Comparable territory Market level Comparable objects Compare via ratio

Market data collection Rent, lease information Rental market monitoring and analysis system (monitoring) - Cooperation with professionals - Development of methodology - Exchange of information The information is collected by the State Revenue Service The information is collected in the Land Register

Real property 63 data fields  cadastral value  structure of the real estate  Ownership/tenure  Land Register data  documents Real property objects and data in Cadastre Groups of premises (apartments) 73 data fields  cadastral value  total area  type of premise  area of premise  height of premise Buildings and constructions & utilities 103 data fields  cadastral value  type of building  area, building site  facilities  constructive elements Land parcels 72 data fields  total area  cadastral value  types of land use  legal purpose of use  restrictions  land surveying data Land property Building property Residental property

Objects data collection Real Property Part  Owner  Rights  Cadastral index map  Property units Real Property Part  Owner  Rights  Cadastral index map  Property units Land Part  Area  Land use  Land cover  Encumbrances Land Part  Area  Land use  Land cover  Encumbrances Updated Land Register Updated Land Register First time Land restitution/reform plans/documents First time Land restitution/reform plans/documents Updated Surveying plans Updated Surveying plans First time Surveying plans Reform project plans First time Surveying plans Reform project plans First time Mass building surveying ( ) First time Mass building surveying ( ) Updated Building inventory Updated Building inventory Building Part  Building type  Physical condition  Area Building Part  Building type  Physical condition  Area

Land parcel data registration procedures  Registration based on restitution and privatization documents during land reform  Cadastral survey of land parcels  Digital data from local & state authorities  Paper and e-documents from local & state authorities

Land cadastral surveying process The State Land Service:  Controls documents according to legal acts  Registers surveying files and actualizes surveying data  Forwards border plans and textual data to The State Unified Computerised Land Register, if land surveying was for parcels, who are in one real estate Certified land cadastral surveyor:  Collects information from authorities, land owner  Examine collected documents (SLS gives archive information)  Forms border inspection act  Solves border irregularity, where identified  Creates border plan, situation plan and plan of restrictions  Submits surveying files and paper documents (acts and plans) to SLS for registration and data actualization in Cadastre

Objects data collection – Land Use Land use - determine municipality:  In 1998 territorial plan had not uniform classification  for all municipalities had not developed territorial plans  local government knew best their territory Problem: 1.Time-consuming and expensive administrative process 2.There was no a uniform approach for determine land use - witch resulted in inaccurate values Situation in nature

Objects data collection – Land Use Local government Land Use decision document SLS Information system data connection

Objects data collection – land cover Information update: Land cover – from land surveying plan Water regime (drainage systems) for agricultural land – from amelioration cadastre Encumbrances - from land surveying plan

Objects data collection – land cover Intersect maps - Forest Service, the Rural Support Service, Geospatial Agency

Objects data collection – building data

Building data registration procedures in the cadastre  SLS performed mass survey of buildings (0.8 million)  Cadastral survey of buildings  Land parcel survey  Data registration from declarations submitted by building owners  Data registration from declarations submitted by local municipality  Building Information System

Cadastral survey of buildings  Cadastral survey is mandatory for: – registration of ownership – before expluatation of buildings Digital files Electronical document 23 Cadastre 7 Updated cadastral map

Control of type of building data updating *New regulation from 2015 Application for registration of educational/ veterinary/ medical institution Registration in institution register and issue of permit Local municipality has to approve changes of building use Updating data in Cadastre Responsible state authority checks for registered type of use of building in Cadastre* CADASTRE

Objects data collection – building data Building data declaration Data declaration with the SLS monitoring - Owner receives the recorded data and the declaration form - If necessary, declare changes (online / paper) - SLS record data, carry out random checks and evaluates the quality of Data Declaring with municipal monitoring External inspection of buildings

Data exchange (1) Land Register Rural Support Service Nature Protective Agency State Revenue Service The Corruption Prevention and Combating Bureau Register of Enterprises Latvian Geospatial Information Agency Municipalities (119) 112 Latvian Notary Central Statistical Bureau The State Forest Service State Regional Development Agency Ministry of Transport The Court Administration SLS provides Cadastral data to 18 state information systems and all (119) municipalities free of charge  7 data exchange partners, from which SLS receives electronic data  The most popular data transfer way is Web Services Population Register CADASTRECADASTRE

CADASTRECADASTRE Data flow from municipalities to SLS MunicipalitySLS document IS of the Municipality IS of the Municipality data  SLS receives address and land use purpose data from municipalities in paper  In GIS project SLS has an opportunity to develop mechanism of data electronic receiving

CADASTRECADASTRE Electronic data flow from municipalities Municipality Data input, preparing a decision draft Make a decision SLS Web service after a few minutes Transmit the data Interactive 30%-40% Automatically 60%-70% Land use purpose

Valuation Models Analysis – dependences, relation between equal objects. Some constant coefficients in valuation models are approved by regulations: (building deprecation coefficient, flats floor coefficients..)

Valuation models  Location (zone)  Land use  Land area  Standard plot  Restrictions  Location  Land cover (arable land, forests, waters,...)  Quality of agricultural land  Quality of forest land  Restrictions  Dwelling building existence Building land Agricultural land, forest land

31 Valuation models All buildings  Location  Use  Building area  Physical condition  Encumbrances + Detached and semi-detached houses  Different areas (indoor, open space, basement …)  Facilities arrangement (electricity, sewerage …) + Apartment buildings and multi-functional building  The use of premises  For apartment - floor

Cadastral Valuation page

Mobile application kadastrs.lv 35 Connect a variety of map layers See the status of SLS order On the map view the borders of units of land and building, addresses Search for Cadastre objects and know basic information about them Display your location on the map by the help of GPS Search objects by actual and historical address Using mobile applications kadastrs.lv it is possible to:

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