Úřad pro zastupování státu ve věcech majetkových
Office of the Government Representation in Property Affairs
Annual Report 2007
March 2008, Prague Ing. Miloslav Vaněk,
Director General
Contents
List of used abbreviations 4
1. Introduction 6
2. State Representation 6
2.1 Legal State Representation 7
2.1.1 Structure of performed competences 7
2.1.2 Financial effect on the state budget 10
2.2 Contracts on individual housing construction assistance 10
2.3 State pre-emptive right for public works 12
2.4 Monitoring the conditions of transactions according to special laws 13
3. Acquisition of Property 13
3.1 Property acquisition into the state ownership 13
3.1.1 Property gained from escheat; caducous property; property devolved upon the state; direct inheritance 14
3.1.2 State property, which is not managed by anyone 14
3.1.3 Tracking of ‘unknown owner’ in Land Registry 15
3.1.4 State property investigation, the OL no. 16
3.2 Acquisition of the competence to manage 17
4. State property management and implementation 17
4.1 Structure of assets 18
4.1.1 Buildings and constructions 19
4.1.2 Land 20
4.2 Specific property management problems and property implementation 22
4.3 Immovables with special legal conditions of disposal 25
4.3.1 Buildings of former District Authorities 25
4.3.2 Assets in privatization mode 26
4.3.3 Assets transferred to legitimate persons 27
4.3.4 Assets at road border crossings 29
4.3.5 Transfers of assets of comparable legal mode (group transfers) 30
5. Coordination of disposal with administrative buildings 32
6. Management of assets secured in penal proceedings 32
7. Other tasks 33
7.1 Legal Community Representation 33
7.2 Legal standpoints 33
7.3 Cooperation during land treatment 33
8. Activity provision 34
8.1 Funding 34
8.2 Information technology 34
8.3 Staffing 35
8.4 Communication with public 36
8.4.1 Web pages uzsvm.cz and common electronic communication 37
8.4.2 Assets offer through web pages 37
8.5 European cooperation 37
9. Conclusion and Prospects 38
9.1 Recapitulation of current state 38
9.2 Further prospects 40
Appendix 1: Asset numbers and values on 31.12.2007 42
Appendix 2: Asset flow during 2007 43
List of used abbreviations
|NCPA |Nature and Countryside Protection Agency in the CR |
|CGLRO |Czech Geodetic and Land Register Office |
|NPF |National Property Fund of the CR |
|GIS |Geographic Information System |
|CDG |Customs Directory-General |
|BC |Road Border Crossings |
|IHC |Individual Housing Construction |
|ICT |Information and Communication Technologies |
|SPIS |State Property Information System (installed at the Office) |
|FSIS |File Service Information System (installed at the Office) |
|NM |National Monument |
|OL |Land Registry Ownership List |
|MF |Ministry of Finances of the CR |
|ME |Ministry of Environment of the CR |
|KR |Assets Keeping Records (in the sense of AP) |
|DA |District Authorities |
|DO |Detached Office (of the Office of the Government Representation in Property Affairs ) |
|SOU |State Organizational Unit |
|LF CR |Land Fund of the CR |
|RDC |Regional Dislocation Commssion |
|RHH |Road and Highway Headquarters of the CR; allowance organization of the Ministry of Transport |
|AA |Assets Accounting (in the sense of AP) |
|RO |Regional Office (of the Office of the Government Representation in Property Affairs) |
|Office |Office of the Government Representation in Property Affairs |
|GDC |Government Dislocation Commission |
|Act |Act no. 201/2002 Coll., on the Office of the Government Representation in Property Affairs |
|Provision |Provision of the MF no. 62/2001 Coll., on state assets economy of both state organization units and state |
| |organizations |
|AP |Act no. 219/2000 Coll., on the property of the Czech Republic |
|Act no. 320/2002 Coll. |Act no. 320/2002 Coll., on the change and cancelling of some acts in connection with dissolving district authorities |
|FPP |Founder’s Privatisation Project |
|AWM |Agricultural Water Management (state organizational unit) |
1. Introduction
The Office for the Government Representation in Property Affairs (hereafter the ‘Office’) was established on 1.7.2002, by the Act no. 201/2002 Coll., on the Office of the Government Representation in Property Affairs (hereafter the ‘Act’), as a state organisational unit. The Act entrusted the Office with legal state representation and property management; these activities were, in the so-called Operative Keeping Records (what used to be the ‘Interim Management’), controlled by the District Authorities.
The Office is divided into eight Regional Offices (hereafter the ‘RO’) in the places of regional courts seats and in Prague. These ROs are further divided into the departments of so-called Detached Offices (hereafter ‘DO’).
Gradually, the Office gained other competences, especially representing communities (on their own request) in cases established by the law; management of dissolved District Offices’ property, and other gradually taken over state property (e.g. border crossings and selected land within specially protected areas); the administrative work of the control of transfers conditions observance monitoring, following the Act no. 290/2002 Coll., from the perspective of a transferee; monitoring of meeting contractual terms of individual housing construction state allowance, and the solution of resulting claims; management of assets secured in penal proceedings; coordination of activities and preparation of materials for regional dislocation commissions; accepting of state pre-emptive right offers for the land intended for public works; accepting of property return delivery offers following the Act no. 245/2006, Coll. The Office has taken over this administrative work, excluding personnel increase or special extension.
Activities of the Office thus currently include the sphere of legal state representation at courts; administrative and other bodies; community representation in selected cases; state representation in monitoring of meeting contractual terms of contracts negotiated between the state and private persons (both physical and legal); as well as some other activities, following relevant laws. In the sphere of property, this means the acquisition of property into state possession, or the acquisition of the jurisdiction to manage the state property, often including necessary legal and subject identification; selected state property management and implementation; management of property secured in penal proceedings; coordination of selected state property conveyance; and some other competences.
The activities of the Office are continuously rationalised. Most importantly, a quality information system is being completed; the number of its staff is gradually decreased; and its structure is simplified (e.g. by office fusion aimed at increasing effectiveness). A quality legal service and management of property represent two closely interconnected spheres. These represent, together with effective information system and qualified personnel, a great potential for the Office in the sphere of all of its current activities, as well as for their possible future extension.
2. State Representation
Legal state representation at courts and other bodies presents one of the two main competences entrusted to the Office at the time of its establishment by the Act. Other spheres of state interest representation are monitoring of meeting contractual terms (of contracts negotiated between the state as one contracting party), and monitoring the observation of state property transfer conditions, following special laws and exploiting the state pre-emptive right in selected cases.
2.1 Legal State Representation
2.1.1 Structure of performed competences
In cases and under conditions established by the Act, the Office represents the state exclusively in judicial proceedings; in front of arbitration boards; administrative bodies; and other bodies in state property affairs - replacing the organization units relevant for the property management (exclusive action of the Office according to sections 2 to 5 of the Act).
The Office can also agree with the state organizational unit (hereafter SOU) on representing the state in a legal proceeding; in front of an arbitration board; an administrative body; or some other body in property affairs – instead of this SOU (concerted action according to sections 6 to 8 of the Act). Finally, if the state takes a valuable interest in the result of a given trial (additional participation according to sections 9 to 10 of the Act), the Office can represent the state in a civil trial as an interpleader in any property affair; as long as a state organisation is competent to manage this property, or if the Land Fund of the CR (hereafter the LF CR) is in charge of the property management. Finally yet importantly, the Office acts by the right of its own competence to manage state property (according to the Act degree, sections 18 to 19). Table 1 gives the total of negotiated judicial proceedings on the date of 31.12.2007.
|Regional office |Judicial proceedings |Inheritance proceedings |Administrative proceedings |Total |
|Prague |580 |916 |214 |1 710 |
|Central Bohemia |473 |256 |428 |1 157 |
|Plzeň |309 |109 |297 |715 |
|České Budějovice |270 |199 |149 |618 |
|Hradec Králové |403 |210 |261 |874 |
|Ústí nad Labem |569 |236 |143 |948 |
|Brno |1710 |355 |665 |2 730 |
|Ostrava |688 |386 |996 |2070 |
|Total |5 002 |2 667 |3 153 |10 822 |
Table 1. Number of judicial proceedings negotiated on the date of 31.12.2007.
For clarity, the so-called indisputable proceedings, marked as inheritance proceedings, were omitted from the judicial proceedings’ table. In these proceedings, the state gains property either based on a testament or as a so-called escheat. The Office represents the interests of the state in these cases; it is present at an inheritance proceeding; protects state claims against illegitimate heirs; actively participates on both estimating the size of the assets and providing its protection. It judges the inheritance debits - the competence of claims raised on the date of testator’s death, and cooperates with notaries on further steps leading to the minimization of negative effects on the state, including insolvent inheritance liquidation schemes. As suggested by the numbers given, it is a rather extensive scope of duties, which also carries a significant property meaning. The number of these judicial proceedings has been rising.
Adversary proceedings (cases marked in the table as judicial proceedings) can be divided, from the registration point of view, into groups according to individual above mentioned provisions of the Act.
From the table it is clear that the highest number of cases are those concerning property, which is managed by the Office. When it comes to legal processes, in which the Office acts according to section 6 of the Act (that is on the basis of an agreement with relevant organizational unit), it is clear that the possibility of exploiting services of the Office is not sufficiently known to the state organizational units, as only a small number of these uses the advantages of such method.
The Office has established the most frequent and close cooperation with the Ministry of Finance (142 cases); Ministry of Foreign Affairs (17 cases); Ministry of Justice (17 cases); Ministry of Culture (9 cases); Ministry of the Interior (1 case); and the Ministry of Health (4 cases).
| RO: |Prague |Central Bohemia |
|Mode according to law: | | |
|Assignment of the ownership of St. Vitus Cathedral and |Metropolitan Chapterhouse by St. |Accusant’s appeal against the decision |
|other immovables within the Prague Castle precincts |Vitus and Co / CR – the Office of |at the Prague MC |
| |the President of the Republic | |
|Compensation of damage |Diag Human, S.E. / CR - Ministry of|For 4,358 million CZK and accessory |
| |Health. |equipment |
|Issue of the shares of Nová Huť Ostrava |Petrcíle, Ltd. / CR - MF |5,792 million CZK |
|Release of Petschek Palace in Prague |Petschek and Co. / CR – Ministry of|Judgement overturned by a Court of |
| |Industry and Commerce |Appeal; the case is complicated due to |
| | |inheritance proceedings abroad |
|Determination of the proprietary right for the premises |Prague Archbishopric / CR - |Case dismissed |
|in Prague 6, used by the Police of the CR |Ministry of the Interior | |
|Payment of the claim based on the transfer of |ČSOB, Ltd. / CR - MF |1,682 million. CZK with accessory |
|obligations from the Company for General CS Exhibition | |equipment - unlawful sentence in favour |
|to the state | |of the state |
|Payment of the amount due to liability of NPF for |ČSOB, Ltd. / CR - MF |372 million CZK with accessory |
|privatized enterprises | |equipment; the state has disputed the |
| | |lawful sentence with an appeal |
|Payment of the amount due to damage compensation |Transkorekta, Ltd. / CR - MF |8 billion CZK |
|resulting from the floods in Moravia | | |
|Release of unjustified enrichment exceeding 10 million |CR – the Office / Cimex, Ltd. |Exploitation of premises without a legal|
|CZK | |reason and compensation for use |
|Determination of ownership of immovable assets |Collegiate Chapterhouse by St. |Manor house in Javorná |
| |Kosmas and Damian, Stará Boleslav /| |
| |CR – the Office | |
|Payment of a contractual fine of 6.25 million CZK |CR – the Office / ČSAD Autobusy |Case taken over from a DA – breach of |
| |Karlovy Vary, Ltd. |contract on transport services |
|Determination of ownership of land |Jednota Příbram / CR – the Office |A series of suits dealing with the |
| | |issues of section 879c clause. |
|Payment of 1.7 billion CZK |ČSOB / CR – MF |Arbitral procedure by the International |
| | |Court of Arbitration in Paris (ICC); a |
| | |countersuit was brought for |
| | |approximately 26.7 billion CZK |
|Release of the Chateaus Hluboká n. Vltavou, Český |Alžběta Petzoldová |A series of cases that are still not |
|Krumlov and Třeboň, as well as Schwarzenberg, Salmovský | |lawfully completed; success of the state|
|and Šternberg Palaces in Prague | |is however to be expected |
|Release of the Kinský Palace in Prague, immovable assets|F. O. Kinský | |
|in NP Českosaské Švýcarsko, and the chateau in Heřmanův | | |
|Městec | | |
|Release of the chateau in Jaroslavice and of a technical|Felicitas Spee, born Mitrovská | |
|monument (a mill) in Slup | | |
|Release of the chateau in Vranov nad Dyjí |Helena Maria Descure and Co. | |
|Release of the castles Bouzov and Sovinec; the chateau |Czech Province of the Order of | |
|in Bruntál, and Spa Karlova Studánka |Brothers of the House of Virgin | |
| |Mary in Jerusalem | |
Table 3. Most significant legal processes on the date of 31.12.2007.
To complete the information from the table, it is necessary to say that by the beginning of 2008, a many years’ case with the Petrcíle Ltd. was concluded. It is to be expected that the case with DIAG HUMAN SE, in which the Office elaborated (as instructed by the arbitration board) a conclusive proposition in March 2008, will soon be terminated. On the other hand, the Office takes over many cases after the dissolved Czech Consolidation Agency, the duties of which had been transferred to the Ministry of Finances. This is about 25 cases, which highly exceeds the limit according to section 3 of the Act. The Office represents the sate in SASANO CREDIT INVESTMENT CZ, Ltd. vs. CR – the Economic Competition Protection Agency case, for damage compensation of 80 billion CZK; and in the Raffels Company vs. CR – Ministry of Finance, for damage compensation of 13 million USD.
2.1.2 Financial effect on the state budget
Only legal processes that follow section 18 of the Act, that is property suits concerning property that the Office has the competence to manage, have direct impact on the Office economy, respectively on the budget of the Ministry of Finance (hereafter the MF). The results of other legal processes are reflected in the economy of the state or community organizational units, which are represented by the Office at court. In most cases, it is practically impossible to give the assets value that the state gains or ‘saves’ from a given case. However, judging from the cases in which the value is given, it is clear that it reaches hundreds of millions or billions of CZK. Beside the value of disputed property, these cases also bring significant costs savings, as the state is represented by its own employees (instead of law offices working on a commercial basis for fairly high fees).
For example, in a case over 50,000,000 CZK, lawyer's fee, according to a valid rate for a representation in one degree of judicial proceedings, is approximately 780,000 CZK.
2.2 Contracts on individual housing construction assistance
Individual housing construction (hereafter the IHC) assistance were provided by the state since January 1st, 1986, based in the provision no. 136/1985 Coll., on financial, loan, and other support for cooperative housing and individual housing construction, as well as owned family house innovations. The point of this assistance was state support provided against a contract, which was entered into between a citizen/builder and, originally, the National Committee, and later the District Authorities and town bodies substituting the DA (in the districts of Plzeň-town, Brno-town, and Ostrava-town), and Prague Municipal Office.
If the contractual conditions were met, state financial assistance was non-refundable. The builder must return the subsidy only if he breaches the IHC contract which he had entered into. The contractual conditions primarily include the obligation to build the estate following the building permit; to have it approved within a given period; to use the estate for permanent living and not to steal it within 10 years from entering into the IHC contract (and within minimum 8 years form its approval). If the builder breached or breaches any of the conditions, the state assistance becomes refundable; until it is paid for, the builder has a debt to the state.
Monitoring the IHC assistance contracts is thus primarily representing the state interests; only secondarily and not always, a claim arises which is managed by the Office in the same way it manages any other financial assets.
According to the Act no. 320/2002 Coll., on the change and dissolution of some laws in connection with closing the District Authorities (hereafter the Act no. 320/2002 Coll.) for the statutory towns of Brno, Ostrava, and Plzeň, and the city of Prague (according to the Act no. 22/2006 Coll., which changes the Act no. 219/200 Coll., on the Property of the Czech Republic, as subsequently amended), the Office is competent to inspect contractual conditions meeting; to decide on a claim creation, or its remission; and to manage the resulting claims.
The work is demanding both due to the number of cases and the fact that the contents of the contracts entered into have been changed according to gradual amendments to relevant regulations. According to the prevailing terms for meeting the above mentioned conditions, the IHC contract inspection is expected to be competed in 2013, in some cases even later.
On 31.12.2007, the Office was watching a total of 70,348 IHC contracts; based on these, the total state support of 5.3 billion CZK had been provided. On 31.12.2007, the Office recorded a total of 40,233 of terminated contracts. These were terminated either because the contractual conditions were met, and no claim thus arose, or a claim arose due to breaching the conditions, but was covered by the citizen-builder by the monitored date. These contracts represent a provided state assistance of the total amount over 3.1 billion CZK.
[pic]
Pict. 1. The condition of IHC assistance contracts (in %)
By the end of 2007, the Office thus had to continuously watch the performance of 25,588 contracts, representing the total state assistance of over 1.8 billion CZK; the contractual conditions terms of these contracts had not yet expired, as they are before the terms of approval, using, and dis-alienation.
The condition of contract implementation is clear from pict. 1. From the territorial point of view, the Office records the highest number of contracts in the former South Moravian district (23,204 contracts); the lowest number of contracts is recorded within the precincts of Prague (1,782).
[pic]
Pict. 2. Territorial distribution of IHC assistance contracts
Preferentially, the Office watches and deals with 4,527 IHC contracts with breached contractual conditions, which created a claim for the state, and based on which a total financial contribution of almost 364 million CZK was provided. Ways of dealing with these contracts are as follows:
[pic]
Pict. 3. Method of dealing with claims from the IHC state assistance contracts.
Table 4 indicates time development of contract monitoring and dealing with possible claims (in the ratio of the total of managed contracts).
|The condition of IHC contracts |2004 |2005 |2006 |2007 |
| |Rate in % |
|Terminated (settled) |18 |58 |62 |57 |
|Watched (terms have not expired) |75 |35 |29 |36 *) |
|With a claim (conditions were breached) |7 |7 |9 |7 |
|Hereof (%): Schedule of payments |11 |18 |11 |13 |
|Judicial claiming |13 |31 |18 |20 |
|Remission of a debt |6 |20 |20 |28 |
|Withdrawal of claiming |- |- |- |1 |
|Other; in the process of settlement |70 |31 |51 |38 |
*) Note: Compared to 2006, the increase reflects the duties taken over from the statutory towns.
Table 4. Time development of watching the IHC state assistance contracts.
2.3 State pre-emptive right for public works
Act no. 183/2006 Coll., on regional planning and building regulations (Building Act), has also extended legal state pre-emptive right since 1.1.2007 (in section 101). It has established that the Office substitutes the state as the recipient of compulsory offers of land in possession of a third party for the exploitation of the pre-emptive right in cases selected by the law - specifically the land intended, by the development or settlement plan, for public works or welfare arrangements. State’s end-owner is a body or organization, according to assets jurisdiction in accordance with special legal regulations.
The aim of the newly accepted legislative solution is to avoid speculations and obstructions during the implementation of public works, simultaneously with adequate protection of proprietary rights of private subjects. Since the rights and obligations can only be deduced with reference to regional planning documentation which was recorded after the legal force of the law, this system of work is merely in its beginning, and its demands and development cannot yet be precisely guessed at.
2.4 Monitoring the conditions of transactions according to special laws
The immovable assets, which become the property of citizen associations of the physical education and sport sphere, or the property of the union, following the Act no. 290/2002 Coll., (on the transfer of some other things, rights, and obligations from the Czech Republic to districts and communities, to the citizen associations of the physical education and sports sphere) in its full version must, for 5 to 10 years from the day of their acquisition, be used for the purposes for which they were used on the day of the transfer of ownership only.
If the assets become useless for their acquirer for a given purpose before the expiration of this period, they must be preferentially offered to the state free of charge.
Similarly, according to the provision of section 41 of the Act no. 245/2006 Coll. (on public non-profit health institutional facilities, and on the change of some laws, in its valid version), things, the ownership of which was transferred from the state to municipal authorities in connection with the transfer of some of the functions to the hospitals, must be (during the ownership right transfer onto another person) be preferentially offered to the state; to some other municipal unit; or to a public healthcare facility.
The Office is competent to accept the offers (meeting the above mentioned regulations); to judge, and consequently accept the assets; or even to litigate a case, substituting the state.
3. Acquisition of Property
An important part of the activity of the Office is the operations connected to state property acquisition, or to gaining the competence to manage it. This includes a property newly acquired by the state (esp. escheat, and property that falls caducous in penal proceedings), and state property about which it becomes clear that no subject manages it (the so-called ‘tracked’ property). According to AP, this property is recorded in the operative record mode. If it is not treated within a two-year period, it is by law transferred into the accounting. Property acquisition is also connected with acceptance of the competence to manage the property from another state organizational unit, on authority of the law or a government decision. Property acquisition for another state subject (following chapter 2.3) is not included in these activities.
3.1 Property acquisition into the state ownership
The Office is competent to manage the property, which the state newly acquires into its ownership. Some kinds of property (e.g. most of escheat) mostly represent property of low value; however, its acquisition and implementation are very demanding. Other property (e.g. state property that is not managed by anyone) is often burdened with legal defects and unsure acquisition title. The actual process of property acquisition, even though it represents a large part of work of the Office, does not bring any earnings. Though indirect, gradual removal of flaws, ambiguities, and legal defects in the records of the immovable assets within the entire area of the Czech Republic, represents a significant merit for the state.
3.1.1 Property gained from escheat; caducous property; property devolved upon the state; direct inheritance
This processing of the property transferred onto the state was transmitted to the Office, from district authorities and the MF, by the Act, on the date of its creation, on 1.7.2002. The acquisition title can be a decision of court, either in penal proceedings about forfeiture; detainer; or the so-called escheat (i.e. state property acquisition according to section 462 of the Civil Code). It can also be a direct dedication to the state or direct inheritance in favour if the state.
Court inheritance proceedings are rarely terminated in the same year they were initiated. Only after a lawful decision of a court about an inheritance, there comes the acceptance and implementation of the assets (i.e. movables; immovable assets; financial amounts on bank accounts; cash; stocks; claims; and other valuables, such as housing association property shares).
The largest group formed by the assets, which the Office acquires on the basis of bodies active in penalty proceedings. These are things that were used for a criminal act; courts often give the Office low value assets, such as pliers, knives, and screwdrivers, for implementation. The Office also accepts a large amount of movables, which infringed copyright, or were used for a criminal activity (e.g. textile goods imitations; CDs; shoes; etc.). The Office is obliged to liquidate most of these.
A characteristic feature of the above mentioned duties is the amount of the movable assets of mostly negligible value. The largest amount falls upon the offices in large towns.
Another duty is being developed. It is the devolvement of things, which were not, according to section 342 par. (3) of the Civil Procedure Code, sold in an auction sale. Most often, these are things from evicted flats; exceptionally these can also be immovable assets.
3.1.2 State property, which is not managed by anyone
Another group of acquired property is formed by immovable assets, which are, in the land registry’s ownership list, still recorded as managed by district authorities, or even national committees. These can also be immovable assets left after state organizations and companies, which had been dissolved, without treating their assets according to the law; these assets may also not have been part of the privatization project (usually because they were insufficiently interesting for the acquirers).
The duties are especially demanding form the point of view of investigation. Beside the land registry, inquires into country or local archives of commercial or former company register, are almost always necessary. As it is always necessary to verify the records proving the ownership of the state, this process belongs more to the sphere of assets acquirement than to the change of ownership (proven by the fact that this assets category is subject to AP and the Regulation of the Operative Record Mode). When verifying the acquisition titles, it must also be verified if these assets, according to the Act no. 172/1991 Coll., on municipal property, had not become the property of a community. This is a long-term process, as the state assets are continuously investigated, mostly on the basis of a request from physical or legal persons, who wish to find the real owner from legal interest. These problems are of the most difficult duties of the operative record from both professional and time point of view.
3.1.3 Tracking of ‘unknown owner’ in Land Registry
Long history of experience of the Office has shown that a large portion of the immovable assets, which are in the land registry recorded as having an ‘unknown owner’, are in reality the property of the state. Based on the ‘Agreement on Long-term Cooperation between the Property Issues State Representative Office and the Czech Geodetic and Land Register Office’ (hereafter the CGLRO), negotiated on 28.4.2006, a systematic lustration of immovable assets enlisted on the ownership list (hereafter the OL) no. 11000, marked as an ‘unknown owner’ was commenced.
[pic]
Pict. 4. Tracking of immovable assets' owners recorded in the LR on OL 11000.
Main reasons for existence, and increase in number of these immovables, are land transfers from simplified records to the state of land registry (cadastral map digitalization; land treatment; cadastral records recovery), or insufficient documentation of confiscation of assets. To be identified and recorded on the OL of the Office, many immovables must be geometrically surveyed; this brings considerable financial expenses. Sometimes the condition of papers in selected archives represents a serious problem.
The results of tracking (pict. 4) bring into the records several hundreds of immovables per year. Simultaneously, a significant part of the tracked assets does not belong to the state.
However, the given tracking does not show unknown owners in joint owner shares, as these are recorded in different OL.
Table 5 shows the result of land register data lustration on 31.12.2007, where the assets are assigned to an owner without sufficient identification.
| |Sites |Buildings |Housing units |
|ERROR | | | |
|IN IDENTIFIER | | | |
| |Number |m2 | | |
|Unknown owner |10 788 |25 231 893 |2 535 |0 |
|Missing birth number |166 482 |401 414 020 |6 562 |61 |
|Birth number with 6 or less digits |44 099 |179 295 767 |4 037 |1 950 |
|Lacks IN |10 009 |32 578 422 |1 020 |16 |
|TOTAL |231 378 |638 520 102 |14 154 |2 027 |
|No sites in DCM | | | | |
|Sites in DCM location not recorded in|767 |20 651 371 | | |
|OL | | | | |
Note: Only immovables without joint ownership are included. DCM – digital cadastral map
Table 5. Property with incorrect identification of the owner in the land registry
The problem mentioned only represents a part of a more extensive problem of ‘unknown’ immovable assets owners; this includes the OL of persons (registered owners), who cannot be clearly identified; or it is highly probable that they had deceased and their heirs are not known; or the assets are not recorded in the OL at all. This problem fundamentally complicates the work of the Office during the implementation of immovable assets shares, where it is necessary to tract the other joint owners. However, this is mostly an issue of private persons. The solution is fully of an interest to the state, as one of the roles of the state is to provide legal security of its citizens, and their equal position in administrative proceedings, which is actually prevented by the current state. One of the possibilities is institution of declaratory action; however, legal or factual conditions of its institution often prevent this possibility. The only possible solution, contrary to the immovables recorded in the OL no. 11000, is a legislative change.
3.1.4 State property investigation, the OL no.
It is an extensive process connected to investigation to see if the immovables recorded in the OL no. 1 (i.e. with ownership right for the CR, and the right to manage for former MNC) are still owned by the state, or if they became municipal assets according to section 1 or 2 of the Act no. 172/1991 Coll. (law on municipal property). This cannot be decided merely by investigating the land registry records. A decision can be only reached after tracking all documents, both state acquiring titles and economic contracts, which later adjusted the rights to use individual state immovables.
As the size of the immovables is significant and often cannot be foretold, the investigation is not commenced from an internal, but mostly from an external initiative (e.g. a request of a developer who needs to charge the land recorded in the OL no. 1 with right in rem; or a request of a road supervisor, to transfer the property under the road; or if such immovables are found by the land registry during land treatment proceedings). The land is often intended for large investment plans of the community. Table 6 gives the number of immovables recorded in MNC/DNC, according to the land register data lustration within the entire CR.
|Immovables recorded in MNC/DNC |In ownership |In joint ownership |
|Lands |64 098 |24 186 |
|Buildings |1 335 |164 |
Table 6. Immovables still recorded in the ownership lists of MNC/DNC.
The investigation results are often influenced by insufficient community cooperation or even a conflicting attitude. Instead of cooperation, they transcribe the immovables from the OL no. 1 into their ownership, even though legal conditions of ownership right transfer are not sufficiently verified. There were cases, when the community charged such immovables with easements, and returned the assets back to the OL no. 1 after finding out that the conditions of the transfer were not met. 1.
3.2 Acquisition of the competence to manage
Competence acquisition concerns the property which is already the property of the Czech Republic, however another SOU or state organization has been managing it. In a single step, on 1.1.2003, the Act no. 320/2002 Coll. transmitted the competence to manage the assets in accounting, which were managed by the district authorities (hereafter the DA), according to section 9 of the AP, and which were not transferred onto communities or districts. The immovables consisted of approximately 250 thousand items of the value of about 15 billion CZK; the recorded value of movable assets was about 2 billion CZK; the intangibles (software, rights, licences) were of the value over 300 million CZK (in record accounting values). So far, these assets represent the largest assets rate, managed by the Office. To a certain point, their properties can be judged by the fact, that the district authorities had not managed to implement them before the date of their dissolution. Another reason, beside legal obstructions, certainly was the poor potential of their implementation.
In 2003, based on the Government Decree no. 56, from 13.1.2003, the Office accepted border crossing (hereafter the BC) assets worth about 3.5 billion CZK, from the Customs Directorate-General.
The accepted assets include a total of 64 border crossings, where the border premises stand on the territory of the Czech Republic.
On 1.1.2005, the Act no. 485/2004 Coll., which amended section 13 of the Act no. 290/2002 Coll., transmitted the competence to manage the lands, which are part of especially protected areas, according to the Act no. 114/1992 Coll., on protection of nature and landscape, and which are placed in currently built-up community premises. Simultaneously with the competence to manage, the Office acquired the competence to carry out the rights and obligations of the Czech Republic, related to the lands. Until 31.12.2004, this was a competence of the Nature and Countryside Protection Agency ( hereafter the NCPA). Between 2005 and 2007, the Office accepted 7.8 thousand lands from the NCPA; their total size was 6.4 million square metres, and their accounting value was 259 million CZK.
4. State property management and implementation
The Office treats the property in accord with the AP and its executive provision no. 62/2001 Coll., on the management of state organizational units and state organizations with state property. Property treatment includes common management and maintenance; so-called implementation (i.e. transfers in favour of other organizational state units); purchase agreements and contracts on free transfer in favour of physical or legal persons; or temporary rents and borrowings. Fulfilling the obligations of an owner, related to property management and maintenance, includes the participation in administrative proceedings due to either ownership or some other legal reason. In extreme cases of implementing movable assets, which are entirely unexploitable, their liquidation may be necessary. It is crucial to distinguish between the cases, when liquidation represents the method of treatment required by the state (e.g. some goods secured in connection with copyright infringement).
Appendix 1 gives the overall number of items and the record value of immovable, movable and financial assets. Appendix 2 gives the flow of immovable assets in 2007. Charts show the distribution of both movable and immovable assets according to individual RO.
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Pict. 5. The immovable assets numbers according to regional offices.
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Pict. 6. The movable assets numbers according to regional offices.
The total effectiveness of property management is given by legal limits, and by the structure and character of the property as such. Concerning immovables, the current state of immovable assets records; accessibility of necessary documents for identification of given property; and reliable documentation of acquiring titles are also needed.
4.1 Structure of assets
On 31.12.2007, the total volume of assets in accounting, or record (for assets in operative records) prices is 21,139,409,302 CZK, in 394,763 items.
The real value of the assets is only found during their implementation. Based on a professional estimate of the comparison of implementation and accounting prices of a sample of implemented immovable assets, the real value of the immovable assets can be considered as at least triple of the accounting values. This estimate is valid contrary to the fact that a large part of assets items cannot be practically implemented.
Basic assets structure can be seen in table 7 (for detailed information see Appendix 1). Concerning the immovable assets, the largest part is represented by land – a total of 200,003 parcels (that is 51% of all assets recorded in SPIS, and 97% of all immovable assets) is recorded at the PISRO.
|Type of assets |Items (pieces) |Rate in % |
|Immovable assets |204 203 |51,73 |
|Movable assets |189 676 |48,05 |
|Financial assets |884 |0,22 |
|Total |394 763 |100,00 |
Table 7. Number of individual assets items
Numbers dealing with movable assets require special comment. The high number of immovable assets items in accounting is especially influenced by the number of office assets items used for their own activity. These items also partially include the assets of administrative buildings, which are (based on borrowing) used by other organizational state units, or regional self-governing units, including mobiliary. Concerning the items of movable assets (see Appendix 1) recorded in operative records, it must be said that the implementation of majority of these takes places within several weeks or months from their acquisition. On 31.12.2007, their number thus represented only about one third of the movable assets items, which ‘went through’ the operative records within the entire year. This is reflected in the amount of related work and relevant costs.
4.1.1 Buildings and constructions
Of the total number of 4,200 buildings, constructions, and housing units and non-residential buildings, which were recorded by the Office on 31.12.2007, three quarters are buildings and constructions recorded in the LR; approximately one third are constructions not registered in the LR.
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Pict. 7. Structure of buildings, constructions, and units
The largest part of the buildings recorded in the LR consists of buildings intended for living, civic facilities, and other constructions. Pictures 7 and 8 offer clear structure of assets.
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Pict. 8. Exploitation of buildings and constructions (according to the land registry data).
Items marked as ‘object for living’ mostly include immovable assets used for physical person housing, which were acquired by the Office as escheat.
4.1.2 Land
The basic condition for dealing with immovables is their complete legal and physical identification. This is a serious problem with land recorded in the co-called simplified records (especially of the former land cadastre.
These are originally agricultural and forest lands without existing borders. In the past, they were united into larger land complexes, and up to the time of their display on a cadastral map, they were registered using the former land cadastre, real estate records, or continuing rationing and consolidation procedures. It often happens, that the graphics of the former land records give contradictory data. The implementation of majority of land in the simplified records thus requires geometric survey.
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Pict. 9. Land rate according to the method of land registration
In simplified records, land represents about one fifth of land items, more than one third of the area. This reflects their origin, as mentioned above.
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Pict. 10. Exploitation of land recorded in the land registry records
To understand the serious problem of simplified records, it needs to be said that only one third of cadastral areas do not have their land registered in the simplified records (i.e. the entire cadastral area is covered with land registry parcels. This problem will be fully solved only after the digitalization of the land registry. This, however, progresses in an insufficiently slow rate, from the point of view of both public administration and private subjects.
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Pict. 11. Land structure according to number of items (in size range), given in m2
The picture of ways of exploitation gives idea on possible ways of implementation and resulting earnings. It can be seen in picture no. 11; the largest part (35%) of all land in the LR records does not show the ‘land exploitation’. Most of the area of land that has the information on its exploitation then consists of other paths (16%); roads and highways (10%), and various bodies of water (9%; more that half of them consists of streams in artificial or natural river beds). This means that the properties of over half of all lands, which give information of the way of their exploitation, cannot be implemented against payment, and are thus transferred for free. This is reflected in the implementation rate of costs and earnings of these assets.
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Pict. 12. Land structure according to size (in size range), given in m2
Rates of the number of lands according to size show the difficulty of their implementation. Almost a third of the land is of the size to 100 m2; another third lies in the range between 101 m2 and 500 m2. This fact itself, with exceptions, represents an obstacle to any commercial implementation. Communities do not usually want to accept these lands either.
4.2 Specific property management problems and property implementation
The large amount of immovables is connected with the general problems of: incomplete restitution or other legal proceedings; uncertainty of acquiring titles; insufficient identification (land in simplified records); and other legal or factual obstructions, which cannot be directly influenced by the Office. Implementation of land for which the state can only gain a joint ownership is also complicated and time consuming. All joint owners often cannot be tracked; an offer from the title of pre-emotive right cannot be made; and it is therefore impossible to transfer the land onto another subject.
Unless there are serious reasons for direct selling, the Office disposes of the immovable assets in favour of private subjects by means of competitive bidding. According to the competitive bidding statistics, in only about two thirds of the cases, the assets are sold in the first round. Even repetitive competitive biddings often fail to find a buyer, especially for commercially unexploitable immovables in remote places.
Still, the number of assets managed by the state is gradually decreasing. The decrease in the total number of assets, both movable and immovable (pict. 13), between 2004 and 2005, was, to a considerable extent, caused be the movables taken over after the district authorities. These movables were gradually transferred onto regions and communities, or (in case they were utterly unexploitable) liquidated.
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Pict. 13. Total assets numbers (both movables and immovables) - development in time
The decrease in the number of immovables is a continuing process (pict. 16). It is, however, accompanied by gradual deterioration of assets portfolio, as the implementation of uninteresting immovables takes longer, or is not successful at all.
Furthermore, the most common problems of individual assets categories are given.
Constructions used for slope deformation stabilization represent approximately 130 constructions of the accounting value of about 200 million CZK. These can be mostly found in Moravia, where they are used to stabilize the so-called slope deformations (earth slides). These constructions were built as a fast help of the state after the floods in 1997. Their developers, using purpose funds provided by the MF, were the environmental departments of district authorities. These constructions require demanding, and sometimes expensive, monitoring, or repairs and maintenance. For these reasons, the communities and regions do not wish to accept either the role of developer or the constructions themselves, which sometimes stand on the land in their ownership, from the state. In many cases, the property settlement is not competed.
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Pict. 14. Total immovable assets numbers - development in time
Immovable cultural heritage (hereafter CH) represents only a small group of assets - approximately 0.2 % of all immovables, which the Office is competent to manage. Concerning their character, these are often important assets, with extensive demands on maintenance and operation. They include regionally or locally known chateaux, castles, monasteries, churches, chapels, and other heritage protected objects registered in the lists of cultural heritage and national cultural heritage. Their exploitation is often connected to their previous users, and it is therefore difficult to find an effective way of exploitation, which would agree with both the requirements of the care of the monuments and modern ways of operating. A significant part of these assets is also blocked by incomplete restitution of clerical corporations, which then influences all groups of assets managed by the Office.
Due to insufficient financial means, most buildings only benefit from emergency repairs and necessary vegetation treatment. The complications of the process are reflected in the slow implementation.
Member’s shares in housing associations. A specific duty is the implementation of members’ shares in cooperative flats. After complicated negotiations with various institutions, by the beginning of 2006, the method of inheritance proceedings, deciding about assets of people who were members of the housing association, was unified. Some associations disagree with transfer of the rights and obligations of the association to the state, or with the numeration of the value of the member's share. This may lead to suspension of the implementation until a lawful sentence is delivered.
Stocks and investments. PISRO is competent to manage stocks (hereafter S) and investments (hereafter I), which it continuously acquires in the sense of AP stipulation; this is due to various legal reasons, mostly escheat.
The S and I management includes various activities aimed at preservation and assertion of all rights related to S or I; execution of stockholder’s and partner’s rights; analytical and monitoring activities; keeping of relevant records and documents; archival activities; ensuring safekeeping of stock certificates owned by PISRO; and fulfilment of notification obligation. As the state keeps acquiring new assets, this represents a permanent duty. This duty also includes information gathering on the state S issuers and dividend payouts; finding out about the process and state of liquidations and competitions from the liquidators and bankruptcy assets supervisors; gathering information on testators in case of lost or untracked S; picking up stock certificates across the republic; ensuring operations for marking changes of issue and registered capital for the issuers across the republic; securing company documents, etc. This work is highly time consuming, demanding, and costly (account transfer fees, business fees, etc.). Marketability of S and I is very limited; resulting incomes are infinitely small compared to the expended effort for their implementation.
Property with ecological load. On accepting the immovables, during their management and consequent implementation, in 2007, the Office paid special attention to ecological load removal. The ecological load either influences the ways of their exploitation or may have negative impact on environment or health in the future. The Office further ensures ecological audits of the land intended for implementation within the privatization framework. In 2007, the costs of steps taken in individual cases exceeded 10 million CZK.
Small airports. Further assets managed by the Office include immovables, and movables at several airports, which are used by aero clubs for sport or agricultural purposes. These do not bring any earnings, and are connected with costs and obligations for the owner. In 2007, the Office continued in negotiations about possible transfer of these assets onto the Ministry of Transport. Gradually, twelve airports should thus be transferred.
4.3 Immovables with special legal conditions of disposal
Apart from factually specific groups of assets, their disposal is significantly limited by various legal conditions – beginning with assigned government competence to approve the transfers of administrative buildings, continuing to assets transfers established by law, to assets which are still blocked due to unresolved restitutions.
4.3.1 Buildings of former District Authorities
Concerning the assets of district authorities, the Office has also taken over 269 administrative buildings, which it (in most cases) did not and does not need for fulfilling its duties.
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Pict. 15. Structure of administrative buildings transfer
The Office also functions as a caretaker of these buildings, ensuring services for state organizational units and territorial self-governing units (or other non-state subjects), residing in the buildings, which has a significant impact on the budget. The Office aims at the fastest possible settlement of property relations. All transfers and selected cases of exploitation are subject to government decisions, which are preceded with a discussion in Government Dislocation Commissions (hereafter GDC). Government decision does not replace the authorisation according to the AP. On 1.1.2008, an asset or dislocation change was discussed in all of 269 buildings in the GDC; the government discussed it in 250 buildings. The entire process is time consuming, especially due to difficult negotiations with subjects in a given place, or because of the changes in their own conditions. Administrative building use is clear from the chart. Due to additional changes in the attitudes of district self-governing units and state organizational units, a revocation of accepted government decrees, removal of some of the buildings from government decree proposal, or changes in the GDC recommendation cannot be excluded.
4.3.2 Assets in privatization mode
Part of the assets managed by the Office is subject to relevant provisions of the Act no. 92/1991 Coll. (on the conditions of state assets transfer onto another persons, in its valid version), and to the Decree of the Government of the CR from 17.5.2006 Coll. (on the principles of the methods of privatization completion).
The priority is to complete the privatization of health facilities, which was at first suspended by the Decree of the Government of the CR no. 788, from November 30th, 1998. It was to be completed in accordance with the Decree of the Government of the CR no. 411, from April 28th, 1999, however, it continued till after the issue of the Decree of the Government of the CR no. 367, from April 18th, 2001, on further steps of the privatization of health facilities.
When processing a privatization project, the Office plays the role of a founder. An obligatory part of each founder’s privatization project (hereafter the FPP) is an ecological audit approved by the Czech Environmental Inspection and by the Ministry of the Environment. A completed FPP is submitted to the MF, where the Department 42 authorization committee (Department of State Assets Privatization) judges it. Consequently, it is judged by specialized departments of the MF, as part of the amendment procedure; it is then presented to the intragovernmental committee for approval. Consequently, all projects concerning assets incorporated into the health facilities privatization are approved by the government, according to the Ministry of Health classification. During the authorization process, the Office reacts on approved changes, secures relevant data of the changes and processes them. After the FPP authorization, it is updated, and the project is again forwarded to the MF for its final authorization and sealing. The MF than secures signing a contract with given assignee, which is followed by a formal transfer of the assets and its taking out of the Office records.
|Delivered to the MF in |2003 |2004 |
|Public tender |9 |84.280 |
|Direct selling |3 |903 |
|Free transfer |1 |7.075 |
|TOTAL |13 |92.258 |
|Hereof the earnings for the state budget |85.183 |
*) With free transfers the accounting value is given, the total of earnings is not entered into
Table 9. The number of implemented FPP and their earnings
On 31.12.2007, approximately ten health facilities and about thirty of other assets groups remained incomplete in the privatization mode. The FPP processing is usually prevented by legal defects (unsolved restitutions, legal cases). Housing Association of Prague 6 represents a special case; due to the structure of the assets, the privatization can be expected to be carried out by several tens of FPP. Finally, new cases keep coming up of assets included in privatization in cases of tracking state assets, which are not managed by anyone (as mentioned above in chapter 3.1.2).
4.3.3 Assets transferred to legitimate persons
On 1.1.2003, the Office took over (from the former DA) the competence to manage leased assets (according to section 59 of the AP), and land subject to transfer (according to sections 60a and 60c of the AP – transfers to housing associations, and producer and consumer cooperatives; and according to section 14 of the Act no.
290/2002 Coll. on transfers on civic associations in the sphere of physical education and sport). There also is a special mode for land in authorised face working places.
Leasing of assets according to section 59 of the AP, which replaced the former right of permanent use, follow the mode of the Act no. 1/2007 Coll. It caused, among other things, a qualitative change by requiring the authorised subjects to reapply for relationship adjustment following the end of borrowing period. Table 10 gives the numbers of recorded applications for legal relationship adjustment.
Concerning the number of transfers to legitimate persons, transfers of land under cooperative apartment houses, and of land that creates one functional unit with these (according to section 60a of the AP), are dominant. Table 18 gives numbers of these transfers. These are the numbers known to the Office (as the legitimate persons do not have to apply, and the state is obliged to make the transfer). However, the numbers show primarily individual housing associations. Simultaneously with the transfers onto the associations, transformation of cooperative ownership of flats onto personal ownership of flats takes place, according to the Act no. 72/1994 Coll. (on flat ownership), and individual owners have equal right to the transfer of relevant land part. It can be expected that the number of transfers is an order higher than the one given in the table. In regard of the above mentioned, more precise data can only be guessed at.
The entire process is not only growing, but simultaneously becoming more complicated (numbers of legitimate persons and changes is growing; e.g. due to divorce of owner of the flat, his or her death, and inheritance). Before the transfer, it is also necessary, aside from the standard property rights verification, to establish the functional unit. Due to the lack of unique interpretation of this notion, problems arise especially where the transfer contracts will be negotiated with unit owners, while a consensus needs to be reached concerning the size of the entire unit. The chart shows that this problem is uneven in individual districts.
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Pict. 17. Transfers of assets under tenement houses according to section 60a of the AP, according to regions
Another complicated, though from the point of view of size almost completed, process is represented by transfers in mode of section 60c of the AP, concerning land that is functionally related to buildings of consumer and producer cooperatives.
Last significant process of this kind consists of transfers of land according to section 14 of the Act no. 290/2002 Coll. These include protocol transfers of assets onto civic associations from the sphere of physical education and sport. Both processes can be considered completed; the remaining unsolved cases are usually subjects to legal obstacles preventing the transfer, or a proper application documentation is missing.
It needs to be said that the Office is not he only state organizational unit, which implements the above mentioned transfers onto legitimate subjects. Similar processes are in charge of such competent bodies as the NCPA; within Prague it is the MF.
|OGRPA |Number of |Section 59 of the |Section 60a of the |Section 60c of the |Section 14 of the |
| |cases/applicants |Act no. 219/2000 |Act no. 219/2000 |Act no. 219/2000 |Act no. 290/2002 |
| | |Coll., on |Coll., on housing |Coll., on producer |Coll. on |
| | |borrowings |associations *) |and consumer |physical education|
| | | | |cooperatives *) |and sport |
| | | | | |associations |
|Situation at the end|Total of registered |2 562 |12 652 |1 657 |1 551 |
|of 2007 | | | | | |
| |Total of implemented |847 |10 063 |1 502 |1 424 |
| |Remain for implementation|1 715 |2 589 |155 |127 |
|*) section 60a deals with the number of associations; estimated numbers of persons are tenfold. |
Table 10. Transfers of immovable assets onto authorized subjects
Land in face working places. According to the Act no. 150/2003 Coll., a subject who was appointed a face working place (following present legal regulations), placed on land owned by the state, is entitled for preferential negotiation of either a purchase contract or a lease for this land. The only condition of the transfer is a timely filed application. The fundamental problem is completion of property and territorial land identification. It also needs to be found whether a given land really is affected by production; including the determination of land, the management of which (according to valid legal regulation) is supposed to be the responsibility of the Land Fund of the CR. These lands are subject to specific and complicated legal regulation and records (parcel and property relationship genesis from LC to LR is more complicated than with other lands). Border lines of face working places intersect land borders; especially with land in simplified records, it is not always possible to manage the transfer without a geometrical survey. Another problem represents the fact that the law does not determine any time limit for the transfers. Some mining subjects thus postpone the purchase, while blocking the land for other use.
4.3.4 Assets at road border crossings
Assets operation and maintenance, as well as their purposeful and economic use, were ensured throughout the year by both state and non-state organizations at 62 road border crossings (hereafter the BC). Most of the BC was used by the Police of the CR and Customs Authority, or even auditing bodies (hereafter the AB) of neighbouring countries, for free, on the basis of international reciprocity agreements. The chart in picture 18 shows the exploitation of BC during 2007.
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Pict. 18. Exploitation of buildings at border crossings in 2007
The adhesion of the Czech Republic to the Schengen Agreement brought, aside from other things, the obligation to carry out the construction and technical adjustments aimed at the removal of obstacles in traffic safety and continuity. In 2007, the Office ensured necessary changes at two BC. It also prepared the projects of construction-technical changes of 27 BC, placed at highways and 1st class roads – these changes will take place in 2008; their expected costs are 80 million CZK. Remaining BC adjustments, i.e. on the 2nd and 3rd class roads, in accordance with relevant decree of the government of the CR, will take place between 2009 and 2010; their expected costs are 30 to 40 million CZK for each of those two years.
Before the end of 2007, the assets at BC were offered to state organizational units, in accordance with the AP conditions. The Office also addresses districts and communities, to shorten the building maintenance expenses; only about 15 to 20 % of these buildings are expected to be interesting for potential commercial use. Until its implementation, the Office must also provide adequate security surveillance of the assets, which will (in most cases) remain temporarily vacant.
4.3.5 Transfers of assets of comparable legal mode (group transfers)
In order to speed the redundant assets implementation, the Office found certain assets categories, which share their character and legal conditions of potential transfer. These are mostly lands built-up with roads, transferred to the road owner according to the Road Act; bodies of water; forestland; and agricultural land managed by LF of the CR, the records of which are not yet changed in the Land Registry.
Land under highways and 1st class roads are transferred into the management competence of the Road and Highway Headquarters of the CR (hereafter the RHH). Land under 2nd and 3rd class roads is transferred to the ownership of districts; land under local roads to community ownership. Relevant board of representatives must authorize the acquisition of immovables. Both districts and communities, as well as SOU, require, as one of the necessary conditions of assets acceptance, the documentation of acquiring titles to the state.
Bodies of water are transferred onto the Agricultural Water Administration (hereafter the AWA), or to the territorially relevant watershed administration. Forest lands are transferred to the Forests of the CR, s.o.e.. Land recorded as tracks is transferred onto the Railway and Transport Road Administration, or to České dráhy, Ltd.. Finally, plough land records, for the management of which the LF CR became competent (by 1.7.2002 the latest), and the LF CR still has not recorded them in the LR, are continuously dealt with.
Following these principles, almost 31 thousand land items intended for transfer to the state and districts were detached. This represents approximately 15% of all state land in the management competence of the Office. Table 11 shows the land structure in selected groups. (The table does not include about 34 thousand more land items under local and purpose roads, intended for transfer onto communities.)
It is clear that the rate of increase and decrease of selected land groups is not favourable. The high increase of relevant land items, given in the table, is caused by increase of assets in the operative records; and also (more often) result from the digitalization of land registry, other cadastral operate changes, and division of land by a geometrical plan.
|Type or way of utilisation of a|Increase in |Decrease in |Difference in |State on |
|parcel |2007 |2007 |2007 |31.12.2007 |
|Forest land |921 |1 403 |482 |3 456 |
|Plough land |1 992 |1 971 |21 |5 251 |
|Body of water |1 805 |1 885 |80 |14 141 |
|Track |35 |15 |20 |403 |
|Highway |62 |86 |24 |111 |
|1st class road |42 |46 |4 |823 |
|2nd and 3rd class roads |1263 |848 |415 |6 785 |
|Total |6 120 |6 254 |134 |30 970 |
11. Land included in group transfers, according to type
The existing negotiations with future acquirers brought some factual and legal limitations of the expected transfers. The RHH CR will not accept other assets than lands, or their parts, directly under roads; these will be, if necessary separated on the basis of geometrical separation plans. Transfer of the land under 2nd and 3rd class roads to the districts is subject to authorization of the district board of representatives.
The AWA only accepts land, which it needs for its work, i.e. if the land exceeds the streambed, the AWA will only accept relevant part of the land. It will not, however, provide the geometrical separation plans. Forest land transfers are happening continuously. An exception is represented by joint shares, which Lesy ČR refuses to accept.
Given group transfer obstacles are caused not only by quantitative view, but mainly by the currently valid legislative, which bans the organizational units from acquiring assets they do not need for ‘fulfilling state functions, or other tasks within the framework of their competence or established subject of activity’. Nevertheless, this is interpreted in different ways by individual subjects. This leads to separation of ‘useless parts’ of land i.e. land exceeding the borders of a highway, road, or body of water by a geometrical plan. Simultaneously, the implementation chances of the remaining separated neighbouring parts are much lower or none and the amount of items to be implemented is rising. Furthermore, spatial identification requires high financial and time expenses. The interest of the state to manage the assets effectively is thus, to a certain point, suppressed by the interest of individual state subjects. Group transfer experience has shown that individual regulations of the Office, aimed at the rationalization and effectiveness of its activities, can only have a partial effect in a situation, where the implementation obstacles are completely out of its reach.
5. Coordination of disposal with administrative buildings
The Government reserved its right to administrative buildings disposal, and placement authorization of SOU and state organizations already in 1992. Based on its Decree no. 107 from 1.2.2006, the Regional Dislocation Commissions (hereafter the RDC) were managed. They work within the framework of administrative district of territorial positions of the Office, with the exception of the Territorial Office in Prague, and other towns where the SOU or state organization residence is established by the law (these are subject to GDC or the Government). The RDC chairmen are managers of individual territorial position of the Office
Experience has proved that the RDC help to improve the efficiency of property disposal, as well as the placement of SOU and state organizations. To optimise the use of this property, it is necessary to create a review of the exploitation of buildings in state property and to set normatives of use according to activity types. Such information is crucial for effective operation of RDC. Most European countries also use economic instruments (e.g. use for fees even for state departments and territorial self-governing units). From the point of view of increase in effectiveness, these are simpler and more effective than direct administrative decision making.
6. Management of assets secured in penal proceedings
The Office is in charge of selected activities according to the Act no. 279/2003 Coll. (on securing assets and things in penal proceedings, and on the change of some laws), which has been valid since 1.1.2004. The police authorities, prosecuting attorneys, and judges authorize the Office to the administration of assets and things secured in penal proceedings. Furthermore, according to section 5 of this Act, the Office is in charge of general supervision over the disposal of secured assets. If the secured assets are forfeited to the state according to section 51, par. 1 of the criminal law, it is further disposed in the mode of operative records.
The administration of secured assets is gradually growing. It has been changed after the amendment of the Act no. 279/2003 Coll., and the Act no. 141/1961 Coll., of the Code of Criminal Procedure, by the Act no. 253/2006 Coll. The amendment has radically changed the range of secured assets; things used in a criminal act, things gained as earnings in connection to a criminal activity, or things intended for a criminal act (there is no connection to the legal relationship of the thing to the accused), become secured. Simultaneously, another subject was added, which determines the security (apart from court and public prosecutor’s office, it is now also the Police of the CR). Secured immovables are legally secured with a seal in land registry. The consequent care for the immovables is factually related to the physical condition of the immovable asset (its need of maintenance and protection; potential demolition proceedings, etc), and simultaneously to its legal condition (if the immovable is without users, or if it is used for its purpose, if it is necessary to monitor the process of agreed beneficial use), because it always represents an ownership right intervention with possible extensive consequences.
Compared to last year, the financial value of administrated assets is lower. Still, the number of administration authorizations and the number of administered assets items both show rising tendencies in almost all kinds of administered assets. Compared to 2006, the increase in movables is approximately 230 items; in land it is 86 items; and in buildings it is 33 items. On 31.12.2007, the Office managed secured assets of the total value of about 130 million CZK. The table in Appendix 1 gives summed figures. It does not include bills worth 73.4 million CZK.
The work of secured assets administration is both factually and legally demanding; it often includes luxury or other special assets (collecting objects, etc.), and the owner of the assets is in most cases trying to make the execution of the state power more complicated. With regard to the priority of the Ministry of the Interior to seek criminal activity earnings and drain them, a future increase in the amount of work can be expected.
After a four year experience with secured assets administration, and compared to foreign experience of similar institutes (e.g. Netherlands), it needs to be said that the rate of expended direct (service payments) and indirect (administrative operations) costs against the effects of the security can be considered satisfactory. Despite great effort, decrease in costs, by selling secured things, especially passenger cars, has still not been reached. However, the possible tools for improvement are fully in hands of bodies active in penalty proceedings, or in a purposeful change of legislation; the Office has practically no chance to influence these processes.
7. Other tasks
7.1 Legal Community Representation
Based on a written agreement, the Office provides communities with a free legal help consisting of community representation in court proceedings, in which the community faces the right to determination of proprietary right to immovable assets (according to sections 13a to 13d of the Act). By request of the community, in these proceedings, the Office can also play the role of an interpleader aside from the community, in case the state in interested in the result of such proceeding. The duties mostly include cases based on alleged restitution rights.
7.2 Legal standpoints
In significant or legally complicated issues concerning assets, the SOU, state organizations, and LF CR can ask the Office for a legal standpoint according to section 13 of the Act. In addition, the Office provides other subjects with legal standpoints, as long as it is purposeful for the state with regard to the seriousness and character of the issue.
7.3 Cooperation during land treatment
Land treatment (hereafter the LT) carried out by land registry, according to the act no. 139/2000 Coll., on land treatment and land registry offices, and on the change of the Act no. 229/1991 Coll., on property relationships to the land and other agricultural assets, create a fundamental part of the activities necessary for introducing order into the land ownership. This is essential, for example, in the area of future highway construction, etc.
Considering the character and distribution of land it manages, the Office is a participant in most LT. In an LT proceedings, the Office defends the rights and legal interests of the owner, especially during listing and demand estimating with a series of sectional solutions; joint ownership settlement; proposition of new land arrangements; and both sectional and final decision making of the land registry. The LR also requires that the Office functions as a guardian in cases dealing with assets, which were up till then recorded in the OL no. 1, or for a perished state enterprise without a successor.
8. Activity provision
8.1 Funding
The budget of the Property Issues State Representative Office represents a part of the state budget Chapter 312 - Ministry of Finance. Within the specifications of the agreed budget Chapter, the Ministry then established the amount of all binging guides, both expenditures and receipts, for the Office. Compared to 2006, this binding guide showed an increase of 219,934 thousand CZK, i.e. from 180,066 thousand CZK to 400,000 thousand CZK.
Total expenses (wages and related expenses; other common expenses; and programme funding expenses) for 2007 were established at 1,817,193 CZK, with an interim increase of 8% against 2006. Real expense drawing was at 91% of authorized expense indicator total. The unused part of the budget included both wage and programme funding means, which were, in accord with budget rules, transferred to the reserve fund. Consequently, these will be used for funding activities continuing in 2008.
In 2007, the real wage performance of the Office reached 1,058,399 CZK, which is 254,225 CZK more than in 2006. The largest part of the Office wages (70% of the total amount) is created by capital income from implemented asset sales.
The second largest income item is represented by earnings from leasing the assets managed by the Office, creating 14% of the total income amount.
Comparing the incomes between 2005 and 2007, their interim increase is obvious.
|YEAR | 2005 |2006 |2007 |
| | | | |
|Total income: |519 893 |804 174 |1 058 399 |
|(without transfers to its own funds) | | | |
Table 12. Development of Office income (in thousand CZK).
The income data needs to be judged especially in connection with the fact, that from the total of immovable assets implementation (i.e. number of transfers), which was about 30 thousand items in 2007, only less than 4 thousand of these were transferred against payment. On the contrary, 26 thousand (87% of the transfer total) were transferred free of charge.
The rate between charged and free implementations of immovables illustrates the fact, that the activity of the Office is primarily aimed at fulfilling state tasks and district and community service, as required by the law. Charged assets implementation is thus only one, though important, part of its tasks.
8.2 Information technology
Given the extent of its work and the amount of assets, the Office necessarily needs to have adequate information and communication facilities. These are crucial not merely for the work itself, but also for optimising state assets disposal, which is reflected in increasing capital income.
2006 was a significant milestone in the information systems of the Office. In this year, two new information systems were launched in its productive environment. The State Property Information System (SPIS) deals with the administrative work of Legal Negotiations; Legal Standpoints; Assets in Operative Records; and Assets in Accounting. The SPIS introduction increases both the quality of work organisation and productivity; most importantly, it offers the possibility to find relevant information needed for management decisions quickly and precisely.
The SPIS is a pivotal information system of the Office. It allows to search, file, and control state assets. Consequently, as a process system, it manages assets administration from its acquisition and inventory to assets implementation. The possibilities and benefits of the SPIS for the state are proven by the interest shown by other state organizations. A cooperation has been commenced with Povodí Vltavy, s.o.e., when a Memorandum of cooperation between the Office and PVL enabled the access of the SPIS service for registration and administration of the assets of Povodí Vltavy, s.o.e.
The Office remains prepared to offer SPIS for further use by state organizational units, and thus help to create a quality state assets records. When building the SPIS and getting software equipment, the Office does its best to provide such contractual conditions, that in case other state organizational units use the SPIS, the possibility to share the SPIS data and software is ensured.
Simultaneously with the SPIS, the File Service Information System (FSIS) was launched. It operates with all written document flows, including authorization processes. By way of interface, it accepts defined templates of contracts and other legal documents from the SPIS.
Deep integration of the FSIS and SPIS allowed by interface enables to add documents and files related to relevant assets to the assets recorded in the SPIS. Straight from the SPIS, the employees can specify asset claims to individual tenants. They can also generate the contracts from the SPIS directly to the FSIS, from where they are, after going through the authorization workflow, forwarded through the filing office out of the Office.
On their delivery to the Office, all documents are scanned and delivered electronically to factually or locally adequate departments of the Office to be dealt with. The use of FSIS allows fast search for a required document; it enables the head employees and the control department to carry out operative inspection; it also helps to improve the transparency of correspondence and file management.
In 2007, a development of the SPIS economic module was launched. Together with other modules and the FSIS, it will provide the Office with a complex information system. Economic module MyFenix, coming out of the SAP platform, will fully reflect valid legislative. It will also treat all spheres of economic and accounting administration of the Office, including a follow-up controlling. Te existing used economic information system, which cannot be further developed according to the Office needs, is no longer sufficient for the requirements of new state property information system. After it is completed and tested, an interface will be prepared, which will allow to reconnect the flow of documents between the economic module and the FSIS.
8.3 Staffing
In 2007, the Office was not successful in acquiring the full extent and required structure of specialists needed to increase its effectiveness and broaden its activities. The fact that specialists on asset issues are valued considerably higher, on the job market, than what the Office can afford, represents a serious problem. This is also true about municipal authorities. Still, the Office had to provide quality results in property issues state representation; during reduction of useless assets, and their implementation; and during effective state assets administration.
With regard to the unfinished extent of the Office activities, it is expected that the budget employees limits will be met, finding quality specialists for crucial spheres. At the same time, the 3% interim employee number reduction between 2008 and 2010 needs to be respected.
|Year |Reality |Comments (reduction – increase) |
| |Physical figures, always | |
| |on 31.12. | |
|2002 |441 | • On 1.7.2002, 389 of new established positions open; 30 positions transferred from the |
| | |MF; 176 positions delimited from DA |
|2003 |2646 |• increased by 1109 positions after the dissolved DA |
| | |• 1266 employees were dismissed (‘impossible to classify from the DA’ and from ‘liquidation|
| | |groups’) |
| | |• 49 positions were reduced (2%), according to Government Decrees no. 624/2003 and |
| | |no.808/2003 |
|2004 |2194 |• 4 established operation positions were transferred to MPSV |
| | |• 56 positions were delimited from the CDG, according to the Government Decrees no. 56/2003|
| | |and 653/2002 |
| | |• 50 positions were reduced (2%) |
|2005 |2212 |• 2 positions delimited at the MC (National Heritage Institute – chateau Kunštát) |
| | |• 49 positions were reduced (2%) |
|2006 |2180 |• 4 positions of operating employees from the MF were reduced (after the dissolved NPF) |
|2007 |2145 |• 2 positions delimited on 1.3.2007 to Chapter 304 – the Government Office, according to |
| | |the Government Decree 167/2007 |
Table 13. Number of the Office employees since its opening to 2007
Here are some influences reflected in the number of employees of the Office:
• Increase in number of employees needed for activities and standpoints concerning the price issues of the other state units
• Inventory of the entire assets of the CR
• Transformation of the assets of the state
• Amendatory Act on executors
• Cooperation with the MF in solving property suits after the dissolution of the CCA
Table 13 clearly shows the development in the number of employees since the foundation of the Office to the end of 2007.
8.4 Communication with public
The Office pays special attention to the communication with public. It exploits press, broadcast, television, and electronic media, to which it regularly sends a press release. In 2007, it published 109 press releases, and sent 133 press announcements. The Office also keeps in touch with independent press. In 2007, there were 90 presentations of the Office on television; 101 broadcast presentations; and 742 presentations of the Office in press media. This sphere also includes an independent writing in specialist media (especially in magazines Veřejná správa and Moderní obec). In 2007, these magazines issued 18 technical articles written by employees of the Office. Special attention is paid to fulfilling the information obligation of the Office, according to the Act no. 106/1999 Coll., on free access to information.
8.4.1 Web pages uzsvm.cz and common electronic communication
The web presentation is available since the foundation if the Office in 2002. It provides wide public with both basic information (organizational structure of the Office, contact addresses, methods of delivery) and with full versions of selected documents (acts related to the Office, summative reports on its activity, etc.). An important part of this presentation is represented by the news bringing information on individual activities of the Office. In 2007, the web pages published 240 news items related to the activities of all regional offices of the Office. They have been visited by a growing number of people. In 2007, over 78 thousand IP addresses were recorded, from which the Office web pages were accessed. About one fourth consists of regular visitors.
The web pages also inform citizens on important facts, such as legal limits for claims. On the main page, there is a link to the Information centre (phone numbers, and e-mail to the filing office), open to all questions. Moreover, there is a special e-mail address for questions related to assets disposal.
8.4.2 Assets offer through web pages
Every time assets are offered in competitive biding and advertised via standard media, the offer is also placed on the web pages. During the four years of the existence of this service, it was used to advertise over 2.5 thousand offers. Those who are interested can order regular news delivery. Such a functional web assets offer is so far unique within the Czech public administration. By the end of 2007, over three thousand applicants, including real estate agencies, had the offers sent automatically.
The described system of offers also has the additional information on direct immovable assets transfers to increase the state assets disposal transparency for the wide public. This service represents about 500 announced intentions per year.
8.5 European cooperation
In 2007, the Office joint the cooperation within the European Union (hereafter the EU). Historically first meeting of the subjects managing state assets in EU countries took place in Rome, between October 18th and 19th, 2007. The conference on ‘Public Real Estate’, organised by the Italian state agency Agenzia del Demanio, was attended by 22 representatives of EU countries.
The conference focused on the management of immovable assets owned by the state in EU countries; the position and role of subjects managing immovable assets of the state in EU countries; the problems of reaching goals and productivity of entrusted activities; the effectiveness of management economy; new forms of state immovables funding; and inner management of relevant subjects. Main results of the conference were mutual introduction; exchange of experience; processing of the analysis of the situation on European state immovable assets market; and acceptance of the PREN (Public Real Estate Network) initiative, i.e. electronic network of the state immovables management, which the Italian state agency then launched on its web pages. PREN is primarily aimed at the exchange of information and experience of common interest to the participants.
It is clear, from the conference and presentations of subjects managing state immovable assets, that in many of the so-called old EU countries, the state immovables were transformed before 2003; in some countries, the process of transformation is still continuing.
Prevailing common aim of the transformation is the increase in effectiveness of the state assets management; one of the main criteria is the financial earnings. To reach this goal, most EU countries underwent the necessary organizational and legislative changes, adjusting the position of state assets. Main feature of these changes is centralisation, of primarily government, but generally the state immovable assets, under one umbrella controlled by the state; and creating conditions for effective management of government, or state immovables.
The result is that in most of the old EU countries, specialised business companies, or agencies founded by the state were dissolved (e.g. Italy, Austria, Germany, and Scandinavian countries); their management is subject to economic rules. In other EU countries (e.g. Spain, France, GB, and Netherlands), new specialised central institutions were founded to manage, control, and coordinate the management of state immovables, especially government buildings. Most of them have common features, such as business principles management; effort to improve the portfolio; and outsourcing of many activities. They also use economic tools and narrow connection between requirements and obligation, primarily using the principle that the required services (dislocation; new-buildings; other services) are covered, and budget means are provided, by the subject using them.
The conference has also shown that the new EU countries, with the exception of Estonia, have not yet proceeded to this transformation of state immovables. Still, the immovables owned by the Czech Republic, and the position of the Office in the sphere of assets management, essentially share many factors common to the EU countries. These include: Relatively high level of regulation in assets disposal; partial or complete public funding; decentralisation of activities (regional offices); quality information system related to the portfolio managed; high importance of quality assets management; given strategy for further portfolio development. However, most subjects managing state assets are based on the principles of management based on business principles, and respect the rather uniquely defined strategy. According to all available information, it seems that the so far unsatisfactory property rights state of the immovable assets records in the Czech Republic (simplified land records; unsolved restitutions; unreliable acquiring title, etc., which consume a considerate working capacity of the Office) is unique among the European countries.
9. Conclusion and Prospects
9.1 Recapitulation of current state
Five and a half years after its foundation, the Office became a stabilised institution; it specialises in state representation; tracking and accepting assets into state ownership; disposal of the assets of the state, as well as of third persons, which were secured in penal proceedings; and some other tasks.
The importance of state representation is obvious from the number of proceedings for other organizational units (approximately 450 by the end of 2007), and from the financial values of individual legal processes. From the point of view of efficiency, proceedings related to the assets managed by the Office (approximately 4500 by the end of 2007) bring a significant effect. The duties connected to state representation are expected to have mild, though permanent increase tendencies, especially in the sphere of representation of the state organizational units against an agreement. Due to the connection of its quality legal service and high specialisation in assets disposal, the Office becomes a highly qualified assets institution in its field.
The Office also manages a great number of assets, which are not commercially interesting. Still, these need to be thoroughly ‘cleaned’ (i.e. spatially and legally identified), so that the state assets management meets the basic legal standards. This is not a merely formal request; it has a significant influence on subsidy applicants, especially if the subsidy comes from the EU funds. An outer factor, which can make this easier, is speeding up the cadastral map digitalisation. Following the current speed, this process will take about twenty years to finish.
As said in the introduction, if the current legislative conditions are kept, not much will change considering the amount of duties. Two exceptions are the secured assets, the future development of which will depends on the development of legal issues; and assets intended for implementation, the amount of which is continuously decreasing, and keeping the current tempo, their implementation might be over after 2020. Compared to the history of LF CR (which, contrary to the Office, represents a typical transformation institution, and was founded 17 years ago), this vision is realistic. It needs to be said, though, that a strategy primarily focused on gradual (immovable) assets dispossession leads to gradual deterioration of the assets portfolio structure. If the current conditions and methods are kept, implementation of all useless property cannot be expected. In stead, a small amount of permanent residue of utterly worthless, and further unusable, assets will remain.
The fundamental law of assets management is the AP; it establishes both the basic philosophy and factual rules of sate assets management. The fact that the Office was founded simultaneously with accepting the assets after DA brought, aside from other things, two new important features into the state assets management. The first change represented the foundation of an institution not expected by the AP - the Office - its duty being the state assets management. From this point of view, it is still not sure whether the AP definition of ‘useless assets’ used for the assets managed, or acquired, by the Office is sufficient. In practice, this deficiency was clear, for example, on accepting the assets from the NCPA, or when accepting the assets at road border crossings, based on a government decision. In both cases, the assets accepted were, in the sense of the AP useless for the Office. When dealing with assets, the Office always handles this problem by considering the assets useless for ensuring the activity of its own employees ‘useless’ in the sense of the AP. However, this understanding the ‘uselessness’ blocks effective management, e.g. the assets portfolio optimisation, which would subsequently result in higher state budget income and costs savings. In this connection, it is necessary to state that further AP amendments gradually reflected the specific role of the Office. To increase the sate assets management effectiveness more significantly, it is necessary to go even further and create conditions for formulation of the strategy of useful state assets in general.
The issue of ‘uselessness’ also includes one important aspect related to immovable assets. Current version of the AP only has the decision on uselessness for given SOU; however, state uselessness is investigated on a wider scale – if it is unsuccessful with all relevant SOU, the assets are considered useless for the state. If the assets useless for a given SOU cannot be implemented, they remain in the ownership of the SOU for good, without the possibility to increase the changes of their utilisation or implementation (e.g. by their centralisation into a common state assets portfolio, which might significantly change its current ‘uselessness’).
Another change, brought on by the foundation of the Office and consequent issue of the Act no. 320/2002 Col., is the centralisation of the assets after DA into one institution. While couple thousand items of assets could not be at the centre of attention of the DA, and the effectiveness of their management was reflected in the DA management only marginally, the amount of two hundred thousand assets items requires concentration on the effectiveness; it also requires different attitudes. Another result is that the problems seen as marginal, from the point of view of individual DA, prove to be serious during the assets centralisation. In the sphere of immovable assets management, these problems include unknown owners; simplified records; unsolved acquiring titles, etc. It is in the interest of state to solve these problems, which existed before, but only became visible with the foundation of the Office. The Office is an institution fully equipped to solving these problems.
All activities currently managed by the Office definitely are useful fro the state. Currently, the Office represents the only state institution, which is adequately equipped, both by specialised personnel and by necessary information technologies, for the necessary state assets management. It is important to seek ways of increasing the effectiveness of these activities, not only inside the Office, but mainly by simplifying the methods, including legal regulations, which adjust these methods, together with preservation of necessary and purposeful auditing mechanisms.
9.2 Further prospects
• In the sphere of legal representation, it would be useful to create a central registry of all suits against the state, or all legal cases, in which the Czech Republic is a participant
• The Office should continue to implement the assets useless for the state; simultaneously, is should be enabled to improve the assets portfolio, both for the purpose of its consequent use by other SOU and for its implementation under significantly more convenient conditions from the current one. This would require adjusting the definition and mode of the ‘useless assets’ (in the current legal mode it does not allow the SOU to acquire assets, while the ‘uselessness’ represents a fundamental condition for transferring the assets to another SOU). A possible solution would be the definition of a status of the Office, different from other SOU in the area, as for an institution specialised in efficient state assets management, the definition of ‘uselessness’ according to the AP is unsuitable. One of the steps taken in this sphere would also be the cancellation of the MF agreement with assets acquisition, which increases the administrative load during decision-making. The MF would, of course, keep its existing auditing mechanisms.
• It needs to be defined which assets are useful for the state, or which assets should remain in state ownership (e.g. immovables profitable on a long-term basis).
• By defining the Office as an institution specialized in care of useless state assets, the current problems would be removed; today one SOU refuses to accept the assets, which it is supposed to be in charge of, while the AP does not provide any enforcement mechanism. It would be purposeful if the SOU could transfer their useless immovables to the Office. The Office would thus centre the state immovables, which would allow their purposeful use for the state, or their more effective implementation (i.e. with a more flexible and higher quality original assets portfolio); it would also allow more effective use of adequate managing tools, increasing the state assets management effectiveness.
• The Office should continue in ‘cleaning’ the immovables, especially in cooperation with CGLRO.
• It is one of the state interests to bring the cadastral records in compliance with factual and legal facts; the Office is the best equipped institution for these purposes. This activity consists in tracking the ownership rights after dissolved state organizations, and removal of duplicate ownership records, with one party being the state or an unknown owner.
• The serious problem of ‘unknown owner’ needs to be legislatively solved (for details see the end of chapter 3.1.3); the state is responsible for solving this problem. The Office is qualified to handle the tasks it was entrusted within the legislative solution.
• The relationship of the MF towards the Office should be made looser, e.g. by removing the authorisation clauses.
• To improve the use of the assets for administrative needs of the SOU, an inventory of the premises in administrative buildings owned by the CR is necessary. Other processes providing permanent topicality of gathered data must follow the inventory. Regarding its competences, and in accord with its equipment for a given task, the Office should participate in these processes.
• To reach the efficiency, a principle of charged use needs to be introduced, even by the SOU, in the way it is used in all European countries.
• Currently, the administration of secured assets is significantly inefficient. An improvement might be reached by simplifying the methods, and judging their purposefulness, from the point of view of both earnings and state costs. However, the only possibility for the Office is to negotiate with relevant institutions (Ministry of Justice, Highest Public Prosecutor's Office, Ministry of the Interior).
• It would be purposeful to elaborate a proposition of medium perspective of the Office work, in context with the complex strategy of state assets disposal (which still does not exist); with its expected authorization by at least the MF. Such a perspective would enable not only more purposeful means planning; it would strengthen personal perspectives of the Office employees, which is always one of the main features of a quality institutional operation, especially when the financial rewarding of state employees is administratively limited.
• The Office should, within the existing SPIS, keep central and complete records of state assets used by state organizational units and state organizations, as a so-called business registry. The Office is equipped with competences and experience for methodical control of other SOU. This should make the management and state assets utilization more effective and united. The SPIS has updated the inventories of individual sate immovables, including the monitoring of both operation and maintenance costs and earnings from rent. Information contained and processed in the SPIS could be used as quality foundation for strategic decision-making of the Government of the CR related to state immovable assets. A complex records of immovables (still nonexistent) would gradually enable to gain more information on the real value of state assets.
Appendix 1: Asset numbers and values on 31.12.2007
|Type of assets | Items (pieces) | Price in CZK |
|Assets |Assets in AA (section|Immovable assets |Buildings, constructions, units | 3 603 | 9 449 460 116 |
|in |9 of the Act no. | | | | |
|account|219/2002 Coll.) | | | | |
|ing | | | | | |
| | | |Land | 192 481 | 8 743 060 952 |
| | |Immovable assets | 196 084 | 18 192 521 068 |
| | |Movable assets | 169 139 | 1 969 485 083 |
| | |Financial assets |Stocks | 1 | 300 000 |
| | | |Investments | 33 | 2 583 651 |
| | | |Other long-term financial | 517 | 16 010 510 |
| | |Financial assets | 551 | 18 894 161 |
| |Total in accounting | 365 774 | 20 180 900 312 |
|Assets |Assets in KR |Immovable assets |Buildings, constructions, units | 527 | 291 261 252 |
|in |(sections 10 and 11 | | | | |
|operati|of the Act no. | | | | |
|ve |219/2000 Coll.) | | | | |
|records| | | | | |
| | | |Land | 7 366 | 426 961 178 |
| | |Immovable assets | 7 893 | 718 222 430 |
| | |Movable assets | 18 722 | 8 171 763 |
| | |Financial assets |Stocks | 199 | 67 489 772 |
| | | |Investments | 117 | 35 907 752 |
| | |Financial assets | 316 | 103 397 524 |
| |Secured assets |Immovable assets |Buildings, constructions, units | 70 | 27 328 972 |
| |(279/2003 Coll.) | | | | |
| | | |Land | 156 | 2 749 890 |
| | |Immovable assets | 226 | 30 078 862 |
| | |Movable assets | 1 815 | 92 957 461 |
| | |Financial assets |Stocks | 2 | 1 184 400 |
| | | |Investments | 15 | 4 496 550 |
| | |Financial assets | 17 | 5 680 950 |
| |Total in operative records | 28 989 | 958 508 990 |
|Total in management competence and administration of PISRO | 394 763 |21 139 409 302 |
Appendix 2: Asset flow during 2007
|Line |Type of records |State on 31.12.2006 |Increase 2007 |Decrease 2007 |State on 31.12.2007 |
| | |
| |2) The increase and decrease also include ‘administrative’ changes, often due to land treatment and changes in cadastral operate. |
| |3) The immovable sum is the total of KR immovable and AA movable, i.e. the transfer from KR to AA (line 3) does not interfere with the total on line 5. |
| | | | | | | | | | |
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PRAHA, CAP. C.
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