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Business Connections #11/2008
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Property Rights

REGISTRATION OF PROPERTY RIGHTS IN
UZBEKISTAN

Property righls arc considered to be one of the most fundamental aspects of the country's legal system ensuring the stability of the economy, the development of infrastructure and institutions. Where property rights are weak, entrepreneurs are not investing as they are unable to keep the fruits of their investments. Alternatively, the strong property rights can be associated with the economic growth and better access to finance. Entrepreneurs as well as foreign investors in general, tend to reinvest more as they feel more secure that their investments will not be taken away. In this respect, it may be important to highlight the basic features of the system of property rights in Uzbekistan, or talking more specifically, what can be owned in Uzbekistan, and how such ownership rights may be perfected via registration.

Uzbek Civil Code codifies the concept of the property making a division between the immovable and movable property. The immovable property consists of the land, buildings, and the enterprise as the property complex. All other types of property arc considered to be movable property (except for intellectual property rights). Whilst buildings, constructions can be privately owned, the land cannot be except for limited cases. As a consequence, for the land, a concept of limited possession and use of the land is being used, where companies can enjoy the rights of temporary or permanent possession or lease of land plots, and individuals can have rights for lifetime (and inheritable) possession, or rights for temporary use or lease of land plots.

Companies and individuals cannot sell or otherwise dispose land plots, although in case of sale of buildings, the right to the subjacent land plot is transferred simultaneously with the transfer of ownership title to the building. The rights to land plots arc allocated pursuant to decisions of regional/district governors (khokims) if the buyer is Uzbek resident or pursuant to the decision of the Cabinet of Ministers of the buyer is foreign individual or foreign legal entity.

The notable exceptions to a limited possession or use rights to the land, providing for a full ownership of the land plot include cases of:
a) privatization of commercial trade and service facilities along with plots of lands on which such facilities are located;
b) sale of land plots and/or buildings to representative missions of foreign countries or international organizations in Uzbekistan; and
c) sale of living premises along with land plots to foreign companies or individuals who permanently reside in Uzbekistan and work for diplomatic missions, representative offices of foreign companies, international organizations or companies with foreign investments.

Foreign citizens can buy living residences or apartments, however the ownership will be subject to issuance of alien's residence permit and execution of registration with the local police department.

In general, any individual or legal entity can purchase or obtain ownership title of a building by entering into an agreement of sale purchase of the building or construction or via either:
a) privatization of an industrial object in accordance with privatization program; or
b) purchase on the immovable property exchange. However, the title to the building or construction purchased should be registered.

As a rule, all transactions affecting the ownership title, use or possession rights to the land plot, building or construction must be in the written form, and contract on sale of land, construction or building must be notarized (except if the transaction is made on the immovable property exchange). The law also requires that land plots, buildings and/or construction as well as any transaction affecting the ownership title to such objects must be registered with the special organization cadastre. In case of purchase of living apartments registration with the BTI (Bureau for Technical Inventorization) is required.

Subsequent to conclusion of the agreement on transfer of the title, use or possession rights to the property or the land, the parties submit a request to a cadastre (land or buildings) attaching the documents confirming the original ownership title, use or possession rights and a copy of the sale contract. The original document on sale (or conveyance) of rights, lease agreement constitute a legal ground for registration of the transaction and corresponding rights to the property. The cadastres will undertake a check of the information on the records and may conduct the field check up in order to determine exactly the corresponding facts to the ownership records.

The cadastres themselves are the registries that contain regularly updated information about the geographical references to and the description of the object, legal aspects (including encumbrances), qualitative and quantitative aspects of the land or building. The land cadastres also contain the information about the value of the land plot, the general or specific quality of the land plot. The reference from cadastres (an excerpt) is deemed as the valid legal document to confirm the information on the status, applicable legal rights of the itemized description of the land or the building.

Everyone with a property right to the land or the building must have the information about the state registration of the object in the cadastre. After conducting the background checking for the consistency of documents, the cadastre carries on the registration of the agreement, the title or corresponding rights of use and possession, and issue a special certificate confirming the title or the said rights.

In practice for registration purposes, the cadastre adheres to the policy of strict use of the standard forms for transactions as defined in the Civil Code, or other relevant regulations, and may refuse to register agreements
if such agreements or any clauses thereof arc non-standard. For example, the cadastre may register the sub-lease agreement; however the agreement on assignment of rights under the lease agreement may be refused for registration as non-conforming to the list of model agreements indicated in the relevant instruction.

The land cadastre registers the transaction (and/or rights) within ten days from the date of submission of documents, and the cadastre of buildings registers the transaction within one month from the date of submission of documents.

We note that although the process of registration of ownership rights to the immovable property is rather streamlined, it may be time consuming as it may take up to 20 30 business days in order to effectuate the ownership rights on one or another type of property. This article is an overview of the current legislation of the Republic of Uzbekistan provided for information purposes only, cannot be used as a legal advice or relied on as the basis for undertaking any decision.

DentonWildeSapte…


Uzbekistan, 90 Acad. Vosit Vokhidov St. Yakkasarayskiy District 700031 Tashkent, Uzbekistan.
Tel: +998 71 120-69-46 / 120-69-47
Fax: +998 71 120-61-85

Denton Wilde Sapte, Uzbekistan is a representative office of Denton Wilde Sapte Uzbekistan Co. Limited.
Our web site is at http://www.dentonwildes.apte.com
A list of our partners and their professional qualifications is open to inspection at this address.

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