Implementing Electronic

Real estate Conveyancing

System

Land Administration Practices in Finland

Markku Markkula

National Land Survey of Finland

Dec. 4th 2018

Contents of Presentation

• Electronic Property Transaction System (EPTS)

• Structure of Key Register System

• Land Information System

• Population Information System

• Finnish Cadastre in the Future

Finland

• Area 338,417 km2, of which

• 10% is water area,

• forests 77%,

• farmland 8% and

• built area 4%.

Statistics of Finland

• 5.4 million inhabitants

• 15.8 inhabitants per km² (40.5 per square mile)

• 2.7 million real estate units

• 2.6 million buildings and dwellings

• 0.6 million enterprises and corporations

• 3.7 million vehicles

Land register

4.12.2018 2018 EMEA User Conference 5

Land

Register(Oracle)

Main Contents:Titles

2.74 million

Mortgages

3.56 million - 2,6 million in digtal form

530 billion euros total valueRegistrable special rights (188 900)

a lease or other usufruct;

a right to a pension off the real estate;

a right to take timber; and

a right to extract land or mineral resources or

another comparable right of extraction

2010 Land Register

duties transferred

to NLS from

Ministry of Justice2013 new Land

Register

application used in

production

Land Registration cases 2013–2017

Total

Mortgages Special rights

Titles

Mortgages Special rights Titles

2017

Why Electronic Property Transaction System (EPTS)

• Improve availability, quality and provide more customer

orientated services for real estate exchange

• Need for developing web based services for the citizens

(tax authorities)

• Pressure to enhance productivity and service capability in

state offices

• Remove overlapping paper processes

• Utilise fully e-Solutions of other authorities

• Less manual checks needed

• Provide possibilities for e.g. banks to improve their

productivity

Electronic Property TransactionService (EPTS)

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Land

Register(Oracle)

XAutomatic Title

pending

Since 2013

Data InterfaceDigital signature

Banks

Real Estate Agents

Strong authentication with e-bank codes or mobile ID

Notary

EPT-system in brief• Solution for managing activities related to real estate

conveyance

• Secure web-based solution

• Meant for all parties of real estate conveyance (sellers,

buyers, real estate agents and banks)

• Basic principles of the system

• Seller (owner) is always the initiator for the process

• Actor must always be authenticated with strong

authentication

MAANMITTAUSLAITOS – TIETOA MAASTA

Electronic property transaction

§ Electronic property transaction

1. formulating deed of sale (The first EPTS)

2. utilising the NLS system only as a portal for electronic signature

§ Transferring leasehold of real property

§ Electronic pledge

§ Electronic registration procedure

MAANMITTAUSLAITOS – TIETOA MAASTA

Electronic property transaction (EPTS)

§ Electronic property transactions have to be done using the information system maintained by the National Land Survey of Finland

§ The deal is concluded when the seller and the buyer have signed the deed of sale

§ The deed must be signed using an advanced electronic signature or other method that reliably verifies the identity of the signer

§ Electronic form, which is verified using data from the Land Register and other registers maintained by the authorities

§ The system supervises the legality of the contents and the signatures

MAANMITTAUSLAITOS – TIETOA MAASTA

Electronic property transaction – ”associated services” according to written law

§ The payment of the sale price as an ”associated service”

§ Transfer of collaterals using related commitments

§ Transfer tax can be paid using a service offered by the system

§ Sale of real property as a genuine distance sale without public purchase witness (or notaries)

MAANMITTAUSLAITOS – TIETOA MAASTA

Electronic property transaction (EPTS)

§ The conveyance information is transferred directly from the electronic deed of sale to different authorities, notifications to the Official Purchase Price Register are no longer necessary

§ The registration of title is instituted without application

§ The land registration authority processes the case only

electronically

§ Public purchase witnesses (or notaries) are not required

Restrictions

• Register must contain owner’s personal ID

• Precondition to start usage is that you are entitled to act

(based on land register: owner, leasehold owner etc)

• System supports Finnish and Swedish languages

• Payment of large sums (tax, purchase price) is not yet

possible in this system

MAANMITTAUSLAITOS – TIETOA MAASTA

Electronicmortgagedocument

§ hasreplacedcurrentmortgagedocumentsinwritingsinceJuni 1st 2017

§ Consistsofregistrationinthemortgageregister

§ Thelegaleffectsoftheformertransferofthephysicalmortgage

documenthasbeenreplacedbyaregisterentryconcerningtherecipient

oftheelectronicmortgagedocument

MAANMITTAUSLAITOS – TIETOA MAASTA

Electronicservicesinlandregistrationtasks

§ Mortgageapplicationsandtransfersofelectronicmortgagedocumentscanbemadeelectronicallyintheservicesystem,maintainedbytheNLS

§ Applicationsmustbesignedwithasimilarelectronicsignatureaselectronicdeedsofsale,i.e.thesignatureconfirmsapplicant’sidentityreliably

§ Conventionaldocumentsinwritingare,forthetimebeing,analternative toelectronicdeedsofsale(andregardingmortgagedocuments,totheyear2020)

§ Spouse’sandwidow’sconsentscanbegivenelectronically(changesinMarriageActandCodeofInheritance)

17

0

1000

2000

3000

4000

5000

6000

Title Newelectronicmortgage

deed

Newmortgages Transferofe-mortgage

deeds

Interfacecases

ElectronicPropertyConveyance 2013- 2016

2013 2014 2015 2016

CUSTOMER

Bank/RealEstate BrokerNationalLand Survey

ElectronicPropertyTransaction Service

JOINT ELECTRONIC PROCESS

Forproperty issues

PDS

Aim

Land

Register

NationalLand Survey

Propertyseller

Propertybuyer

Integrator

LRClerk

Locked transaction e-document

Calling forsignature

Title automatically

pending

Identification

3

E-signing

5

7

PDS

The state ofthe casecan be checked

E-banking codes; Electronic authentication

Interface

fore-Docs

Calling forsignature

E-signing 6Identification

Selling

Task

PropertySelling

Title

1

4

2

LandRegister

PropertyTransaction Service

RealEstate Broker

Effects

• Effectsonthetotaleconomy,bothonthepublicandtheprivate

sector,dependonhowwidelyelectronicservicesystemswillbe

used.Onlyasufficientutilisationratewillallowprofitsandsavings

tobeachieved.

Key Register

Definition:

• National information system that identifies the basic units of society. These basic units include physical persons, communities, buildings and real properties.

Key Register System 2018

• Integration of register data using IDs and position as links

• 300 million handovers per year

PIS

Key Register

• Characteristics:

• Social significance, coverage, connection of registration numbers (identifiers), harmony, usability and data security.

• The main characteristics are coverage and reliability. Coverage means that the register is ubiquitous and includes all the register units and their official identifications.

• Reliability is based on the fact that it is the authorities’ responsibility to maintain the registers.

• The Key Registers are ICT-based and linked together.

• All data from the Key Registers is available through interfaces. Part of the data is available also in web portals.

Land information system LIS

• Cadastre

• NLS and approximately 70 municipalities update the register

• NLS maintains the register

• One common register since 2005

• Nationwide coverage

• Both land and water areas

• Land Register

• NLS has updated and maintained the register since 2010

• Other Agencies' data

• Land use plans (municipalities)

• etc.

Land Register

• Nationwide coverage

• Contents of Land Register

• Titles

• Mortgages

• All data has negative and positive faith and credit

• The State of Finland can be obliged to pay compensation for any errors

Future: Cadastre and Land Register are one ubiquitous register with several interfaces to other databases

Population information system

• Population Register Centre and local register offices update

and maintain the system

• Basic information related to the identification of people

(Personal data) and buildings (Building data) is registered in

the Population Information System

• The most frequently used key register in

Finland

Personal data

• Physical person’s name

• Personal identity code (person ID)

• Address

• Citizenship

• Native language

• Family relations

• Date of birth (and death)

• GDPR since May 25th 2018

Internationalpointsofview(LR)• Electronicmortgagedocumentsareinuseine.g.EnglandandScandinavia

• TheharmonisationofpropertytransactionswithintheEUwouldbe

simplesttoachievebydevelopingelectronicpropertytransactionsystems

(EPTS)

• TheGerman justicesystemdifferentiatesbetweencontractsofsale

relatingtothelawofobligations(Kaufvertrag)andthelawofproperty

(Auflassung)

• Titleisconveyedthroughregistration(lagfart,tinglysning,lainhuuto etc.)

e.g.intheNetherlands,England,WalesandEstonia

• InNorway andinDenmark itispossibletoagreetoconveypropertyviva

voce,althoughtheseller’sagreementisrequiredinwriting(skøyte,skøde)

for”tinglysning”.

• InFinland ownershipisconveyedwhenthedeedofsaleissigned,

electronicpropertytransactionsystem(EPTS)hasbeenintroducedin2013

• Countrieswithanotarysystem(e.g.Germanyetc.)arepresumablynot

quicklyplanningtointroduceelectronicpropertytransactionsystems

Future Cadastre

- Accurate, coordinate-based, digitised

- Ubiquitous; incl. all easements, right of ways etc.

- Integrated

- 3–5 dimensioned

- Crowdsourcing, internet of things – smart cities

- Building Information Modelling BIM, 3D-properties

- Utility Mapping – digital underground

visualisations

- Open Access – balanced with individual privacy- (source: Lesley Arnold WB 2016 Washington D.C.)

More information

www.nls.fi

Showing the way10.10.2018 2018 EMEA User Conference 31