Pay as you take
Sorting out compensation for land expropriated for public use is one of the division's largest headaches. When it was set up in 1962, it inherited a pile of cases dating back decades - and with insufficient funds, compensation tended to be paid to...
Sorting out compensation for land expropriated for public use is one of the division's largest headaches. When it was set up in 1962, it inherited a pile of cases dating back decades - and with insufficient funds, compensation tended to be paid to those who shouted the loudest. It was crisis management, Mr Sciberras admits, and he was anxious to find a solution.
In 1993, he proposed that any department using the Land Department as its agent to expropriate land would have to put the estimated value into a below-the-line account. (The only exception was the Housing Authority).
This way, when a claim was made by the owners of the expropriated land, the money was there. Compensation was paid at the value at the time of payment, with 5 per cent damages on the price differential over the period from the date of taking over. It was costing the government a "bomb", he explained.
"So, in 2003, we took a massive step forward and started to deposit the money into an interest-bearing account in the owner's name. This means that the government cleared its obligations to the owner who merely has to make a legal claim to the property (using our lawyer, or his own at our expense) for the money to be released," Mr Sciberras said.
"Since 2003, we deposited over Lm8 million in this way, representing a saving of Lm400,000 a year in damages, without prejudicing the rights of the property owner.
"We also transferred the money that was put into below-the-line accounts between 1993 and 2003. So, since 1993, 99.5 per cent of expropriations have been sorted out. Over Lm28 million have been paid in the last eight years.
"It is interesting to note that some Lm6.5 million have not yet been claimed! In the past, it was not worth your while to claim until you needed the money because you would be updating the value and accumulating damages. That is no longer the case. We would urge the owners to come forward now especially as the value of the property has been capped to 2005 values."
That still leaves pre-1993 cases, however, and there is no way to know how many individuals are affected because one parcel of land could have multiple owners. Mr Sciberras said it probably runs into thousands, "not too many thousands, though".
But the reality is that a majority of the cases relate to property expropriated from the Church prior to the Church-state agreement. Discussions are currently underway to seek a one-off solution for these.
"We would solve a large chunk of the pending cases in one fell swoop," he said with obvious relief. Another batch of problems has its origins in the departments that needed the land in the first place.
"Since the department did not have to pay for it, it could afford to ask for more than it needed. Say you needed land for a 15m wide piece of road, you would play safe and expropriate a 35m stretch. If the department confirms that it does not need the extra land, we can give it back. This is what happened in the past: We would receive copies of the project 'as built' which we could then compare to the original request. The problem is that this no longer happens.
"There are also cases where part of a property is used without any expropriation order. Obviously when the owner comes in with a claim, we have no records. You can imagine how long it takes to sort out something like this," he said.
Working out what is due to who is only part of the problem. The real challenge is to find the money for it. In the last budget, the government proposed a bond issue. The Finance Ministry is currently working out the mechanism.
"This is a brilliant idea that we had floated some years ago. The basic idea is to have a basket of properties worth Lm20 million, against which shares or bonds will be issued. So the person would be compensated with these shares or bonds, which they can then keep or sell on the Stock Exchange.
"From our side, we are working to establish which properties could be used in this basket. There are four or five architects in private practice who advise us on the value of property but I will need a lot more resources to do this groundwork," he warned.
In 1993, he proposed that any department using the Land Department as its agent to expropriate land would have to put the estimated value into a below-the-line account. (The only exception was the Housing Authority).
This way, when a claim was made by the owners of the expropriated land, the money was there. Compensation was paid at the value at the time of payment, with 5 per cent damages on the price differential over the period from the date of taking over. It was costing the government a "bomb", he explained.
"So, in 2003, we took a massive step forward and started to deposit the money into an interest-bearing account in the owner's name. This means that the government cleared its obligations to the owner who merely has to make a legal claim to the property (using our lawyer, or his own at our expense) for the money to be released," Mr Sciberras said.
"Since 2003, we deposited over Lm8 million in this way, representing a saving of Lm400,000 a year in damages, without prejudicing the rights of the property owner.
"We also transferred the money that was put into below-the-line accounts between 1993 and 2003. So, since 1993, 99.5 per cent of expropriations have been sorted out. Over Lm28 million have been paid in the last eight years.
"It is interesting to note that some Lm6.5 million have not yet been claimed! In the past, it was not worth your while to claim until you needed the money because you would be updating the value and accumulating damages. That is no longer the case. We would urge the owners to come forward now especially as the value of the property has been capped to 2005 values."
That still leaves pre-1993 cases, however, and there is no way to know how many individuals are affected because one parcel of land could have multiple owners. Mr Sciberras said it probably runs into thousands, "not too many thousands, though".
But the reality is that a majority of the cases relate to property expropriated from the Church prior to the Church-state agreement. Discussions are currently underway to seek a one-off solution for these.
"We would solve a large chunk of the pending cases in one fell swoop," he said with obvious relief. Another batch of problems has its origins in the departments that needed the land in the first place.
"Since the department did not have to pay for it, it could afford to ask for more than it needed. Say you needed land for a 15m wide piece of road, you would play safe and expropriate a 35m stretch. If the department confirms that it does not need the extra land, we can give it back. This is what happened in the past: We would receive copies of the project 'as built' which we could then compare to the original request. The problem is that this no longer happens.
"There are also cases where part of a property is used without any expropriation order. Obviously when the owner comes in with a claim, we have no records. You can imagine how long it takes to sort out something like this," he said.
Working out what is due to who is only part of the problem. The real challenge is to find the money for it. In the last budget, the government proposed a bond issue. The Finance Ministry is currently working out the mechanism.
"This is a brilliant idea that we had floated some years ago. The basic idea is to have a basket of properties worth Lm20 million, against which shares or bonds will be issued. So the person would be compensated with these shares or bonds, which they can then keep or sell on the Stock Exchange.
"From our side, we are working to establish which properties could be used in this basket. There are four or five architects in private practice who advise us on the value of property but I will need a lot more resources to do this groundwork," he warned.