1:29pm , Tuesday 19th January 2021

Employees Wasting Millions of Dinars by Hindering Procedures and Manipulating Financial Needs Estimates

23 February 2011

Engineer Ghaleb Al-Ja’afari entered the offices of the Lands and Survey Department of West Amman on the morning of March 12, 2009 hoping to complete a procedure for buying an investment land plot within an hour, according to the Department’s promises and its declared rules and regulations. He was met, however, with complicated procedures and illogical estimates for purposes of estimating charges, which made him decide, in the end, to drop the idea of buying the land.

“They were complications that could have been avoided, but they wanted to exploit me by coordinating, indirectly, with brokers affiliated with certain people inside the Department”, says Al-Ja’afari, who is an investor in the residential buildings sector.

Many traders know the lines of the game, according to Al-Ja’afari: They pay brokers disguised as registered offices who have direct connections with employees who estimate the value of the property at a minimum, and rapidly complete the procedure at the expense of the treasury and all people dealing with the Land Department.

The mechanism of delaying people’s interests lies in the fact that the estimators delay the date for inspecting the land for a period of two to three weeks, which leaves the potential buyer with two alternatives: Pay outside the law to get an early date or resort to an outside office approved by the Department to follow-up on the procedure within hours, according to Al-Ja’afari.

Al-Ja’afari connects between the owners of these offices and some employees on the basis of mutual interest.

When facing office owners and employees with this accusation, both denied that everybody is involved in corruption and bribery, but they admitted that a small group of people are involved, pointing out that the judiciary found many of them innocent after holding them for a long period of time. They attributed what is being practiced to unintentional mistakes, but not to corruption.

The procrastination and stalling, however, opens the doors for paying bribes. Al-Ja’afari believes that the amount paid by the buyer ranges between 100 and 200 Dinars, which makes a big difference for estimators, some of whom evaluate three to four properties a day; an amount which exceeds their monthly salary. (See the box on: The Mechanism for Cheating with Lands Department Procedures and Regulations).The Experience of Differences

Al-Ja’afari had bought two adjacent plots of land with similar specifications, but the estimates presented by the evaluators were very different, along the same lines as apartments, according to him. Al Ja’afari emphasizes that he did not pay any bribes, attributing that to his being a well-known investor and a member in an association, as well as being indirect contact with officials. Yet he asserts that he knows many people who paid for the services of completing their procedures, blaming the government for the dysfunction in the evaluation process and the delays on behalf of the employees to complete the procedures.

According to the mechanism employed in evaluating land, the customer requests the evaluation of the property in question. A date is specified for the inspection. The evaluator, who is a surveyor, refers the inspection to a registered evaluation office licensed by the Department. The office inspects the property against a fee of JD 40, and the customer returns to the Land Department under whose jurisdiction the land falls, so that the official evaluator authenticates the property evaluation.

Haggling, but … At this stage, haggling starts between land owners and the evaluators in an attempt to reach the lowest level of estimation. In case both parties agree, things may reach the level of altering the specifications of the property on paper, highlighting and exaggerating the negative aspects and ignoring the positive characteristics. In some cases, the very property described may be changed. If it is a residential apartment with four stone sides, it may be entered on the form as one with two stone sides, and its age is estimated according to its occupancy permit, and so on. In case the property is an empty plot, another area, which is not serviced or has rough topography, is photographed, indicating it is the land to be estimated. These are attributes that will reduce the value of the property, according to Abdullah Mahmoud.

In the event that the customer paid another price, the evaluator will advise him to object. The property is then re-evaluated to a lower value, and it would look like the employee was fair and the customer was at a loss.

Investigations Assert and Numbers Talk Khaled Obaidat, the official spokesman for the Lands and Surveying Department says that the Department discovered discrepancies amounting to 41 million Dinars (59 Million US Dollars) as waste, during the past year, in the form of sales deals to Jordanians and foreigners. The largest waste was caught in estimates for sales to foreigners, amounting to 40 Million Dinars (57 Million Dollars), despite the fact that foreigner deals amounted to 20% of total land sales in Jordan in that year.

Records of the Land Department revealed the volume of waste in 2008 as a number of deals rather than in Dollar amount. It was found that there was waste in evaluating 850 deals during that year, out of a total of 145,328 sales deals concluded.

Engineer Saqr Al-Ma’aytah, who was the acting director of the Land and Surveying Department, however, emphasizes that 1100 complaints were addressed since the beginning of the year, related to delays in completing selling procedures, and 424 objections to the amounts estimated for property and land.

Since the increase in prices at the beginning of 2005, estimates doubled. However, the Department did not reconsider the estimates downwards after the financial crisis and the recession that hit this sector for the past two years.

According to statistics issued by the Land Department, the volume of dealings in the property market in the Kingdom during the first nine months of the current year reached 31% compared with the first year of 2009.

The same report mentions that the volume of dealings during the current month reached 480 million Dinars; an increase of 56% over the same period in 2009.

Revenues of the Land and Surveying Department during the first nine months of the current year reached 177.272 Million Dinars, noting that the amount of exemptions during the year was 74.367 Million Dinars.

The Department’s revenues during the past month reached 14.899 Million Dinars, and the value of exemptions during last September reached 15.416 Million Dinars, of which 7.278 Million Dinars represented the value of exemptions on land, and 8.138 was the value of exemptions on apartments, at the rate of 53% of total exemptions.

Exemptions since the date of the Cabinet of Ministers’ decision on 20.5.2010 reducing fees on land and apartments, and its decision on 20.6.2010 making additional reductions to enhance the property market until now, reached 100.857 Million Dinars.

Total property sales to non-Jordanian investors during the first nine months of the current year reached 3136 cases, of which 1559 are for apartments and 1577 for land, with a total market price of 232.985 Million Dinars; an increase of 33% over the same period last year, of which 124.399 Million Dinars are for apartments and 53%, and 108.586 Million Dinars are for land, at the rate of 47%.

Evading Payment of Bribes Abdullah Mahmoud (45 years) is a citizen who was trying to evade payment of bribes to complete his registration process. He looked like someone going in circles in the street adjacent to the Land and Surveying Building in Jabal Weibdeh. He said: “There is a great deal of corruption in the evaluation process.” He gives an example. Suppose that Land B is worth 100,000 Dinars, compared to a similar land. What happens is that the authorized evaluator affiliated with the Department or the surveyors reduce the estimate to half that amount.

One of the methods followed by evaluators is to take photographs of parts of the land in question, but without showing structures or large public services, or they take an angle that is not typical of the land to be evaluated. Sometimes they even include pictures of a different land and the estimation is carried out on that basis.

Mr. Mahmoud says that the inspection in most cases takes place on paper only, and the licensed office’s report is approved. He adds: “The relationship between the owners of these offices and some employees is clear through their agreement to adopt the lowest level of estimate issued by the Land Department, in addition to the haggling that takes place between the citizen, the office and the employee to agree on a value for the estimate.

When the difference in the evaluation is, say, 5000 Dinars, the property owner considers this a gain and a saving, and believes that paying a bribe of 200 or 300 Dinars to the evaluator is easier on his pocket, according to Mr. Mahmoud, than paying the full 5000 Dinars.The biggest loser is the state treasury, and the citizen who refuses to enter the game of brokers.

According to the same citizen, there are brokers concealed under the designation of licensed offices for carrying out surveying and evaluation operations, and others who are not licensed, who introduce themselves as intermediaries between the citizens and the employees.

In the lower floors of one of Amman’s Land Departments, there are real-estate offices, or so they are labeled in large print, where the owners work in brokerage and completion of procedures. They are brokers to whom citizens resort as a normal procedure.

A Field Experience The writer of this report descended to these floors where the brokers operate. He told one of them that he wishes to initiate an evaluation process for a plot of land, and that he, most clearly, wishes to reduce the value of the estimate which may be imposed on the land, by virtue of the broker’s relationship with the evaluators. There was no hesitation on behalf of the broker, who answered: “Immediately.” But he added that his service carries a cost. He asked for an amount of 50 Dinars as a fee for the service.

What happens later on is that the surveyor inspects the property and estimates its value, and then asks the owner to complete the process at the Lands Department where the evaluators, who are employees of the Department, approve his estimate. Reduction rates appear actually very clearly on the documents. The value estimated may go down to one half in land, and even lower in apartments because of the description by the buyer and seller.

Sometimes, evaluators draw the attention of the buyer to his right of objection, so he can obtain an additional reduction in the estimate. The buyer then submits an application and the estimation is repeated, against another payment that could reach 50 Dinars, and so on.

Following an Estimation Process

We accompanied one of the estimation processes for a building in one of Amman’s upscale neighborhoods for a citizen we shall call Wafa’ Mohammad; a fictitious name, upon her request. The process started when she obtained a purchase order, and a special evaluator who is approved by the Department was assigned. The evaluator inspected the apartment from the outside, and estimated its price at 65,000 Dinars, of which the treasury’s share is 6,500 Dinars. But after the land broker interfered with the evaluator, the reductions went on consecutively to reach 54,000, then 50,000. After the buyer objected, upon the instructions of the employee, the estimation was once again reduced and the first picture was destroyed, with the estimate reduced to 45,000 Dinars.

This process took place after the buyer paid between 30 and 60 Dinars, and finally 15 Dinars, on the side. All these amounts go to the licensed office at the Department, after give and take between the buyer and the Department estimator who approves the final evaluation, and the approved office, as Wafa’ asserts.

Abdel Mahdi Fadhel, who is 35 years old, has another story.

“I went to the Zarqa Land Registration Directorate to obtain a registration certificate in the name of my brothers, as heirs to my father’s land. According to ownership transfer procedures, the land is supposed to be evaluated as a farm with an area of 151 dunums. The evaluator asked me to come back after ten days for inspecting the farm and estimating its value.” Fadhel stressed that he promised the evaluator to ‘honor’ him if the procedure was completed in a shorter time.

With a smile of content, the evaluator looked at the papers and then at Fadhel, saying with confidence: “The procedure will be completed by tomorrow.” On the next day, they both went in the evaluator’s private car, and before the inspection, they had lunch in a restaurant. “At the restaurant, I slipped 10 Dinars into his pocket, and said that this is for a cup of coffee.” After that, the evaluator told Fadhel that he can now go to the Department and get his title deed. Within one hour, the document was in Fadhel’s hand.

Temperament and a Phone Call In a dramatic scene, a wealthy man called complaining to the Director of the Land and Surveying Department about the temperamental treatment he received from one of the Department’s female employees. He had sought to record a plot of land in his daughter’s name after buying it for 1.27 million Dinars. But the man’s driver, who followed up on the recordation procedures met with a series of difficulties and obstructions that prevented the completion of the process. The female employee told him: “I will never prepare the document regardless of what you do.” The interlocution ended after the wealthy man interfered with one of the officials at the Department. This incident was interpreted by the driver as procrastination with the intent of obtaining a bribe.

Acknowledgement, but… Samer Zhaimat, Director of Evaluations acknowledges that there are violations connected to the process of evaluating properties every now and then. He talks about the difficulties of controlling methods of cheating. Even if caught, it will take a long time before the perpetrators are convicted, despite everybody’s conviction that there is a rampant problem that needs to be solved, according to him.

Zhaimat describes his department as the filter for land registration and documentation directorates. All estimates are audited and reviewed here, and this is done through meetings between the private sector and the Department employees in all directorates in order to agree on the base price in each basin. Zhaimat expects that the ratio of mistakes does not exceed 15% in estimation between the base price and the agreement between the two sectors for each basin.

Officials at the Land Department, however, see that most violations and differences in evaluating property and land is among private evaluators the Department contracts in Amman exclusively since 2007 to meet the exceptional expansion in the real estate market and to ease the pressure on its evaluation staff, whereby the number of evaluators is 23 in various Department directorates; a small number compared with the total number of employees at the Department, which reaches 1693 employees.

According to an internal official study carried out in June 15, 2010, the Department renewed contracts with 194 private evaluators this year, out of 369, in addition to licensing 231 offices and dozens of unlicensed offices.

The corruption resulting from evaluators is under control, according to Zhaimat, because of our perception as officials that the wrongdoer does not intend to do wrong. We return the case to the Director of Registration concerned in order to change the evaluation.

Mistakes committed by the evaluator range between failing to physically inspect the property, with the excuse of too much work pressure, and the large number of cases, or that he has prior knowledge of the property, yet is unaware of any changes to it that took place, in addition to his exposure to official pressures, peer pressure, relative interference or broker persistence to complete the case.

Zhaimat attributes evaluation violations to brokers who are illegally present at the Land Registration offices without any monitoring or control.

Yet he insists that the employee would not dare to ask for a bribe, believing that what actually happens is an insinuation for one, from the client or through brokers. He adds: Humans are weak, and the result is that the person who is bribed is not the employee but the buyer. Instead of paying a bribe to the employee, the citizen should file a complaint against late appointments, increase in the evaluation or the lack of physical inspection.

Zhaimat says: I heard people brag that they bribed the employee to expedite the process, and at a lower cost. But after years, their cases where audited, and they were required to pay the difference in fees. He further emphasizes that the Department revealed a shortfall in fees that cost the treasury tens of thousands of Dinars, some of which go back to the seventies and eighties of the last century.Official Encouragement The Cabinet of Ministers decided to exempt citizens from paying previous fees that are less than JD 1000, and 50% of fees that exceed this amount. This happened after the Department discovered waste amounting to millions of Dinars over the past years, resulting from violations in evaluating land, he adds.

In order to reduce manipulation, the Department took a series of measures, including finalizing the case and auditing it within a maximum period of one week to estimate the revenues from sales by Jordanians. As for non-Jordanians, the Department decided to refer the estimation of their sales to the Department of Value Estimation directly, rather than through Department offices in governorates.

Zhaimat called upon the government to institutionalize the real estate sector and save it from the mutilation stage into a stage of laws, with controls over the work of brokers and those working in the real-estate sector. Among the solutions is attaching control over evaluators, brokers and employees in the real estate sector to security systems and combating corruption directly.

Zhaimat sees that the social system is behind overlooking the corrupt group that is discovered, without punishing perpetrators with the appropriate punishment.

The Department of Estimating Values does not have any statistics on the number of evaluators involved in corruption cases and abuse of position, according to Zhaimat, and therefore, dealing with employee mistakes does not take place properly. Hence, he calls for punishing violators through the civil service system, which escalates penalties from drawing attention to warning to transfer to a different location, or deductions from salaries or recommendation to transfer the perpetrator to an investigation committee. Most penalties implemented, however, are not deterrent because of the tribal system (…) and the interferences to prevent imposing penalties.

Financial Support of the Employees Zhaimat calls for increasing employees’ salaries (are there any financial incentives?) and the formation of a supporting incentive system, as well as a higher committee to inspect evaluation decisions in a scientific manner.

What adds to the already deteriorated situation is that the Land Department does not have the legal or technical ability to pursue employees under suspicion after office hours by entrapping them.

Security systems and the Corruption Combating Department caught employees from the Department of Land who used surveying systems belonging to the Department and carried out selling and evaluation activities through brokers or unlicensed real estate offices. They were caught outside office hours, according to the Director of the Values estimation Department.

Private Sector Haitham Al-Fukaha, Director of the Studies and Surveys Department at the Land Department believes that the experience of private evaluators aimed at involving the private sector in the Department operations. He added that the Department is studying restricting the positive and negative sides in each basin, and then generalizing them to directorates for the purpose of treating wrong estimates through an automated plan that carries the standardized administrative price for the basin, that takes into consideration new developments in real estate every six months.

Al-Fukaha asserts that evaluating a square meter by the Department of Land is less by 25% than the market price, and that the error in evaluation by employees does not exceed 10-20%.

But what about penalties? The official Department of Land and Surveying spokesman, Khaled Obaidat says that the exacerbation of the problem at the Department deprives the treasury of a great deal of money.

This is what prompted the Prime Minister, Sameer Al-Rifa’i to inspect the flow of work in the Department section twice, once on December 30 2009 and the other on 29 March, 2010.

Obaidat agrees with the Director of the Value estimation Department that the decision of the Cabinet of Ministers requiring exempting violators from half the fees due previously came as part of the solution to the problem.

At the Archives In 1984, the Prime Minister at the time, Ahmad Obaidat visited the Land Registration Office in Mafraq. After witnessing the volume of corruption there, he ordered that all employees be carried in internal security cars to Amman and referring them to the public prosecutor, according to the spokesman. (Refer to the archives or whoever was responsible to write about the number of those apprehended or indicted).When the citizen / seller indicates his readiness to pay a bribe to employees against receiving a service that is his right anyway, he contributes to enhancing this phenomenon, complains Obaidat, adding that it is more effective for him to submit complaints to officials to mitigate the problem.

This text was issued within the framework of talking about the mechanism for complains and objections: It referred to the fact that the right for re-evaluation is among the authorities of the General Director and the Registration Director in various directorates, in case they noticed injustice in the evaluation process. The Department spokesman knows that some employees may use this right to reduce the evaluation value, after requesting the applicant to object.

A Convoluted Equation Revenues of the Land and Surveying Department amounted to 355 million Dinars in 2007 and 373 million Dinars in 2008, In 2009, they amounted to 270 million Dinars despite the increase in the volume of dealings and transactions registered at the Department.

Nidal Al-Saqrat, General Director of the Land and Surveying Department says that the Department submitted to the Legislation and Opinion Bureau a standard draft law that will be implemented over three stages, by which 19 laws and 11 regulations, as well as a number of current administrative and technical instructions implemented at the Land Department at present will be merged.

The joint draft law includes assigning the ratio of grants allocated for employees as a percentage of revenues attained, as a step to combat corruption phenomena taking place in the Department.

Cases will be referred to the General Prosecutor after investigating them internally. Cases of fraud and embezzlement come in the first level, followed by bribery and abusing authority in matters of evaluation.

Khaled Khamis Al-Umoush, Surveying Director at the Land Department emphasizes, from his side, the need of the Department to reconsider the overall evaluation and violations system, drawing attention to the fact that he presented a draft electronic special system for evaluation instead of the system followed now to avoid falling in a human error.

He stressed that the Land Department is presently evaluating the private evaluators experience before a planning and coordination committee named the Virtual Green Track. Penalties imposed on private evaluators who violate the law to prohibition from practicing the profession and cancelling their estimates.

According to a statistic about the Department, penalties were passed against three evaluators from the private sector, and one suspension for six months against one evaluator from the private sector also. In return, three letters of gratitude were addressed to evaluators from the private sector during 2009.

Electronic Estimates He explained that the estimation process will be electronic in future, and will depend on a base price that sets a standard price for each basin. Positive and negative features will be added for real estate, assuring that nobody can manipulate the system.

He further revealed that the Department is working at issuing the Evaluator’s Electronic Card for the purpose of setting all evaluations electronically by the evaluators in the Kingdom, and to review them monthly by a special committee named the Electronic Evaluator’s Committee, to prevent manipulation in evaluations and to combat corruption in this area.

All evaluations of land in the Kingdom were reviewed, and the reduction percentage for previous years when the economic boom took place reached 5% in the capital Amman, and 20% in other governorates.

The Ministry of Finance Promises The Minister of Finance, Dr. Mohammad Abu Hammour pledged to review the land and residence evaluation procedures to reflect their real market value. What led the Minister to make this promise is complaints from citizens of the high level of evaluation by the Department of land and Surveying of their land at a rate between 20 and 30%.

This report was completed with the support of Arab Reporters for Investigative Journalism (ARIJ) and under the supervision of Sa’ad Hattar.


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