Speculative land trading requires a chain approach

A chain approach in which stakeholders take joint action is desirable to combat deception in speculative land trading. This emerged during the roundtable discussion organized by the House of Representatives on June 14th on this topic. The Royal Dutch Association of Real Estate Agents (KNB) also supports a joint approach.

For this roundtable, various parties, including the Royal Dutch Bank (KNB), were able to submit a position paper outlining their ideas. Several Members of Parliament asked KNB chair Annerie Ploumen, who presented the position paper, about the role of the civil-law notary. They argued that they don't always adequately educate buyers and protect them from being misled. "Couldn't civil-law notaries refuse their services much more often?" several Members of Parliament asked. Ploumen explained that this isn't always possible, as buyers sometimes want to proceed with the transfer regardless. She proposed introducing a so-called "three-step rocket" to protect consumers from speculative land trading. The proposal provides for oversight by the Netherlands Authority for the Financial Markets (AFM) on these types of transactions, the mandatory requirement of a notarial purchase agreement, and thus the timely and proactive prevention of consumer deception.

Measuring
Many questions also arose about the plots of land that buyers acquire. They often don't know exactly which piece of land they've purchased. Plots are drawn on a provisional map and haven't yet been surveyed by the Land Registry. The Land Registry will only do so once the land is developed into building land. Furthermore, the large number of owners resulting from fragmented sales complicates the process. This makes the plots unattractive to municipalities or project developers for housing development. Municipalities can counter this by more frequently invoking the Preferential Rights Act, although that law must first be amended.

BFT Supervision
The Financial Supervision Office (BFT) is conducting its own investigation into these types of land transactions, director De Groot reported. This is to determine exactly what's happening and whether it warrants further investigation into the role of the civil-law notaries involved. The BFT expects to complete its investigation after the summer.

Chamber debate with De Jonge
What the Members of Parliament will do with this information after this hearing remains to be determined. They may enter into a debate with the responsible Minister of the Interior and Kingdom Relations, De Jonge, who is also responsible for spatial planning and housing. This debate is not expected to be on the agenda until the autumn.