Formalizing informality : the praedial registration system in Peru

Abstract

The Praedial Property Registration system has been presented as an alternative system to traditional registries for the formalization of immovable property. Much of the earlier design and pilot work for the Praedial Property Registration system was done by the Peruvian private organization, Instituto Libertad y Democracia (ILD). They claim that in Peru they "have formalized over 150,000 properties much more quickly, and at dramatically less costs, than traditional titling and registration programs" in three-and-a-half years during the early 1990s. This property formalization system has been trademarked as PROFORM. It is being offered to other countries as a quick and inexpensive way to convert informal property in the hands of a large proportion of the population into legally recognized private property, and as a source of capital for the grassroots development of these countries. This study assesses the functioning of this system in Peru and its replicability in other countries. There is no easily accessible documentation on how this property formalization program has actually functioned in Peru, and it is therefore difficult for development agencies to determine its applicability elsewhere. This assessment of the Registro Predial in Peru is an attempt to document the functioning of an important component of this formalization program. The study examines different aspects of property formalization and related institutions and processes. The scope of this assessment, therefore, includes not only the Registro Predial registration system, but also the titling process (prior to registration) and the credit worthiness and credit opportunities for titled and registered property in both urban and rural areas in Lima that fall under the jurisdiction of the Registro Predial. The study also examines the concepts and legal framework of titling, registration, ownership rights, and possession rights within the Peruvian context.