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In 1992, the United States Agency for International Development (USAID) approached the National Association of Realtors® to assist in developing a system for the orderly transfer of real estate in the countries that comprised the former Soviet Union. As a result, NAR created the Eastern European Real Property Foundation (EERPF), to facilitate development of an organized real estate industry in those countries. When communist governments fell in Central and Eastern Europe, and the USSR disintegrated, property came into private hands. But then, property owners had to learn how to sell their real estate. The main function of EERPF was to set up associations so they could form a system that could become self-sufficient. The Foundation hired their first association executives and held their first association executives planning session in Prague in 1994. With participation and assistance from U.S. Realtor associations, executive officers and volunteer leadership discussed marketing, educational programs, lobbying techniques, public relations and ethics. The participating associations then created an organization called CEREAN, the Central European Real Estate Associations Network. In October 1999, they held their fifth annual conference in Bratislava, the capital of the Slovak Republic. I had the privilege to attend and learn a great deal about the challenges the Central European countries have in attracting foreign investment, trying to change long-standing traditions, and trying to develop cooperation among government authorities, buyers, sellers and lenders. Representatives from these countries are keenly interested in how we do things in America. They have had no such thing as master planning or title insurance. This makes it difficult to attract developers and foreign investors. They, of course, want to know about the future development around a proposed project. This includes the transportation systems and other support services and amenities that may be available to occupants of a completed project. The lack of title insurance in many countries is of grave concern, obviously because investors from Western countries are accustomed to insured titles. Other major concerns deal with the uncertainty of the attitudes of changing governments toward foreign investors, and the instability of the currencies in these countries. One real estate developer in Bratislava told us that the only way they can obtain financing is to write a mortgage with a payment schedule based on German deutsche marks as opposed to Slovak crowns (koruna). After attending the CEREAN conference, my travels took me to Austria, the Czech Republic, Poland and back to Slovakia. I traveled these countries extensively and found all to be quite similar except for Austria. Austria is a far more developed country with a more modern Western-like culture and business climate. Being members of the European Community, Austrian trade, commerce and real estate investment and development are easier to accomplish than in the Eastern and Central European countries. However, there are clear signs of change in the Eastern and Central European countries. In these countries, where English was virtually banned until the Velvet Revolution of 1989, people who speak English can be found in most populated areas and business establishments. Signage is excellent, so getting around is not difficult. Many directions are in English and, of course, all the technical words that evolved in our country over the last decade are prevalent and identical, or nearly identical, in these countries. Finally, the people are very friendly and accommodating. They are quite curious about how we do things in this country, consider us successful, and are anxious to learn from us. The next CEREAN conference will be held in October 2000 in Prague. For more information contact Jarmila Knight at CEREAN@iol.cz. |
