The paper is concerned with the findings of a study into institutional issues, i.e. legislative acts and organisational structure related to real property formation in Latvia. It examines various terms and concepts accordingly to the topic and their usage. The problem domains serve as background for estimation and modelling of different binding processes like land privatisation, real property transactions or real property formation. Both existing legislation that regulates and organisational structure that administrates the real property formation process are far and wide reflected and analysed by this contribution. In consequence of the analysis of Latvia's situation, the problem domain of real property formation that can be used for deeper exploration and modelling real property formation process and closely related others is offered. Finally, significance of the institutional arrangements is substantiated.