The possibility of a common european land registry within the current legal framework

Author:Gabriel-Bogdan Chihai
Position:Ph.D. Student. Titu Maiorescu Univerisity
Pages:39-45
SUMMARY

The purpose of this paper is to explore the possibility of implementing a common European Land Registry from a legal point of view. Although the European Union has yet to succeed in implementing a sole land registry, it has made clear and certain steps in this direction. Through platforms like EULIS or common vision agreements signed with associations like ELRA, the European Union is working towards the standardization of the way in which its member states handle real estate registration. In order to fully understand the legal implications of, and how achievable a standard European Land Registry is, it was deemed necessary to make an analysis based upon the comparison between the different legal systems found in the European Union, with focus upon the concept of property transmission. This comparison was chosen because, on the aforementioned principles, all EU member countries have developed their own legal instruments and institutions with the sole aim of supervising real estate registration. By focusing on the points of the land registration process, which involve principles of law, like property transmission, good faith protection or, third party effects, and the differences between them in different EU countries, this research has concluded that, despite the steps in the right direction, the implementation of a common European Land Registry at least from a legal point of view, is not yet a viable option.

 
CONTENT
The possibility of a common European land… 39
THE POSSIBILITY OF A COMMON EUROPEAN LAND
REGISTRY WITHIN THE CURRENT LEGAL FRAMEWORK*
Gabriel-Bogdan CHIHAI**
Abstract: The purpose of this paper is to explore the possibility of implementing a common
European Land Registry from a legal point of view. Although the European Union has yet to succeed
in implementing a sole land registry, it has made clear and certain steps in this direction. Through
platforms like EULIS or common vision agreements signed with associations like ELRA, the
European Union is working towards the standardization of the way in which its member states
handle real estate registration. In order to fully understand the legal implications of, and how
achievable a standard European Land Registry is, it was deemed necessary to make an analysis based
upon the comparison between the different legal systems found in the European Union, with focus
upon the concept of property transmission. This comparison was chosen because, on the
aforementioned principles, all EU member countries have developed their own legal instruments and
institutions with the sole aim of supervising real estate registration. By focusing on the points of the
land registration process, which involve principles of law, like property transmission, good faith
protection or, third party effects, and the differences between them in different EU countries, this
research has concluded that, despite the steps in the right direction, the implementation of a common
European Land Registry at least from a legal point of view, is not yet a viable option.
Key words: Private Law, European Union Law, Land Registry, European Regulatory
Framework, Property rights, Property registration
Introduction
As the process of globalisation continues to make its effects more and more
obvious, the affected economies and legal systems need reliable instruments for the
classification, clarification and application of legal concepts and provisions that
ensure the security and transparency of the present and future legal relations. In
order to fulfil this necessity, the use of registers has been implemented and
encouraged, in order to provide a good overview of the different facets of a
particular situation. Registers create rights and obligations, have third-party effects
* The article was prepared for the International Law Conference, "Current Issues within EU and
EU Member States: Converging and Diverging Legal Trends", 3rd edition, organized by the Faculty of
Law – Transilvania University of Braşov on the 29th-30th of November 2019. All links were last
accessed on 24 October 2019.
** Ph.D. Student. –Titu Maiorescu Univerisity, chihai.bogdan@gmail.com.
Law Review special issue, Decembre 2019, pp. 39-45
40 GABRIEL-BOGDAN CHIHAI
and organise the transfer of legal rights, which makes it particularly important in
the economy market. This is confirmed by the tendency to update and modify the
forms of registers with the evolution of the free economy market (like the
European Union). Real estate is a very important part of the global economy since
it allows not only for the personal development of the individual but also for the
development of business, or state affairs (for example infrastructure). This is the
main reason why the registry plays a central role in the real estate world. With the
implementation through legal provisions, such registers offer a clear view over the
legal situation of a certain piece of real estate.
Lawmakers in Europe have adopted and developed such registers under
different forms, that were particular to their needs at the moment of
implementation (examples: “Cartea funciar” in Romania, “Grundbuch” in
Germany, Austria). They are designed to reflect the information needed to
determine the property rights, the rights of disposal, limitations of ownership, the
legal relations between multiple owners of a certain piece of real estate. The
German Federal Court considers the Land registry as being “the mirror of all
private material rights on real estate1”.
With the European Union specific principles of freedom of trade and
movement of member states citizens, the increase in real estate transactions and the
way they are handled demanded an updated registry, in order to have a clear
image upon the legal attributes of the property, and thus eliminating the barriers
which may appear against the aforementioned principles2. This research focuses on
the comparison of different Land registry systems (Romania, Germany, Austria)
from a legal point of view while taking into consideration the different steps made
by the analysed systems in order to harmonise the legal provisions, bringing the
real estate property law to a common, European form. Although the solutions
proposed by the European Union (like the EuroMortgage, Euro-Title System, or
EULIS - European Union Land Information Service) may represent steps in the right
direction for a unified European Land Registry System, the member states had yet
been able to fully implement such measures, mainly because of the way in which
they traditionally handle property law.
1. Section – Current European Framework
Private property is a central point for the European integration and the
wellbeing of the European market economy. Thus, in order to ensure a standard
practice, security and stability in this domain across the European Union member
states, property law is subject to the efforts of standardisation. But, at this point,
1 Kuntze , J., Ertl, R., Herrmann, H., & Eickmann, D. (1974). Grundbuchrecht. Berlin: Walter de
Gruyter, p. 74.
2 F. Baur & R. Stürner. Sachenrecht. München: C.H. Beck, 2009, p.151-154
The possibility of a common European land… 41
due to the different systems of property registration found in the European Union,
the standardisation process and its effects are still questionable. The
Europeanisation of the land registers would bring great difficulties at the
individual state level, especially because of the different levels of registration in
different countries. For example, in Romania only 35,8% of the total estimated
properties are registered in the Land Registry3. Such discrepancies may cause
problems in a unified land registry system. Furthermore, in some cases, it would
be more beneficial for member states to increase the quality and integrity of their
own land registries instead of focusing on creating a favourable framework for a
standard European land registry. Another relevant example in this case is that,
since 2001, Austria is working on improving its Land registry system, more
specifically, by increasing the information available in an electronic format4, while
in Romania there are still more than half of the estimated properties that are not
yet registered in the land registry5.
Although the European Union, as an entity, has refrained from ruling directly
upon the subject of the European Land registry, it has instead acknowledged the
necessity and efforts of organisations like ELRA (The European Land Registry
Association). ELRA is constituted as a non-profit organisation with a mission and
primary purpose that can be described as “the development and understanding of the
role of land registration in real property and capital markets.6This association was
recognised by the European Commission and the European Parliament as the
association representing land registries in the European Union, being “fully
committed on working on behalf of Land Registries and in cooperating with the European
Union Institutions7”. Thus, ELRA is creating a favourable framework for the
cooperation of different land registry systems in the European context by
acknowledging the fact that Land registries are a fundamental instrument for the
basic exercise of community freedoms, such as free movement of capital and
people, even though the traditional laws governing the individual member states
Land registration systems are usually intertwined with the real estate rights and
property laws. ELRA has 33 organizations representing the Land Registries of 26
European countries and is still growing. Of the countries selected for this research
only Romania and Austria are represented within ELRA.
3 ANCPI. Agenia Naional de Cadastru şi Publicitate Imobiliar, available on: http://www.ancpi.ro.
4 J. Ernst, R. Mansberger, G. Muggenhuber, C. Twaroch, & R. Weesely, O
sterreichische Beitra
ge
zum Kataster im internationalen Umfeld. 200 Jahre Kataster O
sterreichisches Kulturgut 1817 - 2017, Wien:
Bundesamt für Eich- und Vermessungswesen, 2017, p. 283-294.
5 ANCPI,. Agenia Naional de Cadastru şi Publicitate Imobiliar, available on http://www.ancpi.ro.
6 Ibidem.
7 Ibidem.
42 GABRIEL-BOGDAN CHIHAI
2. Section – Case Study
2.1. Subsection – Romania
In Romania the land registration process has become of utmost importance,
creating the necessary security in ensuring the guarantee of property rights, while
also maintaining the framework necessary for the transfer of these rights from the
moment they are created, to their extinction8. The Land Registry serves the same
purpose as in most other countries, mainly to respect the principles of the law
regarding the publicity of real estate. From a historical perspective, Romania had
five different Land registration Systems, each one specific to a certain region. In
2009, the new Romanian Civil Code regulated land registration through land
registers9.
The new provisions regulate Land Registries as a part of land registration
process through which a registration may translate or constitute real rights10. The
new Civil Code introduces aspects which better define both the purpose and the
object of the new land registries especially regarding: the definition of tabular
rights, types of registration, the publicity of the land registry, operations with real
rights regarding real estate, the conditions in which new registrations are made,
the dates from which new registrations come into force and produce effects against
third parties, conflicts between third parties regarding the same property,
provisions regarding deeds and legal relations11. It is important to note the fact that
the provisions of the new Romanian Civil Code come produces effects only on
deeds and registrations after the 1st of October 2011, when it came into force.
Complementary to the provisions found in the new Romanian Civil Code are the
provisions of Law 7/1996 (Republished in 2013) - Regarding the cadastre and real
estate publicity, which regulates the general conditions of land registration, the land
registration activity and procedures, and the organisation of the cadastre.
The Romanian Civil Code offers free access to the land registry, and therefore
it presumes the knowledge of its contents12. Interested parties may obtain any
information regarding the rights over a certain property, including copies of
documents that were the base of the registration.
The challenges that Romania faced in creating and enforcing a unitary Land
Registry system are reflected in the statistics mentioned which reflects a poor
performance in the process of registering all the properties in the Land Registry.
Keeping this in mind, it is important to note that creating a Standard European
8 P. Petru, Probleme de Drept Civil şi Procesual din Practica Seciei Civile şi de Proprietate Intelectual a
Înaltei Curi de Casaie şi Justiie. Dreptul 12/2005, p.261-262.
9 Law no. 287 from 17 July 2009 regarding the Civil Code, republished in the Official Journal of
Romania, Part I, no. 505 from 15th of July 2011 – Title VII.
10 I. Sferidan, Drept Civil. Drepturi Reale Principale. Bucureşti: Hamangiu, 2013, Pag.301.
11 Civil code, art. 876 – 906.
12 Idem, art. 883.
The possibility of a common European land… 43
Land Registry would have to face the difficulties and down sides of bringing
together more than five different land registration systems, and, although the
technical problems could be considered resolved (most countries already base their
systems on the cadastre), the legal provisions in effect, may create conflictual
situations, especially regarding the their enforceability against third parties.
2.2. Subsection – Austria
Austria is a country with rich tradition regarding the Land Registry
(Grundbuch) the bases of which can be traced back to the Habsburg Monarchy.
The General Civil Code from 1812 (ABGB), was contained the first legal provisions
that instituted generally applicable norms in the field of property rights, and the
principle of land registering through which real rights were only deemed after the
registration in the Land Registry, and also the principle of trust, through which
interested third parties may trust the veridicity of the information contained in the
Land Registry.13 Since then, it has suffered several small changes especially
regarding its applicability, and the way in which the entries in the land registries
are held. The first major change was made through the Law from 17.11.1980 which
introduced the process of changing the way the Land Registries are held,
introducing the “Automation assisted data processing for the Land Registry” or
ADV-Grundbuch14. This was the technical base which led to today’s version of the
Austrian Land Registry, which is not a registry in the common sense of the word,
but a complex computer assisted information system. Despite this fact, it still
retains the structure of the old registries15.
In Austria, the Land Registry is an instrument that creates, modifies, transfers
or revokes property rights. This transfer is done using a valid document to
produce the legal effects, but it does not come into effect until it is fully registered
in the Land Registry. The principle of rank (prior tempore potiur iure) is also taken
into consideration. The Land registry also benefits of the publicity principle,
through which any interested party can obtain information about a given property
and the source of the rights that are in effect upon that property without having to
prove the legitimacy of the interest. The Law that governs the Land registry also
gives it the benefit trust, guaranteeing its accuracy in the eyes of the citizens.
Although Austrian Land Registry is regulated through a dedicated law, the rights
upon which it has effects are regulated by the Austrian Civil Code.
13 W. Brauneder, Österreichs Allgemeines Bürgerliches Gesetzbuch. Eine europäische
Privatsrechtkodifikation I. Wien: Hofmeister, 2014, p.219-225.
14 Bundesgesetz von 27.11.1980 über die Umstellung des Grundbuchs auf automationsuntertützte
Datenverarbeitung und die Änderung des Grundbuchgestzes und des Gerichtskommissärsgesetzes, Official
Journal of Austria nr.550/1980
15 W. Rechberger & L. Bittner, Grundbuchsrecht - 2. überarbeitete Auflage. Wien: Fakultas, 2007,
p.471-484.
44 GABRIEL-BOGDAN CHIHAI
As mentioned in Section 1, Austria is currently working on increasing the
information available in its electronic Land registry, more specifically by including
3D technical data in the cadaster. As a result of the fact that Austria is continuously
looking to expand its data in the land registry, and considering the fact that it is
already in an electronic format, it would be easier to face the challenges imposed
by the implementation of a common European Land Registry.
2.3. Subsection – Germany
After the creation of the German Reich, and the new earned independence, the
two Laws that govern the focus points of this research were created as follows: the
German Civil Code (Bürgerliches Gesetzbuch)16 which regulated property rights,
and the German Land Registry Law (Grundbuchordnung)17 which regulated upon
the procedural aspects of the Land Registers and property rights. The
aforementioned legislative acts came into force on the 1st of January 1900, and have
since suffered heavy modifications, in order to keep them in accordance with the
times. Till the year 1935 the German Land Registry Law contained general
guidance upon the way the Land registry should be kept and how the operations
should be registered, the rest being left for the federal states to decide. This was
changed in 1935 when all federal states have been forced to use the same
provisions upon the operations in the Land Registry18.
Through the reform the German Land Registry Law, decided upon
implementing a similar system to the one (at the time) already in use in Austria.
The principles that were in effect were almost the same: the rights of property
could be created, modified, transferred or revoked, based upon the deed (or the
appropriate document), but only came into effect after it has been registered in the
Land Registry. The principle of rank applies similar to how it is applied in Austria.
Notable differences can be found regarding the way the information is organized
in the land registry, and the fact that it also contains more data regarding the
sources of property rights upon that entry in the registry. Although since 1993 the
German Land Registry is also in an electronic format, its publicity is somewhat
limited by the fact that any third party interested in the information presented in
the Land Registry must prove a legitimate interest in the solicited information in
order to get access to it19. This limits the publicity of the Land registry to those that
benefit from the property right, or any other part that has a legitimate financial
16 Bürgerliches Gesetzbuch in the form of publication from 2. Januar 2002 (BGBl. I S. 42, 2909; 2003 I
S. 738), with article 7 which was modified on 31. January 2019 (BGBl. I S. 54).
17 Grundbuchordnung in the form of publication from 26. Mai 1994 (BGBl. I S. 1114), with Article
11, Paragraph 18 which was modified on 18. Juli 2017 (BGBl. I S. 2745).
18 M. Bengel, D. Richter, R. Bauer, & D. Weidlich, Grundbuch, Grundstück, Grenze - Handbuch zur
Grundbuchordnung unter Berücksichtigung katasterrechtlicher Fragen. Berlin: Hermann Luchterhand
Verlag, 2000, p.115-127
19 Grundbuchordnung (BGBl. I S. 1114) - § 12, Abs.1.
The possibility of a common European land… 45
interest (potential buyers, banks that offer credits, etc.). The Land Registries are
although accessible, without the need to prove the legitimacy of the request, by
public servants that are in the exercise of their authority, public notaries and
mandated lawyers, also benefiting from the presumption that they are in the
rightful exercise of their profession.
Germany has a well developed Land Registry system that guarantees the
applicability of the principles on which it is based. Furthermore, the high level of
details included in the Land Registry and the fact that it is in a fully digital format,
could make the integration in a common European Land Registry an easy task.
But, in this particular case, despite the developments that Germany made to its
Land Registry system, the limitations applied to the the principles that govern
property law, would cause great compatibility issues in case of implementing the
common European Land Registry. Also, it is worth noting that Germany, is not
represented in the European Land Registry Association.
Conclusions
The analysed Land Registry Systems have more or less similar methods, to
ultimately fulfill the same common function. The procedural principals that stay
behind the given systems, when viewed from a perspective, complete each other,
and only produce legal effects with one common condition: the registration of the
operation regarding the property rights in the Land Registry. Although the
presented forms are different up to a point, the common principles and the
common normative base may already be there for the implementation of the
Common European Land registry. But, this is a lengthy process, in which the
national dogmatical differences need to be put aside, and solutions of compromise
need to be made, in order to create the proper “legal atmosphere” necessary for the
creation of the principles on which the Common European Land registry would be
based.
The importance of the implementation of the pan-European Land registry is
no doubt high, especially in reinforcing the freedoms on which the whole concept
of the European Union is built. But, although there are positive movements in
towards this direction, given the current legal framework, that is different from
state to state and the current challenges that the Union faces, it can be concluded
that the European Land Registry is not a viable option, at this moment, at least
from a legal point of view.