January 1, 2010 / Gerard Vandenhouwe
The European Land Registry Association (ELRA) asked the Belgian delegates –the “Royal Federation of Mortgage Conservators of Belgium” and “Patrimonial Documentation” (of the Finance Department)– to present the Belgian land registration system to the general assembly of its members.
After three preliminary remarks, we will describe briefly the present Land Registry in Belgium and endeavour to depict what the future land registration in Belgium might be.
2.1. The Land Registry and land registration
By way of a first preliminary to our presentation of the land registration system, it will be useful to explain what is meant by “Land Registry” and “land registration” (and to clarify the possible confusion between the two). The proprietary rights and charges concerning land are recorded in registers maintained by the Land Registry. But the Land Registry is only is but one actor in the process of land registration. To get the full picture of the Belgian land registration, one needs to look beyond the Land Registry, and consider the other actors involved in land registration.
A literal translation of the official name of the Belgian Land Registry is “Mortgage Conservation” (or “Mortgage Office”); but this name is not used because it reflects only a rather minor part of the functions of the institution: the “Mortgage Conservation” is much more than the registration of mortgages; it is the principal instrument of land registration. Hence, the use of the term “Land Registry”.
The Land Registry is an important actor in land registration, no doubt, but only one actor among others, nevertheless. The Land Registry operates indeed along and amidst other “land registration institutions”: the Cadastre, the Registration Office, and also, the notary, the banks, etc.
The reader is invited to bear in mind that land registration is more than what the Land Registry does.
2.2. Land registration without the legal context
The Land Registry and land registration are presented, detached from the legal context.
This is most unfortunate. Land registration is at the crossroads of land law and contract law. In Belgian law, for instance, land is transferred without conveyance, there is no need for a separate conveyance: a simple contract, even a verbal contract suffices to pass the ownership to the purchaser. If I ask “Do you want to buy my house in Koksijde at the price of € 300,000?” and your answer is “Yes, I do”, my house is yours. This may seem strange –even for a civil lawyer– but it is the legal reality in which the Land Registry operates. Needless to say that this has a tremendous impact on the way we register transfers (and creations) of property rights.
2.3. Struggle with terminology
This presentation is in English, the lingua franca of Europe. We will try to explain civil law concepts using English, which are –inevitably– common law words and expressions. We’re bound to fail: legal terms convey a precise meaning; it is not possible to detach the content of the word from the word and to replace it with another content. Traduttore, traditore: the legal translator is necessarily a traitor par excellence.
2.4. Mission impossible continued
It is clear that our mission to introduce you to the Belgian Land Registry and the land registration in Belgium is a rather impossible one. It is even rather dangerous to try to depict only some aspects of the Land Registry and the land registration: the picture is necessarily a deformation of the reality.
We continue nevertheless. Julius Caesar said –and he was right of course– that the Belgae were the bravest of all the Gauls. We like to think that we still are and in order not to damage our well earned reputation, we continue our presentation.
The more so, since we can refer to the website of the European University Institute (www.iue.it/LAW > European Private Law Forum > Projects) where the results of a recent survey of “Real Property Law and Procedure in the European Union” are made available.
By the way, it might be worthwhile to examine in more detail the land registration issues of this research conducted by the European Private Law Forum of the European University Institute and the Deutsches Notarinstitut. A new project of ELRA?
3. The present belgian land registry
We would like to provide answers to “everything you always wanted to know about the Belgian Land Registry (but were afraid to ask)”, but we are forced to limit ourselves to the introductory knowledge that we can convey within the restrictions of this presentation concerning the organisation and operation of the Land Registry and the effect of registration at the Land Registry.
3.1. Organisation of the Land Registry
There are 48 Land Registry Offices and there is one Ship Registry Office (in Antwerp, of course).
Deeds or authentic acts are registered where the land is located. Each Land Registry Office stands for a certain part of the Belgian territory: the deeds or authentic acts concerning a plot of land are registered at the office where the land is located.
It should be noted that the Head of the Land Registry Office (the Registrar) is personal responsible for his of her actions. If the Registrar makes a mistake (a fault) which causes a damage, he or she will have to pay an indemnity. For instance, if a mortgage inscription is mistakenly removed and the mortgagee (i.e. the loaner) suffers damage as a consequence of this fault, the registrar will have to pay an indemnity. The Registrar is, of course, insured.
3.2. Operation of the Land Registry
The operation of the Land Registry is enacted in the Mortgage Act of 16 December 1851 –a better name would have been the Land Registration Act (cf. the name of the Land Registry)– and in several other Acts or Codes (the Judicial Code, the Civil Code, …).
3.2.1. What can be registered at the Land Registry?
Only deeds (i.e. authentic acts) creating or transferring a property right can be registered at the Land Registry Office where the land is located.
Note the three qualifications of this statement:
- A “formality qualification”: only deeds (authentic acts) can be registered.
- A “content qualification”: only deeds creating or transferring a proprietary right (including a mortgage and a lien) inter vivos (and certain long-term leases) can be registered.
- A “territorial qualification”: the deed must be presented at the Land Registry Office where the
land is located.
The first and the second qualification need some explanation.
A deed is “… a formal written instrument which acted at law to alter the rights and duties of the parties to it …” (J. E. Penner, The Law Student’s Dictionary (OUP, 2008), verbo Deed). A typical example is the document whereby the transfer of the ownership of land from the seller to the purchaser (i.e. the conveyance) is affected.
We translated “deed” into “authentic act”, as did recently the European Parliament (Motion of 4 November 2008 for a European Parliament Resolution with recommendations to the Commission on the European Authentic Act, concerning the intro- duction of a common system for the mutual recognition and enforcement of authentic acts, European Parliament RR\754476EN.doc; but note that the future “common system for the mutual recognition and enforcement of authentic acts” does not apply to the authentic acts “… that relate to property and should or may be subject to entry or mention in a public register”; cf. the recently posted enquiry of our esteemed colleague Harald Wilsch).
Only deeds, authentic acts are accepted to be registered. This is an illustration of the role that the notaries play in our land registration system: the quality of the land registration is in part guaranteed by the fact that the notary examines the planned transfer or creation of a property right, and carefully formulates the agreement in the deed.
It might be worth noticing that, maybe contrary to what many think, there is in Belgian law no obligation to register a land transaction. A sale of land need not be “enshrined” in an authentic act. According to our contract law, a verbal agreement is (fully) binding and a verbal sale of land transfers the property of the land: the ownership of land can be transferred without a trace in the Land Registry.
Another particularity of the Belgian system of creation and transfer of proprietary rights is the distinction between the “internal” effects of a contract creating or transferring a proprietary right (e.g. a contract of sale) –the effects of the contract between the parties to it– and the “external” effects of the contract –the effect of the contract on third parties. Between the parties, the proprietary right is created or transferred; bona fide third parties may neglect the creation or transfer of the proprietary right, as long it is not entered in the register at the Land Registry.
Only deeds, authentic acts creating or transferring a property right inter vivos can be registered.
Although our law (also) contains a closed list of recognised property rights (the numerus clausus principle), contracting parties have tried –and will no doubt keep on trying– to create new property rights, normally in order to escape the limits of the recognised property rights.
A rather famous case can illustrate this. A landowner and a building company agreed that the landowner waives his right of accession (i.e. “the land attracts the building”, the owner of the land becomes “automatically” the owner of the building) so that the building company is perpetual owner of
the building. The right of the building company was presented as a new property right. The Land Registry refused to register the deed: it was not a deed creating or transferring a property right and such a deed cannot be registered. It took years of judicial proceedings –and a rather chaotic and contradictory case law– before the highest Civil Court judged that contracting parties cannot create new property rights (and that the Land Registry rightfully refused to register the deed).
Note that only transfers inter vivos can be registered. Transfers mortis causa cannot be registered at the Land Registry … but those transfers are registered at another branch of Patrimonial Documentation.
3.2.2. How is the deed registered at the Land Registry?
There are four types of registration:
- The transcription: the deed –(still) the whole deed– whereby a property right is created or transferred is scanned and the indexed copy of the deed is archived. The indexing of the deed refers to the persons involved in the creation or transfer of the property right (e.g. the seller and the buyer of the land).
- The inscription: mortgages and liens are not transcribed, but inscribed (cf. the entry in the English “land charges register”).
- The mention in the margin: certain events which could affect a transcription or an inscription are mentioned in the margin of the corresponding transcription or inscription. For instance, a claim to annul a transcribed contract of sale must be registered in the land register before it can be brought before the judge.
- The removal of an inscription: if the loan is repaid, the mortgage inscription can be removed. This seems straightforward, but can be fairly complicated (particularly the partly removal of an inscription) and rather risky for the registrar (who, remember, is personally responsible).
3.2.3. A person-based registration
The last item in the operation of the present Land Registry is perhaps the most important. In the present land registration system, the deeds are not connected with a piece of land, but with the contracting parties. We have a person-based registration system, not a land-based registration system.
Needless to say that this is a flaw in the system, the more so since the actual owner of a plot of land is not necessarily the registered owner: an adverse possessor could have become the “legitimate” owner of the land, a registered owner could have died and we learned that the transfer of his assets mortis causa cannot be registered, …
But no land registration system is flawless, perfect. For instance, we all wrestle with adverse possession. And, fortunately, some of the flaws of the present system are on the brink of being remedied: the other “land registration institutions” are being integrated in Patrimonial Documentation … (see below, the future land registration).
3.3. Effects of registration at the Land Registry
A deed (an authentic act) that can be registered (cf. the “content qualification”) must be registered at the Land Registry: a non-registered deed may be ignored by the bona fide purchaser, that is, the created or transferred property right is not enforceable against the purchaser.
The register of deposit plays an all- important role in fixing the priority of the transcriptions and inscriptions: first in time.
4. The future belgian land registration
4.1. Patrimonial Documentation: a revolution
The birth of Patrimonial Documentation (shortly before the magical year 2000) was a revolution, a lesser revolution than the French, no doubt, but a Glorious Revolution, nevertheless. The three principal actors in land registration –the Land Registry, the Registration Offices and the Cadastre– were joined together and were integrated into the new Department (or “General Administration”) of Patrimonial Documentation.
And the focus of Patrimonial Documentation was to shift from the traditional taxation and tax collection to the administration of the documentation and the dissemination of information.
4.2. Aim: legal certainty
Since the creation of Patrimonial Documentation, the three complementary registrations are joined and are to be –fully– integrated into a single documentation.
- The Land Registry documentation is, from the point of view of legal certainty, the most important.
- The second source of registration data is “flowing” from the Registration Offices.
- The Registration Offices act in the registration process in two ways:(a) they “register” certain deeds and other written documents (and even certain non-written contracts) in order to tax the legal act, the contract contained in the document and(b) they determine the content –and the value– of the patrimonium (i.e. all the assets and debts of a person that form a legal universality) as it is trans- ferred from the deceased to his successors (or heirs).
- The last (but not the least) documentation is provided by the Cadastre.
The cadastral documentation is of the utmost importance as to the identi- fication of the plots of land and the constructions built on or under the land and as to the description of the land (including the boundaries of the plot of land).
And the cadastral documentation constitutes a title registration –an imperfect title registration and mainly for tax purposes (i.e. not designed to manage the enforceability of property rights)– but a title registration nevertheless.
It goes without saying that the integration of the three registrations enhances the legal certainty. The purchaser can rely on the information he can get from the documentation: the information concerning the plot of land (precise identification, description, boundaries, …) and concerning the rights the persons hold in the plot of land (the person selling the land is indeed the owner, the mortgage is removed since the loan is repaid, there is a right of way over the neighbouring land,…).
The question has been posed whether we should go a step further and let the present deeds registration evolve into a title registration system?
As Elizabeth Cooke –the recently appointed (property) Law Commissioner of England and Wales– explained, the deeds registration has two weaknesses: the deeds must be examined (the information must be extracted from the deeds, is not ready- to-use) and the purchaser is not protected against property rights that were not created or transferred by deed (e.g. the transfers mortis causa) (E. Cooke, Land Law (OUP 2006) p. 39).
Personally, I believe that we should review the traditional passive role of the registrar since we evolve towards a title registration system.
I believe that this evolution is inevitable: after all, what is the use of “official information” if it is not reliable, trustworthy? Can we, the public service, continue to impose obligations on intermediaries (real estate agents, notaries, etc.) to inform their clients, without indicating where the information is available and without guaranties as to the correctness and completeness of the information? Could or should “information” not be fitted into the (European) definition of a “product”, and thus bring along the application of the regime of product responsibility?
4.3. Strategy: cooperation
In the first business plan of Patrimonial Documentation the fundamental strategy to reach the objective of enhanced legal certainty was set out: in one word: cooperation.
- Internal cooperation. It is not enough to join the different “registration services”, they need to learn to cooperate, the processes they use must be coordinated, the data-flows must be redesigned, …
- The cooperation with other “registration institutions” –e.g. the regions and local authorities who hold valuable information concerning, for instance, town planning and environmental regulations– should be organised.
- The ways of collaboration with certain groups of professional intermediaries (the notaries, the real estate agents, the surveyors, etc.) need to be redesigned.
The aim is to build a system of authentic sources of data (i.e. data- sources that the public services must consult – in stead of demanding time and again the same information of the citizen or enterprise) and to arrive at a one-stop information shopping: everything the professional needs to
know about the land and the rights affecting the land –and that is a lot– is presented and available at one website.
In the context of documentation sharing and information, one of the main issues is the protection of the privacy: we collect documentation and we inform about the patrimonium “of the other person”, and this is necessarily an infringement of the privacy.
4.4. A dream or Yes, we can?
The evolution from the present (past) registration system to the future integrated registration system, let alone to the title registration system, is and will be a long and winding road.
- Will we be able to change our ways of working?
- Shall the different levels of government be willing to abandon the competition-model and shift to a collaboration- model?
- Are the intermediaries willing to review the cooperation with Patrimonial Documentation?
- And so on.
The introduction of computer assisted registration (e-conveyancing) in our offices and in the offices of the professional intermediaries might present an opportunity to embrace new ways of working together.