January 1, 2015 / Alasdair Lewis
As we all know, the purpose of the European Union is to facilitate the free movement of people, goods, services and capital.
The citizens of the EU have, in increasing numbers, exercised these freedoms. They cross borders to study, work and trade. And they have purchased real estate in other member states.
This is not surprising as Europe has become a continent of home owners; over 70% of homes in the EU are owner-occupied.
It is estimated that 2.5 % of EU citizens currently reside in another member state. This equates to approximately 12,800,000 people.
However, buying a property in another country is a potentially risky enterprise. European land law has not been harmonised which means that a potential purchaser is stepping into an alien legal system.
Some of the risks are well publicised (see, for example, “European Property: Rights and Wrongs” edited by Diana Wallis and Sara Allanson”). The British media regularly carry stories about people being deprived of their holiday or retirement homes. Failure to address the issues and mitigate the risks will eventually act as a brake on the further development of the single market.
Some of the issues stem from the huge diversity in legal systems and traditions we find across the European Union. We have,
- Systems based on Common Law and systems based on Civil Law
- Land Registries that register deeds and Land Registries that register titles
- States that guarantee the titles granted by the Registry and states where no such guarantee is given
- Land Registers that are open to the public and land registers that are wholly or partly private
- Jurisdictions where the Land Registry and Cadastre are separate organisations, jurisdictions where they are combined and jurisdictions that do not have a cadastre
So what can the Land Registries, and the Registries working together in ELRA and other European associations, do to address these issues?
I think there are 3 obvious areas where the Land Registries can help,
- We can make the information we hold in our registers available to those who need it
- We can explain the information, for example through the use of fact-sheets and glossaries, and
- We can help customers with the formalities that must be complied with in order to transfer or mortgage real property
There are a number of current projects and initiatives that are working on these issues.
The Council of the European Union has committed, in its E justice Action Plan, to making the European E Justice Portal “a single access point….to the information in national registers”. These include the land registries. The Commission have recently been carrying out a Feasibility Study to determine the best way to enable that “interconnection” to occur. ELRA has been treated as a key stakeholder in that Study.
The Feasibility Study is considering how best to build upon the work of the European Land Information Service (EULIS). EULIS currently provides access to information in 6 national land registries (Austria, Ireland, Lithuania, Netherlands, Spain and Sweden).
To assist the proposed interconnection, ELRA has received an action grant for its IMOLA (Interoperability Model for Land Registers) Project. The Project will investigate whether it is possible to create a common template that can be used to present land registry information from any member state.
Even if land registry information is presented in a common template, given its technical nature there is a need to provide explanatory information alongside it. Both the European Land Registry Network (ELRN) and EULIS have produced glossaries and fact sheets. The ELRN has, for example, produced factsheets on Land Registry Publicity, Hidden Charges and Description of Land Registration Systems.
As regards formalities, ELRA’s CROBECO (Cross Border Electronic Conveyancing) Project has established that it is possible for a notary in one member state to create a contract in his own country and successfully submit it electronically to a Land Registrar in another member state using existing legal frameworks.
Although these are all useful initiatives, more needs to be done to facilitate our fellow citizens buying property with confidence in other countries.
Whenever questions of land law harmonisation is discussed, lawyers will point to Article 345 of the Treaty on the Functioning of the European Union so it is worth reminding ourselves what that article says,
Article 345: The Treaties shall in no way prejudice the rules in Member States governing the system of property ownership.
I would submit that the meaning of the Article is far from clear. I would also submit that the scope is more limited than many people imagine.
I believe that much of the diversity we see is not related to “the system of property ownership” and therefore is not caught by the provisions of Article 345.
To take 2 examples,
- It seems to me that whether or not land registry information is open to the public is a question of data protection or privacy, not property law.
- Similarly, the rules that govern who is entitled to draw up a contract or deed is a question of consumer protection or competition law. It is difficult to see how these rules could be said to relate to the “system of property ownership”.
So I believe there is scope for legislators to reduce the differences between different land law and land registration systems without offending Article 345.
However, I also believe that we do not need to wait for legislators to act. We as administrators can also help.
The CROBECO Project shows what can be achieved within existing laws and legal systems.
Many of the formalities that land registry customers must follow are determined by the land registries themselves. I believe there is scope for land registry officials to work together, in organisations such as ELRA, to voluntarily to reduce diversity and to harmonise our procedures.
At the very least, when we come to revise our national procedures, which should try not to make the situation worse!