January 1, 2013 / Marta Rękawek-Pachwicewicz
Doctor of law, member of Polish Association of Registraars in Cracow (Poland), senior registrar in Regional Court in Bialystok (Poland), lecturer of Stanislaw Staszic School of Public Administration in Bialystok (Poland).
Author of this article aims at finding the answer to few basic questions of the universal nature regarding public registers in the scope of the development of modern economy, taking electronic land registry in Poland as an example of public institutions of the modern state, serving the purpose of protection of citizens’ rights and state order, thanks to the utilization of the latest information technologies. Author of the paper aims to find answers to following questions:
- What are the public registries and what are their basic rules (at the example of Electronic Land Registry in Poland)?
- Do we need new public registers e.g. public land registry and what modern factors affect the public registry traditional rules ?
- Do we need to use and develop public electronic land registers in a given social and economic culture?
- Do we need them within or outside the court system in Poland ?
In order to answer four abovementioned questions I’ve shown the draft of organization and rules of the system of public land registry in Poland with short history outline.
What are the public registries and what are their basic rules (at the example of Electronic Land Registry in Poland)?
Searching for the answers to the first question- what are the public registries and what are their basic rules?- the Author found out that as a principle, the purpose of polish land registry is to assure security of legal circulation of real estate through disclosure of established legal status of real estate. Land Registry is composed of about 20 000 000 individual units called the Land Books.
Each Polish Land Book comprises of four sections:
First section contains entries regarding the mark of the real estate with ownership rights.
Second section contains entries regarding ownership and accessory rights (perpetual usufruct).
Third section contains entries regarding limited rights in rem, restrictions in real estate disposal, execution, other rights and claims.
Fourth sections contains mortgage entries.
Polish land book in order to be created must have entries in section I (what?) and section II (who?) E. Gniewek (ed.), 2005, p. 68-84). It is obligatory, entries in sections III and IV are optional according to the factual and legal circumstances. The Land Books are placed within the Land Register which is of an objective-substantial nature, as it concerns the real estate and not the owner.
According to the rule of presumption of land register credibility, the legal status of real estate entered to the register is binding, while deleted entry is non-binding.
Register entries are being made for real estates, which don’t have entries or where entries are missing or have been destroyed. Entries can also be made for the limited right in rem which is the cooperative member’s right of ownership of premises (art. 1 Act of 6 July 1982 on land register and mortgage; O.J. 2001, No 124, pos. 1361 with further amends., further cited as u. k. w. h. and art. 244 civil code.).
Institution of land register in Poland is based on the following rules:
- The rule of land register being governed by the judiciary.
- The rule of generality, what means that land register entries should be established for all real estates.
- The rule of registration, what means that the court makes an entry to the land register in opposition to simple acknowledgment of documents.
- The rule of declarative nature of entry, what means that Polish law did not adopt a system, according to which the very fact of entry being made results in creation of subjective right. The essential entry is of an extraordinary nature and concerns mostly limited rights in rem disclosed in the land register.
- The rule of publicity and openness (formal), according to which everyone has a right to browse the land register in the presence of court employee. Browsing the land register in the electronic system translates to displaying the content on the computer monitor connected to the system (from the October 2010 browsing of land register is possible on the internet Electronic Land Register (Electronic Land Book) published on the webpage of Ministry of justice (www.ms.gov.pl).
- The presumption of land register credibility (rule of material openness), according to the legal act we need to presume that the legal entry to the land register is made according to the actual legal status. There is a presumption that the deleted legal entry does not exists, one may not use the legal presumption derived from possession against the presumption from the legal entry in the land register.
- The guarantee of public trust in land register what means that in case of discrepancy between the legal status disclosed in the land register and actual legal status the entry in the land register speaks in favor of the person, who, through the legal action with the person entitled by the content of the land register, acquired the right or other right in rem (B. Zdziennicki, (2001), p. 14-16). It’s the only moment when one can acquire the real estate from the person not being the actual owner (the rule).
The land register proceedings do not bear the nature of dispute between the two equal parties before the court. It’s strictly a registration proceeding, which is accounted among the tasks of legal protection in the scope of responsibility of common courts (art. 1 Act of 27 July 2001 law on a system of common courts; O.J. 2001, No 98 pos. 1070 with further amends). Execution of the abovementioned rules has been given to court registraars (by registraar we also mean the senior court registraar). In the scope of their duties they have the competence of the court, unless the legal act states otherwise (art. 471 Polish civil procedure code).
The cases of non-litigious proceedings in the area of land register proceedings are handled by the district courts on the motion of applicant. One must attach documents confirming the legal basis of land register entry along with the application. Land register proceedings are conducted by court registraar or judge, with no need for the hearing, it’s so called: proceeding from behind a desk.
Entry might be made on the basis of document describing substantive action resulting in creation, change or cessation of right which is subject for the entry (the rule of substantial legalism). However the basis for marking the real estate in land register is the data of real estate cadastre. In most cases private document with notary seal or the formal document may be the basis for the entry, making it the document issued in the regulated form by the entitled public authorities and other state organs. Court order or administrative decision is also an official document. Bank documents signed by persons entitled to make declarations in scope of bank property rights and obligations and bearing the bank official seal (financial books, bank statements and other statements) are exception from this rule.
Do we need new public registers e.g. public land registry and what modern factors affect the public registry traditional rules?
Searching for the answers to the second question – do we need new public registers e.g. land register and what modern factors affect the public register traditional rules? – Author is giving some thoughts below.
Author conclude, that in modern society one of the major goals of every democratic state is creating and maintaining the social order. The task is very hard, costly and complex. Undoubtedly the government of every state wants to show the high rate of economic and citizen’s welfare growth to the elector. Therefore all legal instruments that can lead to achieving that goal are very important.
Modern state utilizes, within this spirit, all the achievements of technology and all IT inventions, such as database. It is expected that efficient state will utilize the instruments skillfully at the right time.
In the modern time information is very valuable, information is very important, as it arranges the social order.
That’s why modern societies are continuously searching for the solutions to store, process, update and utilize more information. It’s important as the chaos is dangerous for modern society, which is used to living in organized world and could easily fall into anarchy if the carefully created order was lost.
Of course the former thought is nothing new or revealing. Every modern observer of the world in the given time and moment of history will notice the pattern and will try to approach and tame it, find a rational and explainable mechanisms of functioning of legal, social and economic occurrences.
Within the determinants we need to seek the answer to the question, why electronic registers (IT data bases) managed by various public institution, such as electronic land register, which is managed by common courts in Poland, gained such a massive popularity.
At this very moment we can distinguish few dozens of various registers in Poland, most of them managed with utilization of IT. Among others there are three modern, national court registers, such as register of pledges , national court register , or land register, functioning within national IT network.
Common feature of all the registers is fact, that they are managed by common courts nationwide. The method to run them is utilization of modern computer techniques in order to create IT network of data bases. Every register is regulated in separate legal act and several secondary legislation acts. The Minister of Justice supervises the technical-organizational infrastructure in every instance. Registers differ by the scope and character of registered data (substantial or subjective), details of registration procedure, function and organization.
Modern court registers in Poland started functioning in 1995 as a part of the project of implementation of IT based system called Centre of National Court Registers (CNCR). Project was led by Polish-Norwegian team consisting of judges, IT specialists and economists.
Great success of this team was the 1998 launch of electronic Register of Pledges, and 2001 launch of electronic National Court Register – both are business registers. The latest greatest challenge of CNCR was creation of database for New Land Register – New Electronic Land Book (A. Stefanska, 2008, p. 9-12). It was greatest and hardest considering the huge amount of “paper” land books (est, 17 000 000 files), high complexity of the register and the fact that it’s the oldest polish register, existing since 50ies. At the end of 2012 we must attest that all three registers work very efficiently, meeting the goal set for them at creation.
At the moment polish paper land books as traditional land registers are being replaced by national uniform electronic database of land register, regulating state of real estates and rights.
Authorities didn’t manage to connect it to the database of PESEL and REGON numbers, as well as with evidence of lands and buildings (kadaster). We need to mention, that creation of New Electronic Land Book Register was financially supported by the European Commission within the PHARE fund, and substantial support was given by German Ministry of Saxony.
Polish system of land register is close to German model, especially the structure of the register, connected to the cadastre of real estate, legal system and organization of judiciary (with the Rechtspfleger example). We can pronounce that polish land register is the younger sister of German ones and many German experiences were utilized. Implementation of polish land register in the form of IT database was carried out as an introduction in 6 courts, and was aimed at testing the efficiency of computer system and cohesion of legal norms lying at the base of the actions. Considering the success of the actions, the main programme of transferring data from paper registries to the IT database system is being carried out since 2006 in 133 courts supporting Migration Centers.
Summarizing, all the above mentioned elements of the system of electronic land register in Poland with accompanying rules, especially the rule of generality and openness of the registry are pointing to the fact, that public registers of real estate are necessary and serve the society with information on the legal status of real estate.
Turning the register into IT based accomplished the rule of openness of the registry, as they are publicly available in courts or at the web pages of Ministry of justice, they are also free, and therefore no one can pledge ignorance of the entries of land registry.
Access to register is limited only by the required knowledge of the number of the register for the given real estate. Therefore protection of the data disclosed in the land register is assured.
Land register is also up to date, I have to admit, that entries to the register are in most cases processed within few days. The downside of the reform is the fact that polish legislator, in contrary to economical registers, does not enforce the entries to land register for every real estate, and that’s why many real estates are not in the electronic system. It’s the effect of maintain the declarative nature of entries (although some i.e. establishing perpetual usufruct have the legally constructive, creative character). In very few cases the real estate must be mandatory entered to the electronic land register.
Do we need to use and develop public electronic land registers in a given social and economic culture?
Searching the answer to the third question – do we need to use and develop public electronic land registers in a given social and economic culture? – author noticed few of the following occurrences.
Surely in the times of economic crisis maintain the public electronic land registers is essential. As always in such situations, the goal of the implemented reforms is to create the legal frames which are friendly for the development of market economy.
Former experience shows, that “important element for the right functioning of market economy is creation of efficient legal structures, which are tasked with securing the debts arising among the participants of the economic trade” (M. Leśniak, (2004), p. 2-3). As mentioned in literature, important role is played by banks and other bodies supplying the money to entrepreneurs and consumers. The substance of financial support of economical entities works in form of many instruments, which normally break down to giving financial credit. To assure the right functioning of the bank system, those who give financial credit want to guarantee the certainty, that after a contracted period of time they will reclaim the financial means given to the debtor and on top of that they will achieve profit in form of interest (M. Leśniak, (2004), p. 2-3).
That’s why the section IV of land register, where courts enter the mortgage data is so very important for the polish economy. Therefore bank which has given credit is in possession of the legal entry (information), that the given real estate secures the debt (in form of mortgage), moreover, anyone who is interested in buying or other legal action connected to the real estate, is in possession of information regarding the mortgage.
Actual social and economic culture guarantees that the rule of legal assurance and protection of parties the real estate market is present, mostly because the citizens are better informed about the legal issues, about their rights to the Court and they use internet every day as the natural everyday activity. They are able to gather out of the website different information, also the formal one concerning the business register (e.g. National Judicial Business Register) or Electronic Register of Land. The above mentioned public electronic registries are governed by Ministry of Justice and they are safe and easy to use. Moreover Polish official public judicial registries are free to access so citizens do not have to pay for the information. What is also important for development of real estate market and the whole economy in Poland is easy access to the lawyers what is the result of the 2005 reform which change many rules concerning the access to the legal professions. Free market of legal services has had important meaning for decreasing of the prices for legal advice or representation at the Courts and other public institutions.
Another aspect of land register is also very important for Polish economy, especially in the crises time, information entered to the IIIrd section of the land book, which contains the information about the legal limitations in purchasing the land e.g. because of execution proceeding or insolvency of the owner. As the practice shows number of such data significantly increased during last two years – it is not good sign for the condition of Polish business.
Do we need them within or outside the court system in Poland?
The fourth question – Do we need them within or outside the court system in Poland? – given the Author a few conclusions.
The land registry in Poland is managed by the regional courts, what seems to be controversial because of long and complicated legal procedures (the civil procedure regulated by the Civil Procedure Code of 1964 with amendments). It is underlined under the discussions that they should be taken out of the state structure and delegated to the private, external bodies e.g. public notaries. This process is so called “delegation of power” and is quite popular in modern economy where public tasks are delegated outside the public administration in terms of decreasing the costs and increasing the quality of public service (the basic thesis of New Public Management). However, having this in mind, it seems that at present moment both – Polish tradition and efficiency and quality of such organization of the land registry do not indicate of the necessity to introduce such reform (see: E. Gniewek (ed), 2005, p. 75-76). Moreover, we cannot forget that the cost to manage such complicated electronic tool and legal database is enormous and for that moment financial support is fully guaranteed only by the state budget
It is not also rational that the entity with the task to prepare the contract on land purchase data for the parties has also the power to control the legality of that contract and enter data to the Land Book. It seems that the conflict of interest may appear quite easily here. Therefore, as the High Court interprets, the Polish Constitution of 1997 entrusted the Courts also “out – constitutional competences” concerning the legal protection of citizens which are parallel to the justice administration. Such organization of the State is rational and required because of the rule of efficiency of the State and public institutions. One of the delegated competences is to conduct the judicial public registers which carry out the managerial function of the State. This point of Polish history still shows for the historic fear of delegation the important public tasks to private entities. Also mentality of Poles towards real estate ownership is crucial here. However the idea “to take the public registries out” the Court system and delegate them to the civil servants cooperating within the courts as it is organized in Spain (Spanish registradores) is not finally closed. It is relatively new idea and it is the matter of time to solve whether such move is necessary, anyway it needs many discussions and precautionary measures.
To sum up, it should be said that Polish system of Land Books is based on modern, electronic public register containing information about legal status of the real estate. This Register is built on the Norwegian and German experiences thanks to international cooperation. At the moment mostly all the Land Books are transferred to the electronic database, however not all the Polish assets are legally regulated by them. There are some lands which still are not in the land book. We also still have the paper files where the documents concerning the land are enclosed. The land books established by the 1946 are still legally valid. The land books are kept by courts which are empowered by Polish law with some cardinal rules to fulfill main aims of the public register. Those rules are the presumption of land register credibility, guarantee of public trust in land register and rule of publicity and openness. In the times of decreasing the economy which is also present in Poland this register is very important as the tool to help banks and other financial institutions in their financial activity. Definitely it is efficient and trustful instrument to assure the mortgage, to inform where the land is touched by someone rights or is the subject of legal execution. Some very new situations in Poland show that not legally regulated part of financial activity at the private financial institutions may occur very dangerous for the citizens and to the State financial system even (The AmberGold case, August 2012).
Therefore, the author underlines that the social and economic development of the Western world, as well as rapid changes in Central and Eastern Europe makes public registries rules and system of their organization more complicated and their activity more common and essential. The hope is that the process of globalization and European integration should also help to find better solutions for good development of the land sector. That is why such initiatives as CROBECO project and activities of organizations at the European level (European Land Registry Association – ELRA) and global level (International Centre of Registration Law – CINDER) are so crucial.
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