January 1, 2013 / Wim Louwman
As the European organization of Land Registers, we welcome this vision document as a good step forward. Improved awareness of the different roles of Land registers and Cadastres can increase support on the European level. Cooperation with other specialists can help each of us to find the right answers to new technical and European challenges to achieve our purposes. For Land Registers that is not just the recording of legal rights over land. It also concerns the reliable publicity of these rights, the protecting of rights, the prioritizing of rights and the enforceability of rights. Because we are backed by the authority of the State we can also play a fundamental role in underwriting economic values of property rights and safeguard an efficient national, and in future European, real estate market. I will shortly comment on the specific questions that Land Registers have to face and new technical and European developments concerns.
Presenting differences between cadastral and legal data
A first challenge concerns the presenting of information with new Geo Information Systems. Of course we should make use of the wonderful opportunities offered by these systems. But in doing so we cannot neglect the difference between legal and cadastral data especially concerning boundaries. By “legal boundary” I mean the boundary of the owner’s property rights. In some EU Member States it is rare, or even impossible, for the legal boundary to be different from the cadastral boundary. But in many others, this can easily and validly happen. For example, in many EU Member States the existing legal system for buying property rights is based on what I call “you buy what you see”. A buyer sees a fence, a ditch, a hedge or another physical boundary and accepts the offer to sell land that extends to that physical boundary. In the contract, a description of the location of the boundary or an added global map is sufficient to create a new legal boundary. Separately, at another time, a surveyor measures cadastre boundaries for tax purposes. If afterwards a dispute arises, the Cadastral boundary is not accepted as the legal boundary. Ultimately the court has to decide. This system has advantages and disadvantages. An advantage is that beforehand no costly investigations about the exact location of boundaries have to take place. Those costs are only paid afterwards if a boundary dispute arises. It is something like the difference between German “grundlichkeit” and British or French “pragmatism”.
A difference between two cultures that are both respected by ELRA. In future it will be easier to visualize physical boundaries, tax boundaries and exact new legal boundaries on one computer screen and on maps that could be added to contracts. This could encourage National governments to change their system for acquiring property rights but that does not change the fact that valid legal transfers from the past were based on global descriptions in words and are completely valid. So for the coming 50 years in many European countries differences between legal and cadastral boundaries have to be accepted. Neglecting that could disturb the market in property rights and so undermine the economic value, mentioned before. That is why in the Common Vision we have agreed to work together on a comparative study of this issue.
The use of spatial data
Another challenge concerns the use of spatial data. Spatial data alone cannot define property rights or provide an enforceable judicial title. A general rule in as far as I know all European countries is that buyer and seller only can reach a valid agreement when the object of the agreement is sufficiently identified. It means that the geographical as well as topological spatial data have to be properly visualized for both the buyer and the seller. Also according to the recent DCFR on European contract law no valid agreement can exist without plain and intelligible language (Book II, 3:106 DCFR).
A registrar who scrutinizes the contract, and has to verify whether a valid agreement was reached, needs evidence of that. Otherwise he has to refuse registration or in deeds systems refuse updating the registration. So I can imagine that in future a process could be needed, as now exists in Netherlands, for the registration for pipelines and public limitations. On the basis of spatial data, maps are processed and accepted by parties before a notary. In advance a draft of the map and the spatial data is provided to and archived by the registrar. The pipeline is registered with an unique identifier.
The latest development concerns plots without unique identifier. This is the case with public limitations such as the obligation to clean up polluted soil. Pollution does not stop at the cadastral or legal boundary. So the boundary of the object of the public limitation cannot be identified by the legal or cadastral boundary. The plot is just identified by the map that is derived from spatial data and recorded in the landbook. Again the spatial data are converted to a visual document that has to be approved by the registrar. A practical solution that allows the use of new techniques with respect for existing legislation.
Cross border conveyancing and mortgaging
Europe has issued a number of regulations and directives that should stimulate the development of a European market and a European legal space. In 2010 ELRA launched the CROBECO project to contribute to this purpose in the real estate market. The project was supported by the Commission and finished in June 2012. The project described an alternative European conveyancing process that could contribute to better cross border service of documents (art 81 TFEU). For property rights the law of the country of the plot (“lex rei sitae”) (art 345 TFEU) is fully respected, but for contractual and non contractual obligations the law choice of Regulations Rome I and II and the choice of forum of Regulation Brussels 1 is used to make the law of the country of the foreign buyer applicable. Clauses with these choices are added to contracts in the native language of the home country of a foreign buyer, and improve faith that there is sufficient legal protection.
This process is only possible for plots in countries that allow submission of foreign deeds. To ensure timely receipt of information and conveyancing documents, the process is based on electronic communication. The leading principle is respect for existing legislation and techniques. This means that the CROBECO conveyancer needs to have sufficient knowledge of different types of electronic communication (electronic lodging, electronic registration, electronic conveyance) and of at least two national legislations (that of the contractual law and that of the property rights). Because of the differences between British and Irish common law systems and continental civil law systems, the different deeds and title systems for Land Registers and the national differences within those systems, the task of a CROBECO conveyancer is complicated.
We concluded that specialized CROBECO conveyancers are needed. To support them a framework of guidelines and possible supportive tools has been described, in the so-called CCRF: “Cross Border Conveyance Reference Framework” (see www.ELRA.eu/). Recently ELRA was awarded a grant by the European Commission for a project to implement the CCRF into practice. Initially a group of Dutch and English notaries is willing to participate in this CROBECO 2 project for cross border buying of property rights in Spain and Portugal. Later on, extension to other countries is foreseen. We provide them with information from a repository of clauses, with assistance from a helpdesk in Spain and Portugal and the necessary software.
The new technical possibilities as well as the new European rules provide new possibilities. But we have to take precautions to safeguard legal certainty. The support from other stakeholders as is described in this vision document can help to achieve that goal.