Advancing Justice through Land Registries in the EU

THE ROLE OF LAND REGISTRIES IN THE EUROPEAN SPACE OF JUSTICE A) THE PRINCIPLES 1.- LR can contribute decisively to strengthen citizens rights and to remove obstacles for the integration of the single market. 2.- To be fully effective, National LR governing rules must be respected. 3.- The action of LR in the European legal space must be based on the mutual recognition principle, which implies to increase mutual trust. Action Plan Implementing the Stockholm Programme

B) THE OBJECTIVES 1.- Making Land Registry more transparent. 2.- Making Land Registry more accessible. C) THE MEANINGS (ELRA Action within the European Judicial Space) 1.- Facilitate access to Land Registry services, especially in cross border situations. – CROBECO Action Plan Implementing the Stockholm Programme

Research to develop better access to the Land Registry services in cross border situations: Why ? Contribute to development of European legal space and to development of the EU internal housing market (CRISIS) How ? Research project to develop framework for cross border conveyancing with respect for existing legislation (= CROBECO approach) Describe CCRF (Cross border Conveyancing Reference Framework) Test CROBECO approach in pilots Discuss CCRF in three conferences: Brussels - (November 2010); Tallinn - (December 2011); Brussels - (May/June 2012).

CCRF (rules and advices) ELRN (contactpoints in different countries) Clauses repository Protective clauses: (violation of duty of disclosure)Rome II, article 12, culpa in contrahendo compensation by the seller decision by court in home country foreign seller Support for foreign conveyancers, toolbox :

Different systems of electronic conveyancing CROBECO should be used in each of them eLodging (digital duplicate/ original on paper) eRegistration (lodgement of documents in electronic format only) eConveyancing (paperless transactions through most or all stages of the conveyancing process)

CROBECO process pilot:sending country: Netherlands;receiving country : Spain Collecting information by conveyancer in sending country

Deed:- executed by conveyancer in sending country- transmitted to registrar in sending country CROBECO process pilot

CROBECO process pilot • Registrar sending country: • adds advice; • forwards to registrar receiving country

Comments on CCRF Does CROBECO sacrifice legal certainty for the simple comfort of parties to sign in their own country? Certainly not. CROBECO just supports the E-Justice programme towards a European legal space under the condition that legal security is maintained.That is why CROBECO asked legal academics to assist from the beginning. One of the leading principles is respect for existing legislation. Only legal provisions within existing legislation are used.

Comments on CCRF Risk of fraud or mistakes because of limited knowledge foreign lawyer Add to CCRF: inevitable consequence of buyer and seller choosing applicability of two legislations (Rome I and II); In fact, the risk of fraud will be reduced: both the registrar from the sending and the receiving country will assess the deed. Only when the registrars from both countries agree that the current deed is legally correct, will it be forwarded (sending country) and processed (receiving country). - need for judicial training (CROBECO conferences) - need for support by easy accessible new technologies (clauses repository through e-Justice portal) - support by helpdesk with registrars from receiving country; - support by user groups (local notaries, real estate agents);

Comments on CCRF • Changed responsibilities/liabilities? • Add to CCRF: • no change in responsibility/ liability (one of the basic principles of CROBECO) • better support of lawyers • -registrar in sending country does not interfere in negotiations buyer/seller. • -increased cooperation registrars/ conveyancers (ELRN = ring of trusted registrars ) • Better explain in CCRF:

Comments on CCRF • Is “CROBECO statement” new exequatur ? • No, is primarily“non-suspension statement” : • receiving registrar has to refuse deeds from suspended notaries; • lack of European registration of suspended notaries; • sometimes lack of national registration of suspended notaries (Netherlands); • registrars in receiving countries are as first informed about suspension. • Statement helps receiving registrars, when scrutinizing formalities of a deed, according to local law. • Non-suspension statement could be abolished after European electronic registration of suspended notaries.

Comments on CCRF Increased complexity of process by intervention of registrar sending country? Add to CCRF: It is an optional helping tool for receiving registrars; Simplifies work of e-conveyancers because technical interoperability problems are solved by registrars (could be temporary until introduction of European interoperabilty layer) Simplifies contacts of foreign buyers, who remain clients of the home conveyancer they trust and who speaks their own language

Comments on CCRF Increased costs ? Depends on fee of conveyancer Choice of foreign buyer, what does he want to pay for more trust Limited additional costs scrutinizing registrar in sending country (in Netherlands, 4 times regular fee for 15 minutes= € 88,-)

Comments on CCRF • Relationship EULIS - CROBECO ? • Working together on: • updating glossary with definitions (EULIS definitions have to be consistent • with existing European definitions); • solution for liability issue (IT audit LINE, concerning possible loss of information) • Glossary could be added to CCRF (helps to decide on equivalent rights after introducing European certificates of succession) • Countries that do not want to pay for EULIS can remain or become CROBECO partner (MoU)

Comments on CCRF Cooperation with lending institutions? Focus on lending institutions in sending countries Publicity on CROBECO approach Support by repository of clauses also for mortgages Lending institutions could have their preferred clauses stored in repository Differences between: contractual relation mortgage deed (lex rei sitae)

Comments on CCRF Overcome legal interoperability problemswithout registrars (just by cooperation of conveyancers sending /receiving countries) ? Add to CCRF that: - Cooperation with conveyancer/ registrars is indispensable - sending conveyancer should have optional support from helpdesk/usergroup (with conveyancers receiving country) - receiving registrar should have optional support from registrar sending country

Comments on CCRF • Is there a registrar’s role in pre-registration contractual negotiations ? • No (misunderstanding) • Add to CCRF that optional role of registrar in sending country concerns: • information about (non-)suspension of notaries; • - help scrutiny of the receiving registrar, if this help is required; • - help conveyancers who can not directly send their deeds to a foreign country, due to technical or legal limitations or restrictions by assurance companies

Comments on CCRF Negative impact on sellers/buyers? Increased risk for sellers because of applicability Rome I and II? Add to CCRF: the free choice for applicability of Rome I and II and the advantage of improved trust and demand for buying foreign immovable property Disadvantage buyers complex cases? Add to CCRF: the need of step by step introduction to gain experience

Comments on CCRF Elucidate need for CROBECO because of lack of trust ? Add to CCFR that first reason for CROBECO is European programme for development towards a European area of justice. The whole of Europe is moving towards interoperability and easy access. The 4 freedoms are most important to create one European unity. CROBECO is just a logical (next) step. Add that lack of trust can just be a psychological effect on prospective buyers (negative television programmes). In times of uncertainty, people look for beacons. CROBECO wants to provide such a beacon. Add that we want to make European citizens better aware of possibilities. They have to decide whether they want to use this or not. CROBECO shows them it is possible, both legally and technically.

Comments on CCRF What if according to national legislation impartial advice by the conveyancer (notary) is demanded? Propose to add to CCRF that CROBECO respects existing legislation and does not want to change it. In fact, the respect for existing legislation is one of the basic principles. Emphasize in CCRF that if Rome regulations are applicable, the conveyancer always has to collect information about the foreign legislation (receiving country).

Comments on CCRF • How about the numerous checks a conveyancer has to do in advance? • Propose to add to CCRF that checking only the landregister is not sufficient. One of the pillars of CROBECO is respect for existing responsibilities. CROBECO does not want to change that. These numerous checks will remain the same. • Also a check on other charges (public limitations) is necessary. • To assist in these kind of investigations support could be provided from: • helpdesk in receiving country • user group in receiving countries (with local conveyancers, real estate agents) • - ELRN.

Comments on CCRF Does CROBECO limit parties contractual freedom? No A repository with optional clauses could be a helping tool, but the clauses will always remain optional and can be changed easily.

Comments on CCRF Does CROBECO change liability regime? No If receiving registrar asks advicece from his colleague in sending country this does not change responsibility and liability. The receiving registrar always remains liable and responsible. (Two of the (4) pillars: respect for existing legislation and respect for responsibilities).

Comments on CCRF Consequence of use of two languages ? Depends on national legislation (often bilingual deed is allowed if conveyancer understands foreign language or authorized interpreter is added). What if texts are contradictory ? Depends on national legislation. Leading principle of CROBECO is respect for existing legislation.

Comments on CCRF What about apostille ? The apostille has no sense in electronic documents. It was designed only for paper. E-documents are signed with digital certificates that state the identity and sometimes even the status of the holder. By using trustworthy IT-solutions digital certificates can be used cross border (cross certification). On paper documents apostille will possibly be abolished in future. Whether apostille is demanded in intermediate period depends on the legislation of the receiving country. For example: In Spain it is not necessary if registrar has enough knowledge of the foreign law Art 36 Reglamento Hipotecario.

Comments on CCRF Why electronic and not on paper? Thanks to the speed of electronic communication, the risk of intervening double selling, or intervening attachments is prevented (fraud prevention!) Simultaneous electronic sending and sending of paper (electronic lodging) is possible Step by step approach Respect existing legislation

Comments on CCRF One solicitor for buyer and one for seller or just one notary? Depends on existing legislation receiving country For example Spain accepts only notaries

Comments on CCRF • Risks of the choice of applicable law • Judging Rome regulations is out of scope of CROBECO • If Europe creates this possibility, it is the task of European registrars to: • - make European citizens aware of this possibility; • - support methods to prevent legal insecurity.

Comments on CCRF • Why should countries participate in CROBECO ? • European legal space (free market) • Collapsed housing market • Improve faith of prospective buyers

Comments on CCRF • How to become CROBECO partner as a receiving country ? • Provide clauses for repository in language receiving country or in English (if necessary, CROBECO takes care of translation); • 2. Start a help desk / user group.

Comments on CCRF • Will there be a follow up? • ELRA considers CROBECO 2 : • Improving clauses repository; • Introducing helpdesks and user groups (with local specialists receiving country and legal science) • 3. Updating ELRA website with CROBECO portal [use existing EU building blocks (Spocs), existing interoperability layer (E codex)] • 4. CROBECO portal with three areas: • professional info (for EULIS members link to LINE); • submission documents area with clauses repository and assistance to select target country /registrar (respect for existing e-conveyancing demands) • registrars area (to exchange information).

Advancing Justice through Land Registries in the EU