Real Estate


All countries in Europe have national laws that relate to the acquisition, ownership, transfer and encumbrance of real estate. A review of just several countries will indicate how similar the systems are. (This is not an area of law in which the EU has directly intervened as yet, although many matters affecting real estate are covered by specific EU Secondary Legislation, such as that regarding construction and environmental matters. Please see Chapters on "Environmental Law" and "Construction".)


In Austria, the main sources of real estate law are the Civil Code (ABGB, "Allgemeines Burgerliches Gesetzbuch", for general property and lease matters), the Rent Act (MRG, "Mietrechtsgeszetz", for many types of leased offices, shops and residences) and the Joint Ownership Act (WEG, "Wohnungseigentumsgesetz"). Statutory distinctions are made between (i) "immoveables" (the land and its various components, including minerals and permanent structures) and (ii) "moveables" (objects and fixtures which can be removed without damaging their inherent substance, such as furniture). Provisions are made for absolute ownership of land (tenure, estate in fee simple, and other rights in rem, for which transfers must be recorded in a land registry, the "Hauptbuch", or "main book", maintained by the Bezirksgerichte, local lower courts) and for real estate rights of less than absolute ownership (such as leases and the special "Superaedifikat", relating to structures which may be removed and are not considered part of the real estate).


The land registry consists of the document collection ("Urkunden-sammlung"), which is subdivided into three parts, the A-folio ("Gutbestandsblatt", showing the address and legal description of the property), the B-folio ("Eigentumsblatt", showing the current and prior owners) and the C-folio ("Lastenblatt", showing any registered encumbrances, such as mortgages, servitudes, and rights of purchase).

Parties may enter into contracts regarding the transfer of land but these are without effect upon the transfer of title until the appropriate documentation has been registered, in a form which has been protocolised by an Austrian "Notar" (notary).

Contracts of sale contain warranties (such as good title) which are required by statute, as well as others which may have been negotiated (such as the existence of a valid building permit) but generally do not exclude matters (such as defects) of which the seller was aware but did not disclose.

Security may take a variety of forms, of which the most common are the fixed mortgage ("Hypothek") and the current account mortgage ("Hochstbetragshypothek"). Both of those must be registered and, upon uncured default ("unremedied breach") by the debtor, may give right to a forced sale of the property in favour of the creditor.

Leases are contractual forms of less than absolute land ownership and are seldom registered. The MRG and other legislation establish rules for lease and tenancy terms, including matters regarding duration, warranties and rights of termination and other remedies.


The land registry consists of the document collection ("Urkunden-sammlung"), which is subdivided into three parts, the A-folio ("Gutbestandsblatt", showing the address and legal description of the property), the B-folio ("Eigentumsblatt", showing the current and prior owners) and the C-folio ("Lastenblatt", showing any registered encumbrances, such as mortgages, servitudes, and rights of purchase).

Parties may enter into contracts regarding the transfer of land but these are without effect upon the transfer of title until the appropriate documentation has been registered, in a form which has been protocolised by an Austrian "Notar" (notary).

Contracts of sale contain warranties (such as good title) which are required by statute, as well as others which may have been negotiated (such as the existence of a valid building permit) but generally do not exclude matters (such as defects) of which the seller was aware but did not disclose.

Security may take a variety of forms, of which the most common are the fixed mortgage ("Hypothek") and the current account mortgage ("Hochstbetragshypothek"). Both of those must be registered and, upon uncured default ("unremedied breach") by the debtor, may give right to a forced sale of the property in favour of the creditor.

Leases are contractual forms of less than absolute land ownership and are seldom registered. The MRG and other legislation establish rules for lease and tenancy terms, including matters regarding duration, warranties and rights of termination and other remedies.

In Finland, most land ownership issues are governed by the Real Estate Code 1995 (Law 540/1995, "Maakaari"), which came into effect on 1 January 1997, and contains detailed specifications for the acquisition of real estate (Part I, Chapter 2, Articles 1-34, "Kiinteiston kauppa"), titles and mortgage registry (Part II, Chapters 5-10 "Kirjaamisasiat ja niiden kasittely"; "Lainhuuto-ja kiinnitysrekisteri"). Leases, mortgages and servitudes are handled in ways that are very similar to the practices in Austria, Germany or Sweden and there are full details in the "Maakaari" regarding issues such as precontracts, defects, delays and failures to perform, contesting title and the filings of notices of lis pendens, as well as the registration of deeds and encumbrances ("Kiinteistopanttioikeus").

In France, virtually the same distinctions are made between immoveable property ("biens immeubles") and moveable property ("biens meubles") and regulations regarding both are found in the French Civil Code. Absolute ownership ("propriete") confers substantial rights of dominion and use, upon registration of the appropriate documentation ("contrat de vente", or contract of sale) at the registry of mortgages and deeds ("bureau des hypotheques"). Forms of ownership involving less than "absolute dominion", such as a leasehold ("bail") (French Civil Code Articles 1713 ef seq.), will bind the parties upon completion of a contract. In certain cases, protocolisation of the contract by a French "notaire" may be necessary. The French Civil Code (Articles 2124 et seq.) recognises a variety of charges which must be registered to be effective against real estate, such as the conventional mortgage ("hypotheque") and the easement ("servitude").

Leases in France for commercial purposes ("baux commerciaux") must be for a period of at least nine years and give the lessee the right, at the agreed upon end of the lease term (unless in substantial default), to renew the lease for an additional nine years (or longer), the lessee being entitled to an indemnity ("indemnite d'eviction") in case of non-renewal (French Commercial Code, Articles L. 145-1 to L. 145-60 and Decree dated 30 September 1953). Every three years, if certain conditions are met, the rent can be revised.

Real estate law and procedures in Belgium are very similar to those in France and the principal legislation is in the Belgian Civil Code, which is based upon the French Civil Code. Even the numbering systems tend to be parallel. For example, the Belgian legislation on leaseholds is contained in Articles 1714 et seq. of the Civil Code.

In Germany, real estate issues are governed mainly by the German Civil Code ("Biirgerliches Gesetzbuch", abbreviated "BGB"), the Land Register Rules ("Grundbuchordnung", abbreviated "GBO"), the Act regarding Residential Property and the Permanent Right to Abode ("Gesetz iiber das Wohnungseigentum und das Dauerwohnrecht", abbreviated "Wohnungs-eigentumsgesetz" - "WEG"), the Act regulating the Level of Rent ("Miethohegesetz") and rental tables issued by local authorities setting out a range of levels of rent which can be charged in a certain local area ("Mietspiegel"). Similarly to Austrian law, German law distinguishes between "essential parts of the property" which are part of the property and components that are only attached to the property temporarily (which are not considered as being part of the property) and chattels serving the economic purpose of the real estate. German law recognises absolute ownership of land and rights. Transfers must be recorded in the Land Register ("Grundbuch"). The transfer deed in relation to real property has to be notarised by a German notary for such transfer to be effective and legally binding. Leases of land ("Pachtvertrag") or tenancy agreements in relation to flats or offices are not subject to registration.

The Land Register contains data relating to every existing property in Germany ("Grundbuchblatt") and is kept by the Local Court in which the property is located.

German securities include in particular mortgages ("Hypothek") and land charges ("Grundschuld"). The creation of these securities is usually subject to registration in the Land Register.

In Italy, all real estate assets are recorded in either the "Ufficio del Territorio" (local "land registry") or the "Ufficio del Catasto" ("cadaster", or map records). Transfers of real estate must be registered (Italian Civil Code, Articles 1350 and 2643), after appropriate protocolisation by an Italian "notaio", who, as in other jurisdictions, certifies that the vendor is the true owner of the property to be transferred and is also responsible for the filing of the deed with the appropriate land registry. It is also necessary to register joint ownership agreements, mortgages, lease agreements with a duration of more than 9 years (which is also the case in France, for leases of 12 years or more) and contributions of real estate to the assets of a corporation by way of capital.


As in other jurisdictions, the vendor warrants title, warrants full compliance with the registration requirements, warrants that current tax obligations regarding the property have been fulfilled, as well as warranting any specific issues as to construction and building permits.

Italian law recognises various type of interests that are less than absolute ownership ("diritto di proprieta"), such as servitudes ("servitu attive"; "servitu negative") and, in general, has a real estate regime quite similar to that of all other European countries.

Leases in general are addressed in Italian Law 392/1978. There are renewal provisions similar to those in France but the renewal period tends to be six years rather than nine. In case of substantial uncured default, the lessor may undertake judicial enforcement proceedings for rent due and for recovery of the property ("procedimento di sfratto"). Similar eviction, recovery and unlawful detainer provisions exist in all European countries, under different terminology.

In Luxembourg, real estate law is primarily to be found in Articles 516-710 of the Luxembourg Civil Code, which makes the familiar distinction between immoveables and moveables. As in some other civil code jurisdictions, leaseholds ("louage de choses") are not technically treated as interests in real estate but as contractual rights between lessor and lessee. In practical terms, there is virtually no difference with any other jurisdiction and, indeed, the respective obligations and rights of the lessor and lessee are specifically regulated by the Civil Code. The registration system for deeds and mortgages is substantially similar to that in Italy and France ("administration du cadastre"; "bureau de conservation des hypotheques"), deeds need to be notarised and registered (by "acte authentique") and various rights of less than absolute ownership are respected (such as the "droit de passage"). The land and the buildings upon it ("droit de superficie") can sometimes be legally separated, in ways which are similar to the Austrian "Superaedifikat". Vendor warranties are of the type to be expected in any jurisdiction, including the warranty of quiet enjoyment ("garantie d'eviction") and the warranty against inherent defects ("garantie des vices caches").

In the Netherlands, the law relating to real property ("onroerende zaken") and its ownership ("eigendom") is largely regulated by the Dutch Civil Code, although there are additional statutes and administrative regulations dealing with some specific issues, such as transactions which affect properties of historical significance ("Monumentenwet") or that fall within the national Building Decree ("Bouwbesluit") or local building regulations ("Bouwverordening"). The main forms of ownership are absolute title and leasehold ("erfpacht"), although other interests are recognised, such as usufruct ("vruchtgebruik") and the servitude or easement ("erfdienst-baarheid"). The procedures mentioned above regarding the land registry ("Kadaster"), notarial deeds and the requirement to register every deed or mortgage ("hypotheek") are all similar to the procedures in theNetherlands, including the procedures for automatic rent review (governed by the Rent Act, or "Huurwet") and lease term extension (often for an additional period of five years).

In Norway, the situation is much the same as elsewhere. Absolute ownership ("eiendomsrett") is the highest form of ownership, but there are also provisions for co-ownership (under the Co-ownership Act, or "Sameiloven"), leaseholds ("husleie"), positive easements and servitudes ("positive servitutter"), options, restrictive covenants ("negative servitutter") and mortgages ("pantobligasjon"). Many construction matters are addressed in the Building Rights Act ("Tomtefesteloven"). Somewhat similarly to Austria, the land registry books are divided into two parts, a daily journal ("dagboken"), in which transactions are recorded as they occur, and a registration book ("grunnboken") of prior transactions. Many common issues arising in connection with real estate are addressed in the Sale of Property Act ("Avhendingsloven"), the Tenants Act ("Husleieloven") and the Land Registration Act ("Tinglysingsloven").

In Scotland, real estate law is similar to that in the UK (please see below), although there are a few minor differences in terminology and procedures.

In England and Wales real estate is held in the manner set out by statute ("Law of Property Act 1925"). Land can be held in two ways: either freehold or leasehold. There are two systems of conveyancing and of proving title and third party rights in land: (i) the old "unregistered" system which is governed by the rules of common law and equity, as amended by the Law of Property Act 1925 and the Land Charges Act 1972 and (ii) the new and more common "registered" system, governed by the Land Registration Act 1925. All land became subject to compulsory registration in England and Wales on 1 December 1990, and all leases with a term of seven years or more must be registered (as from October 2003). Conveyancing ("transfer of real estate ownership") is a two stage process involving firstly the agreement of a contract for sale and secondly the completion of the contract by the transfer of the legal estate. The Law Society (which governs the ethics and procedures of lawyers in England and Wales) produces standard commercial property conditions which are widely used in conveyancing and are usually incorporated into contracts for sale. The Unfair Terms in Consumer Contracts Regulations 1999, SI 1999/2003 are generally accepted as applying to land contracts and allow buyers to challenge as unfair any terms not negotiated between the parties. The Land Registry maintains a register of land containing key information. The register is split into three parts: the "Property Register", which describes the type of estate; the "Proprietorship Register", which gives details of the registered owner and the nature of the registered interest and any limitations on the registered proprietors dealings with the land; and the "Charges Register", which details encumbrances adverse to the land such as minor interests, restrictive covenants, mortgages, legal rent charges and easements.



Real estate law in Denmark and Switzerland, respectively, is mainly covered, (I) in the case of Denmark, by the Danish Civil Code (various provisions) and in the "Tinglysningsloven" No. 622 of 15 September 1986 (land registration law) and (2) in the case of Switzerland, the Swiss Civil Code ("Zivilgesetzbuch'V'Code Civil", Articles 655 et seq.), and the Swiss Code of Obligations ("Obligationsrecht'V'Code des Obligations", Articles 253 et seq.). In all material respects, the principles, practices and procedures are like those outlined above.

This is also the case in the Czech Republic, Estonia, Latvia and Lithuania. For example, in Lithuania, the following have been enacted and are in substantial conformity with real estate law and practices anywhere in Europe: the Lithuanian Civil Code (18 July 2000); Law No. 1-1539 (24 September 1996) (on real estate registration); Law No. 1-1240 (19 March


1996) (on construction); Resolution No. 1278 (27 September 1995) (on land servitudes); Law No. 1-446 (26 April 1994) (on land); Law No. 1-2936 (6 October 1992) (on mortgages); and Law No. 1-1607 25 July 1991 (on land reform).

Interesting Europe-facts: The London "City Code" is not a municipal code but a code of approved conduct regarding takeovers and mergers in the UK, as formulated by the Panel on Takeovers & Mergers.

+ Some important maritime law terms in English, Danish, Dutch, French and Greek:




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