International Forum: Property Transactions in the Digital Age 30 th September, Mülheim an der Ruhr

Transcription

1 International Forum: Property Transactions in the Digital Age 30 th September, Mülheim an der Ruhr Public Disclosure Requirements and Protection of Trust with Security Rights over Real Property in a European Comparison Andreas Luckow Head of International Real Estate Finance Association of German Pfandbrief Banks

2 International Forum: Property Transactions in the Digital Age, 30 th September Contents A) Diversity and Functional Differences of Registration Systems B) Demand for Information C) The Round Table at vdp D) Legal Structures of Land Registers E) Protection of Trust F) Assessment of the Results G) Summary 2

3 International Forum: Property Transactions in the Digital Age, 30 th September A) Diversity and Functional Differences of Registration Systems 3

4 International Forum: Property Transactions in the Digital Age, 30 th September A) Diversity and Functional Differences of Registration Systems Information from land registers must be understood and interpreted, assessed, depending on local law Register systems in Europe have an immense legal variety Some functional differences: Recordation vs. registration (common law terminology) Deed collection vs. book entry vs. certification Mirror function of the land register? Curtain function of the land register? Guarantee function of the land register? 4

5 International Forum: Property Transactions in the Digital Age, 30 th September B) Demand for Information for Security Rights over Real Property Banks need detailed information to assess the risk coverage by security rights (mortgages, hypothecs etc.) 5

6 International Forum: Property Transactions in the Digital Age, 30 th September B) Demand for Information Cross border finance: still small for residential real estate, but growing for commercial real estate Cross-border property loans of former Pfandbrief Banks (held at 31st Dec.) in bn. 6

7 International Forum: Property Transactions in the Digital Age, 30 th September B) Demand for Information. Eligible for Pfandbrief cover pool: EU, EEA, Switzerland, USA, Canada, Japan 7 As at:

8 International Forum: Property Transactions in the Digital Age, 30 th September B) Demand for Information Mortgage cover assets international 19% mortgage cover assets 246 bn of which cross border 46 bn as of 31.Dec 2009 domestic 81% source: banks disclosure according to Art 28 Pfandbrief Act 8

9 bn Euro International Forum: Property Transactions in the Digital Age, 30 th September B) Demand for Information Mortgage Pfandbrief cross border assets (Dec 09) Source: vdp, Pfandbrief banks disclosure acc. Art 28 Pfandbrief Act total cross border 46 bn 9

10 International Forum: Property Transactions in the Digital Age, 30 th September B) Demand for Information Demand for Information on Legal Issues for Loan structuring Loan contracts Documentation and collateral checks Valuation Risk Assessment 10

11 International Forum: Property Transactions in the Digital Age, 30 th September B) Demand for Information Demand for information from other Countries: Banks Associations EU-Commission and International Organisations Scholars Legislation 11

12 International Forum: Property Transactions in the Digital Age, 30 th September C) The Round Table at vdp 12

13 International Forum: Property Transactions in the Digital Age, 30 th September C) The Round Table at vdp Project at vdp: Round Table Flexibility, Security and Efficiency of Security Rights over Real Property in Europe Method of operation Easy exposure: One question for all countries with 2 7 answers One qualified expert per jurisdiction Selected questions on security rights over real property in procedure, utilisation in practice, registration, enforcement and insolvency 13

14 International Forum: Property Transactions in the Digital Age, 30 th September C) The Round Table at vdp 8 workshops since reports were published in German in 2006 (volume 23 vdp publication series) 5 additional reports were published in 2007 (volume 32 vdp publication series) Workshop V 4 / 5 September 2008 in Berlin (vol. 37 vdp publication series and vol. 39 in English translation) Workshop VI 26 / 27 March 2009 in Berlin / Workshop VII 5 / 6 November 2009 in Berlin Workshop VIII 20 / 21 Mai 2010 in Berlin (extended edition: vol. 43 vdp publication series and vol. 44 in English translation) Workshop IX 9 / 10 December 2010 in Berlin published in 2006 published in 2007 Slides concerning all 22 countries published in vol. 37/39 2nd edition 2010 (vol. 43/44) 14 JP

15 International Forum: Property Transactions in the Digital Age, 30 th September C) The Round Table at vdp Austria Mario Thurner / Ninel Jasmine Sadjadi (Center of Legal Competence, Vienna) Belgium Bosnia H. Croatia Czech Republic Estonia France Germany Greece Hungary Japan Lithuania Netherlands Norway Poland Portugal Romania Russia Serbia Slovenia Spain Switzerland Turkey Ukraine Josef T'Jampens (Union Professionnelle du Credit, Brussels) Prof. Dr. Meliha Povlakić (Univerzitet u Sarajevu, Sarajevo) Prof. Dr. sc. Tatjana Josipović (Sveučilište u Zagrebu, Zagreb) Dr. Petr Dušek (GE Money Bank, a.s., Prague) Prof. Dr. Rein Tiivel (Sisekaitseakadeemia, Tallinn) Maître Laurent Hosana (Jusot & Associés, Notaires, Paris) Prof. Dr. Rolf Stürner (Universität Freiburg) Dimitrios-Panagiotis Tzakas (Rechtsanwalt (Dikigoros) Athen, LL.M. (Hamburg)) Dr. András Botos (Magyar Jelzálogbank Egyesület, Budapest) Prof. Tomomi Nakayama (Meiji University - Law School, Tokyo) Ieva Lukrecija Erstikyté (Swedbank, Vilnius) mr. Hans Kemper (Schaap & Partners, Rotterdam) Prof. Dr. Hans Fredrik Marthinussen (Universitetet i Bergen) Dr. Agnieszka Drewicz-Tułodziecka (Fundacja na Rzecz Kredytu Hipotecznego, Warsaw) Dr. Armin Reichmann / José Manuel Ferreiro (Dr. Reichmann RAe, Frankfurt/Main) Adrian-Stefan Sacalschi (FHB Kereskedelmi Bank Zrt. NL Frankfurt/Main) Dr. Tim Lassen (Eurohypo AG, Moscow) Miloš Živković (Univerzitet u Beogradu/Živković & Samardžić, Belgrade) Prof. Dr. Matjaž Tratnik (Univerza v Mariboru, Maribor) Prof. Dr. Sergio Nasarre Aznar (Universitat Rovira i Virgili, Tarragona) Kurt Haefeli (UBS AG, Zurich) Y. S. Kaan Kalkan (Diem & Partner Rechtsanwälte, Istanbul / Stuttgart) Anna Progrebna, (Arzinger & Partner, Kiev) 15

16 International Forum: Property Transactions in the Digital Age, 30 th September C) The Round Table at vdp Methodology of the Round Table: At first: country reports for particular countries by standardized questionnaires: (property Law Project der EUI) Vol. I and II (vol. 23 and 32 vdp publications series) Later: cross sectional approach with geographical slides Deficits: - Dogmatic of one country is not regarded; concentration of practical results - only clear answers, no details - only one type of security type per country Advantages: - clear overview - surprising insights by comparison 16

17 International Forum: Property Transactions in the Digital Age, 30 th September C) The Round Table at vdp 17

18 International Forum: Property Transactions in the Digital Age, 30 th September C) The Round Table at vdp Contents: I. Types of security rights over real property 5 II. Public disclosure requirements and protection of trust 20 III. Effects of accessoriness 7 IV. Protection of the owner 3 89 V. Enforcement 26 VI. Insolvency VII. Utilisation in practice 14

19 International Forum: Property Transactions in the Digital Age, 30 th September Ausgewählte Fragen der Stellung der Grundpfandrechte in Vollstreckung und Insolvenz I. Rechtscharakter Arten der Grundpfandrechte C) The Round Table at vdp The following slides show the legal situation of the types of security right over real property mentioned here, which are the most flexible types in their respective legal systems: 19

20 International Forum: Property Transactions in the Digital Age, 30 th September Ausgewählte Fragen der Stellung der Grundpfandrechte in Vollstreckung und Insolvenz I. Rechtscharakter Arten der Grundpfandrechte C) The Round Table at vdp The following slides show the legal situation of the types of security right over real property mentioned here, which are the most flexible types in their respective legal systems: 20 1) Since 1999 forbidden to use if the the owner is a consumer according to the Financial Contracts Act

21 International Forum: Property Transactions in the Digital Age, 30 th September D) Legal Structures of Land Registers 21

22 International Forum: Property Transactions in the Digital Age, 30 th September D) Legal Structures of Land Registers I.1 How many types of security rights over real property are there? 2 several types and forms of security rights only 1 type 1 JP 22 Eurohypothec according to Basic Guidelines: - in addition to national security rights

23 International Forum: Property Transactions in the Digital Age, 30 th September D) Legal Structures of Land Registers I.2 Are mortgages embodied in a security paper (certificated rights) or are they only entered in the register? both certificated security rights and register-only security rights 3 exclusively certificated security rights 2 1 exclusively register-only security rights JP 23 Eurohypothec according to Basic Guidelines: - depending on the national law

24 International Forum: Property Transactions in the Digital Age, 30 th September D) Legal Structures of Land Registers I.3 Can mortgages be established on several properties in such a way that the mortgagee can choose from which property to be satisfied? 4 yes, one security right can be established on several properties 3 yes, several security rights can be established securing the same debt 2 the amount of the debt must be divided on the properties JP no 1 24 Eurohypothec according to Basic Guidelines:

25 International Forum: Property Transactions in the Digital Age, 30 th September D) Legal Structures of Land Registers II.1 Who keeps the land register? courts 3 2 an independent public authority 1 a public authority subject to instructions JP 25

26 International Forum: Property Transactions in the Digital Age, 30 th September D) Legal Structures of Land Registers II.2 Which rights are registered? 2 proprietorship, security rights and other limited rights over real property 1 proprietorship and other limited rights over real property, particular register for security rights JP 26

27 International Forum: Property Transactions in the Digital Age, 30 th September D) Legal Structures of Land Registers II.3 Are contracts and disposals over real property concluded before a notary? yes, mandatory by law 5 4 yes, not mandatory for all types of transactions, but common in practice (e.g. for the purpose of third party protection) 3 use of notary not mandatory, but common in practice 2 notaries do exist, but are usually not involved in property transactions JP 1 27 not before notaries but usually with the assistance of specialised advocates or professional third parties

28 International Forum: Property Transactions in the Digital Age, 30 th September D) Legal Structures of Land Registers II.4 What is the connection between the land register and the cadastre? 3 joint administration of land register and cadastre completely separate, but the land register refers to the cadastre 2 there is no cadastre 1 JP 28

29 International Forum: Property Transactions in the Digital Age, 30 th September D) Legal Structures of Land Registers II.5 Are buildings part of real property (apart from rights equivalent to real property) or are they legally separate and registered separately? 4 part of the real property (superficies solo cedit) 3 not part of the property, but the real property and the buildings can only be mortgaged jointly 2 very often still legally separate, but consolidation is possible JP 1 always legally separate 29

30 International Forum: Property Transactions in the Digital Age, 30 th September D) Legal Structures of Land Registers II.6 Can requests for registration be indicated even before registration of a mortgage? 5 yes, with the effect that the rank is reserved against anybody 4 yes, with the effect that the rank is reserved against anybody, but for a limited period of time 3 yes, by a mention in the margin of the register with the effect that the rank is reserved in the registration procedure 2 no, but the register can be blocked for a certain period ( freeze") JP 1 30 no

31 International Forum: Property Transactions in the Digital Age, 30 th September D) Legal Structures of Land Registers II.7 How is the grantor s consent to registration verified? exclusively by documents authenticated by a notary a notarial certification of the signature is enough, however, documents authenticated by a notary are commonly used in practice by a signature certified by a notary, court or advocate 2 by the assistance of a notary or use of bank documents JP 1 by documents in writing 31

32 International Forum: Property Transactions in the Digital Age, 30 th September D) Legal Structures of Land Registers II.8 What is the basic structure of the register? registration of rights 2 1 collection of documents from which rights appear JP 32 Eurohypothec according to Basic Guidelines:

33 International Forum: Property Transactions in the Digital Age, 30 th September D) Legal Structures of Land Registers II.9 Can anyone inspect the list of current rights in the land register (excluding the actual registered documents)? unrestricted 2 restricted to certain persons 1 JP 33

34 International Forum: Property Transactions in the Digital Age, 30 th September D) Legal Structures of Land Registers II.10 How is the register technically designed? complete electronic procedures (e-conveyancing) without interference of a neutral keeper of the registry 4 supra-regional electronic database 3 electronic access, but regionally limited 2 1 JP register kept on paper only 34

35 International Forum: Property Transactions in the Digital Age, 30 th September E) Protection of Trust 35

36 International Forum: Property Transactions in the Digital Age, 30 th September E) Protection of Trust II.11 Is electronic access from other countries via EULIS (European Union Land Information Service) possible? 5 free cross-border access to the register over the internet yes 4 in preparation 3 under consideration 2 JP for the time being not planned 1 36 Eurohypothec according to Basic Guidelines:

37 International Forum: Property Transactions in the Digital Age, 30 th September E) Protection of Trust II.12 Is between the parties the validity of conveyance of real property dependent on registration? yes 2 no 1 JP 37

38 International Forum: Property Transactions in the Digital Age, 30 th September E) Protection of Trust II.13 Is the validity of the establishment of a mortgage dependent on registration? yes 2 no 1 JP 38 Eurohypothec according to Basic Guidelines:

39 International Forum: Property Transactions in the Digital Age, 30 th September E) Protection of Trust II.14 If registration of a mortgage is applied for with all necessary documentation, how long does registration usually last? up until 3 days 6 up until 2 weeks 5 4 up until 2 months 3 up until 6 months 2 up until a year JP longer 1 39

40 International Forum: Property Transactions in the Digital Age, 30 th September E) Protection of Trust II.15 Is the validity of the transfer of a security right over real property, which is not connected to a mortgage certificate, dependent on registration? yes 3 no 2 only security right certificates 1 JP 40

41 International Forum: Property Transactions in the Digital Age, 30 th September E) Protection of Trust II.16 Is the reliance of the acquirer of a mortgage on the contents of the register legally protected? 4 the register is always regarded as correct in favour of the acquirer the register is assumed to be correct, but this assumption can be proven wrong within a certain period 3 2 the register is assumed to be correct, but this assumption can be proven wrong JP 1 there is no protection of reliance in the register 41

42 International Forum: Property Transactions in the Digital Age, 30 th September E) Protection of Trust II.17 Is the creation of a mortgage effective if done by a mortgagor who is registered as owner but is not the true owner? 2 possible (legal relations are protected) 1 in principle not possible (true owner is protected) JP 42

43 International Forum: Property Transactions in the Digital Age, 30 th September E) Protection of Trust II.18 Is the transfer of a security right over real property effective if done by a registered mortgagee who is not the true mortgagee? 3 possible = protection of the acquirer 2 in principle not possible = protection of the true mortgagee JP 1 only the possession of the security right certificate is decisive 43 Eurohypothec according to Basic Guidelines:

44 International Forum: Property Transactions in the Digital Age, 30 th September E) Protection of Trust II.19 Is good faith acquisition of a security right over real property dependent on the expiration of a time limit? no 4 to some extent 3 yes 2 1 JP good faith acquisition not possible 44 Eurohypothec according to Basic Guidelines:

45 International Forum: Property Transactions in the Digital Age, 30 th September E) Protection of Trust II.20 Does an acquirer of property who is in good faith regarding the fact that there is no security right over real property acquire the property unencumbered? (extinction of a contractual security right over real property) 2 yes (legal relations are protected) 1 no (true owner is protected) JP 45

46 International Forum: Property Transactions in the Digital Age, 30 th September F) Assessment of the Results 46

47 International Forum: Property Transactions in the Digital Age, 30 th September F) Assessment of the Results The workshops developed the idea to assess the results (for all issuers, not only registers) Discussion showed: Assessment depends on perspective: Bank enforcement Bank usability (flexibility) Owner Legislator Perspective of the legislator regards also interests of third parties. Interest = well-understood interest 47

48 International Forum: Property Transactions in the Digital Age, 30 th September F) Assessment of the Results Systematic comparison of law and Assessment 48

49 International Forum: Property Transactions in the Digital Age, 30 th September F) Assessment of the Results Systematic comparison of law and Assessment 49

50 International Forum: Property Transactions in the Digital Age, 30 th September F) Assessment of the Results Support of scholars in the comparison of law Lobbyism national level EU Internal Rating (Basel II, CRD) LGD-Grading Compensation for non-existing data on recovery rates in real estate finance in most countries 50

51 International Forum: Property Transactions in the Digital Age, 30 th September F) Assessment of the Results Systematic comparison of law and Assessment 51

52 International Forum: Property Transactions in the Digital Age, 30 th September F) Assessment of the Results Systematic comparison of law and Assessment 52

53 International Forum: Property Transactions in the Digital Age, 30 th September F) Assessment of the Results Systematic comparison of law and Assessment 53

54 International Forum: Property Transactions in the Digital Age, 30 th September Systematic comparison of law and Assessment 54

55 International Forum: Property Transactions in the Digital Age, 30 th September F) Assessment of the Results Systematic comparison of law and Assessment 55

56 International Forum: Property Transactions in the Digital Age, 30 th September F) Assessment of the Results The Assessment System is open for changes Example: SPV-Structure in France - important for LGD-Grading - Example: New mortgage act in Poland from Legal reforms may show reasonable results - 56

57 Maximalwert B. Herzegowina Belgien Deutschland Estland Frankreich Frankreich (SPV) Griechenland Japan Kroatien Litauen Niederlande Norwegen International Forum: Property Transactions in the Digital Age, 30 th September Österreich Polen (heute) Polen (ab 2011) Portugal Rumänien Russland Schweiz Serbien Slowenien Spanien Tschechien Türkei Ukraine Ungarn F) Assessment of the Results Total Gesamtergebnis addition -- Verwendbarkeit - usability

58 Maximalwert B. Herzegowina Belgien Deutschland Estland Frankreich Frankreich (SPV) Griechenland Japan Kroatien Litauen Niederlande Norwegen International Forum: Property Transactions in the Digital Age, 30 th September Österreich Polen (heute) Polen (ab 2011) Portugal Rumänien Russland Schweiz Serbien Slowenien Spanien Tschechien Türkei Ukraine Ungarn F) Assessment of the Results Systematischer Rechtsvergleich und Risikomessung Gesamtergebnis Total addition -- Eigentümersicht - owner

59 Maximalwert B. Herzegowina Belgien Deutschland Estland Frankreich Frankreich (SPV) Griechenland Japan Kroatien Litauen Niederlande Norwegen International Forum: Property Transactions in the Digital Age, 30 th September Österreich Polen (heute) Polen (ab 2011) Portugal Rumänien Russland Schweiz Serbien Slowenien Spanien Tschechien Türkei Ukraine Ungarn F) Assessment of the Results Systematischer Rechtsvergleich und Risikomessung Total Gesamtergebnis addition -- Gesetzgebersicht - legislation

60 Maximalwert B. Herzegowina Belgien Deutschland Estland Frankreich Frankreich (SPV) Griechenland Japan Kroatien Litauen Niederlande Norwegen International Forum: Property Transactions in the Digital Age, 30 th September Österreich Polen (heute) Polen (ab 2011) Portugal Rumänien Russland Schweiz Serbien Slowenien Spanien Tschechien Türkei Ukraine Ungarn F) Assessment of the Results Systematischer Rechtsvergleich und Risikomessung Total addition all scores Gesamtergebnis -- Addition aller Punkte

61 International Forum: Property Transactions in the Digital Age, 30 th September G) Summary 61

62 International Forum: Property Transactions in the Digital Age, 30 th September G) Summary Workshop of the Round Table will be continued: To keep results up-to-date (new jurisdiction and legal reforms) To develop questions and answers further To integrate more countries New matters: e.g. real estate like rights building rights, leasehold, usufruct etc. qualified co-ownership (security right on what kind of real property?) More than 100 slides in preparation, many of them on registration issues authentification issues (cooperation with Federal Chamber of Notaries) trust resp. fiducie resp. Treuhand 62

63 International Forum: Property Transactions in the Digital Age, 30 th September Verband deutscher Pfandbriefbanken e.v. Association of German Pfandbrief Banks Georgenstraße Berlin Phone Fax Internet: / 63

64 International Forum: Property Transactions in the Digital Age, 30 th September