Legal effects of Registration

A) Internal effects: effects to the right itself and the entitlement

a) Registration and the process of transfer/acquisition of property rights

Constitutive vs. declarative

Constitutive registration: every property right comes into being only after registration, whereas before registration no right exists. Translative effects of  acts are conditioned by registration in Land Registries.

Declarative registration: any act which hasn’t been registered cannot be opposed to third parties.

Compulsory vs. voluntary

In a system where registration has constitutive effects, publicity is necessary and, for that reason, compulsory.  When registration has declarative effects, it could be considered voluntary.

b) Effects to legitimize the owner

Legal presumptions. Registration as evidence of the right

A registered right is considered to be public knowledge. If it is later cancelled in the Land Register it is presumed that it doesn’t exist anymore.

Effects of registration and possession: adverse possession

Registration of a “new” property right doesn’t suspend the adverse possession of a third party: the period of time he needs to acquire the good keeps on running.

According to art. 5 of Royal Decree 499/1929, whoever wants to register a right, which he claims he acquired by adverse possession, must produce a (no more rebuttable) Sentence to the LR.

Remedies and procedural actions derived from registration: actions derived from registration.

Only the registered owner can institute proceedings against a third party to defend his right.

B) External effects: effects to third parties

Negative effect: opposing effect of registered rights against non registered rights.

A registered right prevails over a prior non-registered right.

“A” transfers to “B” his property right. He later transfers the same right to “C”“C” registers his right before “B”: he purchased a domino.

Now “B” can’t register his right, because he purchased a non domino.

Positive effect. Indefeasibility principle. Bona fides effect. Requirements

A registered right exists until it’s written in the Land Registry.

A person, who purchases a plot from somebody incorrectly mentioned as its lawful owner in the Land Register, legally acquires the property, as long as he is fully unaware of the incorrectness of the Land Register. Similarly, if a mortgage has been incorrectly extinguished, it is not possible to assert to a subsequent purchaser of the property in good faith that the right in fact exists.

The system gives a twofold protection to the buyer:

–   Every LR entry is legally valid;

–  A non-registered claim cannot produce effects against the transferee in good faith.

So, in case of acquisition a non domino, if the transferee is in good faith, the buyer’s acquisition will receive protection even if the prior entry was mistaken or incomplete: his title will prevail over the title of the real owner; he will be legitimately entitled to transfer his title to third parties, unless the right-holder has challenged the transferee’s title by entering his counterclaim into the register.

This protection is not granted neither to the acquirer in bad faith nor to the mistakenly registered owner.

C) Different kinds of registration and its effects:

a) Class of title

Constitutive effect derives only from inter vivos acts.

Mortis causa acts, adverse possession (usucapio) judgments and Court orders have not a constitutive effect.

b) Type of entry

Two types of entries (Intavolazione and Prenotazione) have constitutive effect.

One type (Annotazione) has declarative effects.

c) First registration limitations

There are no differences between first and following registrations.

A special procedure was prescribed by an Austro-Hungarian Law (L. 17/03/1897 n. 9 B.L.I.) for the foundation of our Land Registry (impianto del Libro Fondiario)

d) Type of information: physical data/ legal data, associated data…

Registration of property rights has constitutive effects.

Registration of acts/facts/contracts has generally declarative effects.

All other data (Physical data/(Cadastral data) shown on the Real Folio have neither constitutive nor declarative effects.