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

Compulsory vs. voluntary

According to Polish law, system of registration in LR basically has declarative effect with some exceptions of entries with constitutive effect, which is precisely indicated by material law, whereas these norms are placed in different law acts. There is not legal definition in Polish law what the declarative or constitutive effects of registration means, it is clearly stated in specific situations by law in words like e.g: art. 67 Act on land books and mortgage: “To set up mortgage the entry in land book is necessary.” There is not official legal catalogue of these exceptions.

Constitutive effect of entry is for:

–        to set up and transfer 99 years leashold (art. 27 ugn)

–        to set up separate ownership of apartament (condominium) (art. 7 ust. 2 ustawy o własności lokali)

–       to set up claim for separate ownership of apartment (condominium) and transfer this right on the base of contract of obligation (art. 9 ust. 1 i 2 ustawy o własności lokali)

–       to transfer limited right in rem (art. 245 (1) kc and to resign of this right (art. 246 par. 2 kc)

–       to warn against priority of limited right in rem disclosed in the land book  (art. 13 ust. 3 ukwh) and changes in priority of this right. 250par. 2 kc)

–       to set up mortgage (art. 67 par. 1 ukwh) and to resign of mortgage without  extinguishing encumbrance (art. 96 ukwh)

In Polish LR there is not the rule of compulsory registration the ownership or other rights in land book (rule of relative generality of land books). Therefore some real property rights are still not registered. There are few legal norms which oblige to register rights in land books, e.g. art. 92 of law on notary public which states that notary public is obliged to send the motion to the registry court once he/she has drown up the notarial deed of transfer the ownership right. It is compulsory to register rights which are dependent on the entry in land book (constitutive effect).

b) Effects to legitimize the owner

Legal presumptions. Registration as evidence of the right

Effects of registration and possession: adverse possession

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

In Polish civil law there is the presumption of land register credibility (rule of legal openness), according to the legal act we need to presume that the legal entry to the land register is made according to the actual legal status, and that deleted right doesn’t exist (art. 3 Act on land books and mortgage).

According to art 4 Act on land books and mortgage one cannot claim against legal presumption of right disclosed in a land book if he/she has presumption of right resulting of possession. According to Polish law the guarantee of public trust in land register what means that in a case of discrepancy between the legal status disclosed in the land register and actual legal status the entry in the land register speaks in favor of the person, who, through the legal action with the person entitled by the content of the land register, acquired the right or other right in rem (art. 5).

Remedies and procedural actions derived from registration may concern the cost of judicial registration case. The applicant has a possibility to ask for exemption from registration fee and this procedure is considered as separate law case solved by civil division.

B) External effects: effects to third parties

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

Positive effect. Indefeasibility principle. Bona fides effect. Requirements

As it is stated above, in a case of discrepancy between the legal status disclosed in the land register and actual legal status of real estate, the entry in the land register speaks in favor of the person, who, through the legal action with the person entitled by the content of the land register, acquired the right or other right in rem (art. 5)- it is a case of negative effect.

Bona fides effect is based on art. 6 Act on land book and mortgage, which states that guarantee of public trust in land books doesn’t protect unpaid disposals (e.g. donation) or disposals made in favour of purchaser who acts in bad faith. The law gives a definition of bad faith; there is not definition of good faith. According to Act on land book and mortgage in bad faith is a person who knows that land book content is inconsistent with real legal status of real estate, or one who easily could have known about it. To estimate the good or bad faith of acquirer, the moment of delivery the application to the land registry is binding.

C) Different kinds of registration and its effects:

a) Class of title

b) Type of entry        

c) First registration limitations

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

Class of title depends on right to the real estate. Possession or adverse possession cannot be register (it is not registered right in the LR, but it may be registered (entered) in the EGIB (Cadastre – administrative register of plots and buildings).

Registered titles in Polish system are:

Ownership (classical ownership):

–            Independent residential dwelling- Condominium, as well as premises for other purposes may constitute a separate property. If you separate the ownership of premises landlord is entitled to share in the common property as a right of ownership to the premises. You cannot demand the abolition of joint ownership of common property, as long as it takes separate ownership of premises. The property is a ground and common parts of the building and equipment that do not serve exclusively for owners of the premises

Co-Ownership:

a) co-ownership divided into shares (ownership title to part of the right e.g. judicial decision, notarial deed, administrative decision)

b) joint ownership not divided into shares (statutory community property between spouses (in marriage), community property between members of a civil partnership under the civil law contract)

Holdership (leashold) – up to 99 year leashold of the land owned by the State or local government unit (gmina, powiat, województwo)

Cooperative right to apartment (limited right in rem)  – Cooperative property ownership – Condominium is transferable right, to the heirs and is subject to execution. It is a limited property right- limited right in rem  (ustawa z dnia 15.12.200 r. o spółdzielniach mieszkaniowych; Dz. U. z 2013 r. poz. 1222, Act of 15.12.200 r. Housing Cooperatives; OJ of  2013. pos. 1222)

In Poland we have entries with different sort of effects. Mainly there are entries with full registration (e.g. ownership), but also they are automatic entries at the pre-section part which inform about the application for new entry to the LB (so called “dziennik księgi wieczystej”) and they have effect of priority preservation entries. We have also awareness remarks about discrepancy between information contained in LB and real legal status of the property.

First registration doesn’t differ from the following registrations. Legal rules are the same; apart from the special statement of the owner that he certifies that according to his knowledge any land book was not set up for the real estate.

Type of information given by land registry is divided into physical data and legal data. Physical data is placed in chapter I-O “description of real property” and it doesn’t have legal effect. It is based on cadaster data and is not contained by rule of public trust. Legal data is placed in chapter II (ownership), III (property rights and other encumbrances, warnings) and IV (mortgages). Entries in these chapters are subject of rule of public trust and have legal effect. They are subject of deep legal analysis . Associated data is closely tied to information about the public documents which are the legal title for entries and information about judicial cases which were opened in order to register rights and information (called “diary of land book” –  a sort of roadmap of the land book history)..