Real Estate (3rd edition)
Austria is a democratic republic consisting of nine federal states. Each of them is subject to individual state legislation in addition to the laws issued by the federal legislator, which are applicable in all federal states. As a consequence, real estate-related laws in Austria have different sources and may differ from state to state. However, the majority is passed by the federal legislator.
Main Sources of Law: While the basic real estate regulations can be found in the Civil Code (“Allgemeines Bürgerliches Gesetzbuch”, “ABGB”), several laws have been enacted to regulate specific areas of law. The most important of which are the Tenancy Act (“Mietrechtsgesetz”, “MRG”), which regulates wide areas of tenancy law, and the Condominium Ownership Act (“Wohnungseigentumsgesetz”, “WEG”), which contains specific rules for ownership of real estate in the legal form of condominium ownership. Beside this each federal state has its own building and land transfer laws.
Main Market Trends: In the international comparison of cities, the Austrian capital Vienna ranks in the top range. It offers a political and social stability, a dynamic innovative economy and a rich cultural program. However, the large volume of new supply in 2018 was followed by a marked decline in 2019. The availability of upscale office areas is expected to be reduced towards the end of the year.
Proposals for Reform: The legal environment for real estate transactions is very stable. There are no current significant proposals for reform that may have a substantial impact on real estate investments. The reform and deregulation of the Tenancy Act has been in discussion for the past few years but, taking into account the current political landscape, it is expected that a substantial reform will not be enacted in the next legislative period.
From 2010 to 2012 Brazil faced one of its most preeminent moments with an established economy, high employment rate and low default rate. However, from 2013 onwards the worldwide crisis and national particularities led to unemployment, credit shortage, interest rate escalation and, inexorably, demand reduction.
After a challenging recession period, a combination of structural factors has contributed to the country’s economy gradual return to an upbeat trend. Political scenario alterations, significant macroeconomic adjustments and a profound change of paradigm towards anti-corruption joined forces with the labour reform, resulting in a GDP growth and the reduction of interest and inflation rates.
The federal government acts in the recent years, including of the president in office since January 1st, 2019 – even if not very popular – as the reduction of public costs, capping the primary federal expenses, renegotiation of debts, approval of social security reforms, privatizations among others, steered indicators of economic recovery and empowered an increase in the financed real estate sales.
Complementing the enhanced economic scenario, certain changes in the law and legal trends also envision a market regulation and improvement. Midst several initiatives, two statutory changes that introduced new concepts to real estate transactions in the last years - and are still under development – are worth noticing.
The recent Federal Law # 13.786/2018 should likely balance the commercial and residential real estate development market establishing a fixed penalty in case of no-fault termination of purchase agreements by unit buyers. There is an extremely high rate of at will contract cancellations by buyers (achieving 30% in 2018 as per a São Paulo University – USP - and Real Estate Brazilian Developers Association – ABRAINC research ) that excessively burden the entrepreneurial activity, as the majority of judicial decisions convicted developers to return to buyer up to 90% of the price paid. There is no doubt that the law in force will discourage early terminations in benefit of the effective completion construction projects and delivery of the units to the buyers.
Another project bill expects to have optimistic reflections to the Brazilian real estate market, granting in rem rights to the time-share owners, which would authorize the enforcement of certain rights and obligations towards third parties and add value to such enterprises.
In addition, the Brazilian Central Bank regulated the issuance of a new covered bonds-based credit instrument (Letra Imobiliária Garantida - LIG), which ensures priority payment to investors backed up by real estate portfolio segregated from the other financing agents’ assets that should assist the market’s capitalization.
Another novelty in the real estate market is that the Brazilian Securities and Exchange Commission (“CVM”) had a change of heart with regards to condo-hotel public offerings. A 2018 rule considerably expedited condo-hotel investment contract registration procedures and now prioritizes a more equitable regulatory regime, in which the non-offering hotel operators no longer are deemed jointly liable with the developer for attributions naturally held by those who public offer securities.
In the end 2018, Federal Law No. 13.777 was enacted, including a specific regulation in the Brazilian Civil Code and in the Federal Law that rules public registries (including Real Estate Registry) for time-sharing regime – in which each condominium member owns fractional interest that entitle to them the use of the entire property for specific periods of time during each year. Ruling a system that was already used in Brazil, said law conferred more security for the condominium members in a time-sharing regime, to the extent that turned it possible to open a separate property record for each fractional interest and separated liabilities between the condominium members with in rem power.
Thus, in view of the economic recovery - with less inflation and more credit - and constructive legal improvements, the Brazilian real estate market is optimistic towards 2019, with the aggregated advantage that international investments are benefitted with quite an encouraging exchange rate.
1.1 The Cayman Islands maintains a title-by-registration system for real property, whereby the Registrar of Lands maintains a public register for each land parcel upon which registrable dealings are entered.
1.2 While the land registration system is primarily governed by legislation, case law will also apply and, in instances where there is no relevant local statute or case law, decisions in commonwealth jurisdictions may be considered.
1.3 The local real estate market continues to produce strong sales and price results:
(a) High-end condos on Seven Mile Beach continue to sell quickly at increasing prices.
(b) Changes to the stamp duty treatment of pre-construction purchases have resulted in a large number of new developments coming to market.
(c) The Cayman Islands’ largest developer, Dart Realty, acquired the Soleil D’Or wellness resort, the Comfort Suites resort and the Cayman Islands Brewery, completed its extensive renovation and rebranding of the former Beach Suites resort, and continues to expand its self-sufficient town known as Camana Bay. Recent developments at Camana Bay include the expansion of Cayman International School, completion of a new office building in the town centre, completion of phase one of a large retail zone (including a large grocery store), and commencement of construction of two new residential projects.
(d) Construction is underway on the first Hilton branded resort in the jurisdiction, as well as on a new mixed use plaza along Seven Mile Beach.
(e) The expansion of the Owen Roberts International Airport terminal was recently completed, and is expected to drive further growth in the tourism sector and the ownership of vacation homes. Work is now underway on expansion of the runway and apron.
(f) The Government continues with its plan to develop a new cruise ship berthing facility in the capital George Town, with the intent to proceed using a public private partnership (PPP) model. In this project the preferred bidder has been appointed (which is a consortium of two large cruise lines and marine contractors).
(g) Other developments still in the planning or pre-construction stages include the Mandarin Oriental resort and residences at Beach Bay, the Grand Hyatt resort and residences along Seven Mile Beach, the Watermark residences along Seven Mile Beach, and the Cayman Enterprise City and Special Economic Zone
The right of ownership is protected by the constitution of the Republic of Cyprus. The registration, transfer, mortgaging and generally the dealings that relate to immovable property are determined by Acts of parliament. Furthermore, regulations are issued by the assigned Authorities. The Courts also play an important law since Cyprus’s legal system is common law. The Supreme Court, issues decisions and the interpretation of the law by the Supreme Court is binding on all lower courts.
Moreover, Cyprus is an EU member, hence EU regulations and directives apply.
The lawful use and enjoyment of properties in Denmark is determined by way of public regulation. In general, the Danish legal framework regarding transactions involving commercial real estate is characterised by a high degree of freedom of contract and a reliable, electronic system for registration of rights to real estate (including title registrations).
In terms of leasing of commercial real estate, the landlord and the tenant are free to agree the terms of a business lease but with a number of important restrictions.
In contrast, residential tenants in Denmark enjoy a high degree of legal protection which cannot be mitigated or deviated from by way of agreement.
The transfers of the ownership of commercial real estate properties, the registration of securities and easements against them and their lettings are strictly regulated in France in order to ensure the security of the transactions and the protection of the business activities carried out within.
The Federal Republic of Germany consist of sixteen states (Laender), each of which is subject to individual state legislation – in addition to the laws set by the federal legislator which applicable in all states. Consequently, real estate-related laws in Germany result from various sources and may differ from state to state:
- Civil law: Regulations regarding the ownership and transfer of real estate, mortgages, encumbrances etc. and the contractual aspects of construction, leases, purchase and sale can be found in the German Civil Code (Buergerliches Gesetzbuch, BGB). The Civil Code is the centre piece of federal civil law legislation and applicable in all of Germany. It has come into effect as of 01 January 1900 and has seen just one major reform. Especially with respect to title to real estate it has strong influences of Roman law.
- Federal public law: The federal legislator also has the legislative authority concerning zoning and planning law. Hence, while the actual local zoning is under the authority of local municipalities, the overarching principles of zoning and planning to be observed in all of Germany result from federal legislation (in particular the Federal Building Code or Baugesetzbuch).
- Public law of the states: While zoning law is federal law, the actual building law (e.g. permit procedures and building requirements) is under state authority. All sixteen states have more or less different building codes (Landesbauordnung). The applicable building code is the one of the state in which a given piece of real estate is located.
- Public law of the European Union: The legislation of the EU has impact on the German real estate law, albeit in a narrow ambit (safety of buildings, planning and environment are the most important topics). Typically, EU legislation is transferred into federal or state legislation or technical norms and therefore not necessarily directly applicable.
- Last, but not least there are various taxes relevant to German real estate or to owners of real estate which are based on either federal and state tax laws.
While written law is the main source of German real estate law, court decisions may have (partially heavy) influence on the interpretation of those sources. Nevertheless, a court decision is not binding outside the specific case that was decided, since the concept of stare decisis is not enshrined in the German law system.
The institution of ownership and, by extension, the law of real property is primarily established and protected by the Greek Constitution and the Civil Code. However, limitations may be legally imposed on the right of ownership in cases concerning public interest.
The real estate regime in Greece has undergone only slight changes mostly associated with environmental issues, residential needs and better organization, and the regulation of short-term leases in the context of sharing economy via digital platforms.
In an aim to revitalize the real estate market, ease the tax burden on appr. 4 million Greek homeowners and change the mix of economic policies towards new investments and growth of the national product, a recent legislative development, namely the enactment of law 4621/2019, significantly reduces the Annual Real Estate Ownership Tax (ENFIA) paid by individuals. The law introduces an income-based reduction of the ENFIA property tax and a plan for individuals and business owners who owe tax debt that allows for repayment in up to 120 installments.
Further, the Greek Prime Minister just recently announced a three-year suspension of Value Added Tax (VAT) on new building permits and on unsold properties built after 1.1.2006. Aim of the measure is to ease the huge stock of unsold properties and stimulate the construction activity. The exemption covers all real estate properties in the Greek market. The VAT exception is also valid for “antiparochi”, where owners provide the land to builders in exchange for a number of future apartments.
This measure is contained in the list of measures included in the draft tax bill which shall soon be set under public consultation with the aim to attract investments and boost the real estate property market at large.
The real estate regime of Hungary is primarily based on civil law (the Civil Code), legislation relating to the land registry and construction, as well as relevant court decisions. In the past 30 years, the legal regime has been changed and consolidated several times in an attempt to accommodate the needs of modern business practices. Relatively few pieces of EU legislation apply to real estate in Hungary.
India, a federation of 29 States and 7 Union Territories, is governed by laws enacted and regulations issued by:
- Central Parliament on subjects in the Union List (e.g. taxes on income excluding agricultural income and taxes on the capital value of assets excluding agricultural land) and in the Concurrent List (e.g. transfer of property other than agricultural land, registration of deeds and documents, contracts, trusts);
- State Legislatures on subjects in the State List (e.g. municipal corporations and other local authorities, rights in or over land, including the relation of landlord and tenant and the collection of rents, maintenance of land records, taxes on lands and buildings) and in the Concurrent List to the extent they are not repugnant to any Central law provision on the same subject; and
- by rules, regulations and bye-laws framed by local bodies like municipal corporations and statutory authorities such as planning and environmental authorities.
Many Central legislations on subjects in the Concurrent List (e.g. registration of documents) have State amendments.
Customary laws are applicable to the extent not inconsistent with the Constitution of India (e.g. Islamic Law is applicable to succession in the case of Mohammedans).
A transaction in real estate in India must take into consideration:
- The legal and contractual capacity of the transferor to transfer the property or interest proposed to be transferred;
- The legal and contractual capacity of the transferee to acquire and utilize the property or interest proposed to be acquired, for the intended purpose of acquisition; and
- Statutory requirements and restrictions on transfer and use of the property or interest proposed to be transferred.
The stamp duty rebate scheme that was introduced in 2018 in respect of land purchased to develop residential property continues to encourage residential development, particularly in the PRS Sector. Approximately €415 million of development land sales were completed in the first half of 2019, comprising 30 land sales. Co-living concepts and PRS/Build to Rent schemes continue to be popular, accounting for 43% of investment spend in the first half of 2019. Major deals in this sector were Greystar's acquisition of Blocks B and E at the Dublin Landings development in Dublin Docklands for a reported €154.6 million and the off market sale of 166 apartments at Mount Argus, Harold's Cross, Dublin 6W for €93 million.
The hotel/licensed market has also been robust this year with the value of hotel deals approximately €206 million to the end of August 2019. Notable disposals include the Portmarnock Hotel and Golf Links, Portmarnock, Co. Dublin the Central Hotel, Exchequer Street, Dublin, the Heritage Hotel, Killenard, Co. Laois and the Castle Oaks Hotel, Co. Limerick.
Ireland’s 12.5% corporate tax rate on residential construction profits has led to an increase in the number of international investors establishing residential development companies, particularly in the Dublin area.
The Dublin office market continues to benefit from relocations due to the uncertainty around Brexit with particular growth in the serviced office sector. The retail market has also performed relatively well despite concerns about Brexit and the volume of retail sales rose by 1.9% in July 2019. Much of the activity in the retail market at present is heavily concentrated in the convenience, food & beverage, service and leisure sectors.
The vacant site levy, which aims to promote the development of vacant under-utilised sites in urban areas also continues to encourage disposals of sites for development.
The introduction of tax reforms in 2016 which negatively impacted Irish regulated funds focused on Irish property (so-called Irish Real Estate Funds or “IREFs”) has led to a decline in the popularity of such structures. There are now fewer tax advantages to larger non-Irish investors which has, together with the recovery of the domestic investor sector, led to an increase in the number of Irish based buyers of Irish property.
Stamp duty for commercial property was increased from 6% to 7.5% in Budget 2020 so this may have an impact on investment in commercial property in 2020.
Under the laws of Japan, ownership of land and buildings is separately indicated. The owner has the right to use, obtain profit from, and dispose of the real property.
There are no restrictions on who can be an owner, so foreign entities are eligible to own real property. However, foreign entities tend not to purchase real property on their own account, but generally instead to establish a vehicle in Japan to own real property due to the tax considerations.
It is also common to purchase real property by way of beneficiary interests, under which a trustee becomes a legal owner of property, mainly due to tax benefits.
Leasing rights are common under the laws of Japan. The rights are governed not only by the Civil Code but also the Act on Land and Building Leases that provides lease right holders with legal protection to some extent. Certain provisions that are disadvantageous to the lessee may be regarded as invalid under the Act.
There is a real estate registration system under which ownership, other rights in relation to property use, and security interests over real property are registered in accordance with the Real Estate Registration Act.
In addition, amendments to the Civil Code will come into effect on April 1, 2020 (as amended, the “Amended Civil Code”) . The scale of the amendments are relatively broad affecting a range of transactions included leases, guaranties and assignments of claims. The Amended Civil Code will accordingly affect real estate transactions, although the basic framework for such transactions will remain consistent.
Kenya is a common law jurisdiction and most common law principles relating to property apply unless expressly modified by Kenyan statute. Due to the unique cultural nuances within Kenya, there was a need to tailor property rights to cater for the diversity of Kenya’s people and their specific land needs. There was, therefore, a multitude of land-governance structures – pre and post Kenya’s independence.
In 2012, there was an overhaul of the legislations governing the real estate sector. As such, the various land regimes were consolidated into a single comprehensive and clear policy for land in Kenya.
Following this, the legal regimes under which real estate was administered (e.g. the Registration of Titles Act and the Registered Land Act) were repealed and replaced by new legislation. The Land Act, No. 6 of 2012 (Land Act) and the Land Registration Act, No. 3 of 2012 (Land Registration Act) were enacted to govern property in Kenya in a manner that reflects the aims of the 2010 Constitution. Noting that Kenya is comprised of a multitude of ethnicities and special interest groups, the Community Land Act, No. 27 of 2016 (Community Land Act) was also enacted to provide for the recognition, protection and registration of communal property ownership rights.
Kenyan real estate continues to be developed at a rapid rate with infrastructure being a major focus of the government. The road and railway network in Kenya has seen significant focus in recent years and has formed the bulk of the government’s partnership with development partners.
There has also been a surge in development by private persons with increased local and foreign investment in the real estate industry. The capital city, in particular, has seen notable changes to the skyline with commercial and mixed-use skyscrapers having been erected in the recent past. Inasmuch as in in the recent past, there was a slump in the real estate sector, investment in the real estate sector remains a high-return investment with gated residential developments being developed.
Mexico is a civil law jurisdiction; therefore, real estate transactions are subject primarily to the provisions contained in civil statutes. Mexico’s federal system is composed of 32 States and several municipalities within each state, and as such, federal and local regulations apply to real property matters. In general, real estate transactions are governed by local statutes (i.e. Civil Codes of the different States) and many permits related to real estate fall within the scope of the municipal authorities. However, it is important to note that there is an extensive uniformity among the local civil codes and other state-related statutes, particularly covering the conveyance of real property. Finally, Article 27 of the Federal Constitution provides a broad general regime for real estate transactions.
Currently, the real estate market in Mexico offers a wide variety of opportunities for domestic and foreign investors. Increase in funding sources and real estate demand are two of the main reasons for the development of this sector during the last few years. Mexico’s legal framework provide for different financial investment vehicles focused on commercial real estate transactions, such as private funds and trusts, as well as capital markets vehicles, such as FIBRAs (equivalent to U.S. REITs) and CKDs (please refer to the answer to question 6 for further detail of such vehicles).
The Principality of Monaco is a sovereign and independent State within the framework of the general principles of international law and the particular conventions with France. The territory of the Principality is unalienable. The principle of government is a hereditary and constitutional monarchy. The executive power is exercised by the highest authority of the Prince with a Minister of State at the head of the Government. The legislative power is jointly exercised by the Prince and the National Council.
The real estate market in Monaco is very attractive for many foreign investors. Its good performance emphasizes residential assets, where foreign capitals confirm their dominant role but the Monaco government guarantees by specific regulations the access to real estate assets to Monegasque citizens with a great focus on town planning and environmental issues.
Ownership and transfers of real estate, registration of securities, easements and lettings are strictly regulated in Monaco.
In a strict legal sense, real estate rights in Romania refer to ownership over land and/or buildings or dismemberments of such ownership (habitation, beneficial interest, superficies, easement rights, etc.). In a broader sense, they also refer to rights of use of land and buildings, especially in relation to housing, retail or office space leases.
Prior to 1989, the majority of real estate assets were owned by the Romanian State, having been illegally seized or expropriated en-masse by the communist regime, with significant parts of the country’s agricultural lands collectivised.
After Romania’s switch to a market economy, a large part of the Romanian real estate is now in the private domain. The legal regime applicable to property transfers has been significantly clarified and stabilised, following a turbulent time, as state owned enterprises were privatised and individuals filed claims for restitution of collectivised lands and illegally seized assets, in a climate of constant change and interpretable legislation.
- In the Russian Federation, real estate law is predominantly laid out by the federal legislation, and thus property rights are the same in all regions. Regional (there are 85 regions) and municipal legislation, however, may regulate territorial planning and zoning issues, as well as taxation.
- Russian Real estate law is largely codified. The four most important sources of Russian real estate law are the Land Code, the Civil Code, the Town-Planning Code and the Law on Registration of Real Estate Property, which are all federal statutes. Court practice also plays a significant role, especially in the form of the Plenary Rulings of the Supreme Court, which contain guiding interpretation of the relevant legislation.
- Real estate transactions in Russia are generally in line with international practice and can be structured both as share deals and asset deals depending on the specific circumstances. After the Civil law reform, which was implemented in 2015, Russian law expressly recognizes many legal concepts ordinarily used in international transactions, such as representations and warranties, indemnification clauses, as well as options.
- A distinctive feature of the Russian real estate market is that commercially relevant land is often publicly owned (about 90% of the total land in Russia), and in most cases can only be leased (rather than purchased) by private parties under long-term lease agreements. Notably, in Moscow land plots are predominantly available for lease, and not for sale, even where a construction project is implemented. In these cases the potential lessee must generally obtain the lease right through an auction (with a number of exceptions).
- Property rights to real estate are subject to registration in the public register. However, the public register is not sufficiently reliable, and may not reflect certain types of encumbrances of real estate (such as underground objects restricting the use of land plot, e.g. cable lines). Therefore, a specificity of Russian real estate transactions is that extensive due diligence is often required.
- In terms of real estate market, while many agencies report a continuing decline, the Russian government intends to use the construction sector as a driver of economic growth, reportedly planning significant investments. Still, the acquisition costs of major assets, especially in Moscow and Saint Petersburg, remain significant.
The Slovenian legal system is a civil law system. Ownership of real estate is transferred from seller to buyer through the registration in the Land Register, with the Land Register permission issued by the owner being a necessary prerequisite. Although the issue of Land Register permission is a legal transaction distinct from the contract of sale, an invalid contract renders the issue invalid.
Slovenian procedural law provides for interim measures such as interim injunctions. To obtain an interim injunction the party should demonstrate sufficient basis to bring legal action and the threat that imminent and irreparable or only marginally reparable harm will occur if an interim injunction is not granted. Some injunctions can be recorded in the Land Register and affect not only the parties to the dispute but also any third party. Generally, courts do not rule in equity. In cases where there is no provision in law that can be used to answer the questions raised in the proceedings, courts can rely on general principles of law. Parol evidence is generally admissible.
A contract of sale for transfer of real estate and Land Register permission must be in written form, therefore oral contracts are ineffective.
Spain is a parliamentary monarchy, based on a social representative, democratic and constitutional regime. The head of the state is the Monarch, while the Prime Minister is the head of the Government which is composed of the Ministers who collectively form the Council of Ministers.
Spain has a highly decentralised system of administration with 17 Autonomous Communities or Regions and two autonomous cities, each based on a parliamentary system, where executive power is vested in a regional Government, headed by a president, elected by and responsible to a unicameral legislative assembly.
Most of the Autonomous Communities have their own regulations affecting real estate matters to a different extent (contractual rules, planning laws, environmental regulations, etc.).
Our answers to the questions in this Guide are limited to the regulations passed by the Spanish Parliament.
Our answers to the questions in this Guide refer to commercial real estate.
Real estate law in Sweden is essentially based on statutory law with interpretive influences from case law.
All Swedish land is divided into independent property units (Sw. fastigheter), all registered in a central cadastral register, the Land Register (cf. below). A Swedish real property is traditionally a two-dimensional unit including all the land below ground within its boundaries and the air space above it. Since 2004, three-dimensional property units may also be created, allowing buildings or parts of buildings to become separate, transferrable properties within a two-dimensional ground unit.
For a property transfer agreement to be legally binding under Swedish law, certain formal requirements must be fulfilled. Requirements include written form, signature from both parties, a clear declaration of transfer, statement of purchase price and any conditions precedent. It is possible to transfer only a part of an existing property, such purchase will however become null and void unless sufficient parcelling measures in order to separate the purchased land from the original property are applied for within six months from the purchase and subsequently implemented. As a consequence of the formal requirements on real estate transfers, options on real estate acquisitions are not legally binding under Swedish law.
Lease law in Sweden is quite extensively regulated in statutory law, under provisions which essentially are mandatory to the benefit of the tenant. Swedish lease law includes provisions granting tenants a right to prolongation at the expiration of a lease term, sanctioned by an obligation for landlords to pay damages if prolongation is denied (unless specifically prescribed exceptions to the general rule are at hand).
From an international perspective, the Swedish real estate legal system is relatively well-organized, predictable and transparent, and generally provides a stable legal platform for investors.
- Thailand uses the Civil law system, under which all of the laws and regulations are set forth in the forms of codes and related legislation, for example: acts, emergency decrees and royal decrees.
- The Civil and Commercial Code (“CCC”) (Articles 1299-1434) provides key provisions on rights in property and ownership.
- The Land Code regulates the ownership, possession, rights and affairs of and with respect to land – under the authority of the Ministry of Interior.
- Given that Thailand has relatively strict rules for foreigners (both natural persons and juristic persons) regarding holding/ obtaining the ownership/rights in real estate in Thailand, there is legislation enacted to facilitate and encourage certain types of investment in Thailand which makes available ownership/rights in real estate, for example: Investments Promotion Act 1977 and Petroleum Act 1971.
Real estate sector is one of the leading sectors in Turkey. Not only the houses but also the malls, offices, hotels and industrial constructions are playing a significant role within the growth of the real estate sector. Strategically situated at the crossroads of Europe, the Middle East, and Central Asia, and home to almost 80 million people, Turkey offers great opportunities for real estate developers and investors by combining a large construction sector with growing commercial and industrial output. Since the government was aware of this potential, it encouraged foreign and local investors to invest in real estate and tried to make the life easier for them.
Turkey is in an economic recession for over a year. The real estate sector was one of the most effected sectors from such economic depression. The government has passed a law allowing foreigners to obtain Turkish citizenship by purchase of real property worth US$ 250,000 which turned out to be a supporting tool for the real estate market. The data and financials of the economy seems to be recovering for the last few months. The economic crisis comes with opportunities. It would not be wrong to say that the Turkish real estate market offers very profitable and relatively cheap opportunities for foreigners due to the increased foreign currency rates against Turkish Lira. Government also supports low income housing and it is still expected the real estate sector in Turkey to grow in the next years and increasingly keep being an attraction centre for foreigners all around the world.
The United Kingdom of Great Britain and Northern Ireland (commonly described as the "UK") comprises the kingdoms of England, Wales, Scotland and Northern Ireland. England and Wales share the same real estate law and registrations system. Scotland and Northern Ireland have their own real estate law and registrations systems. There are also differences between residential and commercial land law in each jurisdiction. Our answers to the questions in this Guide are limited to the English and Welsh system.
English and Welsh real estate law is a patchwork of:
- practical legislation governing, for example, the registration of real estate at the English and Welsh Land Registry;
- legislation aimed at addressing perceived market abuses and other political or social issues of the day;
- medieval concepts of tenure; and
- complex and often very old case law (i.e. court decisions).
Despite attempts to modernise and consolidate the law, English and Welsh real estate law remains full of seemingly anachronistic rules and many traps for the unwary.
In the last 20 years there has been a governmental drive to ensure that ownership of most of the land and other estate interests (e.g. leases and mortgages) in the UK are registered on a publicly available governmental register. More than 80% of land in England and Wales is now registered at the English and Welsh Land Registry.
The historic nature of much of English and Welsh real estate law means that relatively little of the legislation (outside of planning, environmental and health and safety etc.) derives out of or from European legislation and therefore the legal impact of Brexit is likely to be limited.
- The U.S. Constitution sets forth a system of federalism where governmental power is divided between the national (or federal) government and the governments of individual states. Each state also has its own constitution, which further divides governmental power between the state and local governments. For this reason, legislation affecting the acquisition, disposition, use, financing, and taxation of real estate can be found at each of the national, state, and local levels of government.
- Each state in the U.S., other than Louisiana (which employs a civil law system), follows a common law regime which evolves through both case law (e.g., court decisions) and legislation, and laws can vary greatly from state to state. In following the common law tradition, U.S. courts generally allow parties engaging in transactions relating to commercial real estate the freedom to set the terms of those transactions by contract, subject to regulations relating to the public interest (e.g., environmental, tax, counter-terrorism).
Over the past decade, the real estate sector in Indonesia has shown strong progress due to various factors, including the expanding middle class and national economic growth. International investments in the real estate sector cover the office, retail, residential, industrial and logistics sectors. While some of these sectors are currently oversupplied, the longer-term attractiveness of the Indonesian real estate market remains compelling.
Recently, the real estate sector has seen growing penetration by technology sector players and technology-based innovations. This has led to the following key developments in Indonesia’s real estate sector:
- Co-working and collaborative environments
One recent trend in the Indonesian real estate sector has been business expansion by players in the collaborative environment sector. Co-working companies continued to expand their presence in Jakarta in 2019, purchasing several properties in Jakarta’s central business district.
While co-working spaces are already abundant in Jakarta, shared workplaces are also being introduced in other places, including Jogjakarta, Bali and Medan, among others. Co-working companies include both foreign-funded and local players.
- Co-living spaces
Co-living spaces are also cropping up in Jakarta and other large cities, including Bandung, Surabaya and Makassar. With the rising prices of apartment units, these types of properties are expected to make housing more attractive for increasing numbers of younger middle-class Indonesians who want to live in cities but need more affordable homes.
- Property crowd funding
Technology-based investments are introducing novel ways of investing in the real estate sector in Indonesia. One such method involves the crowd funding of commercial real estate. This type of investment typically allows investors to own a contractual interest in relation to a commercial real estate based on a contractual arrangement with the owner of such real estate (eg, debt or quasi-equity instruments). In some cases, it functions similarly to Real Estate collective investment contract (CIC). However, unlike a Real Estate CIC, property crowd funding has not been formally regulated in Indonesia and typically has a lower barrier to entry and allows individuals to invest in smaller real estate developments.
To support the overall investment climate, the Indonesian government has invested heavily in large infrastructure projects both within and outside Jakarta. The Jakarta MRT began operating in April 2019 and is intended to provide more convenient access to central Jakarta, which is seen as highly attractive to investors.
The right of ownership is primarily established and protected by the constitution of the Kingdom of Morocco and the Dahir dated 12 August 1913 forming the Obligations and Contracts Code.
The transfers of commercial real estate properties, the registration of securities and easements against them and their lettings are strictly regulated in Morocco.
However, the variety of legal regimes governing lands, co-existence of unregistered and registered property together with land use policy fragmented between local, national and traditional sources of law, with a variety of texts, legislation and customs leads to a complex regime as regards ownership and transfer rights.