What common rights, interests and burdens can be created or attach over real estate and how are these protected?
Various rights, interests and burdens can be created or attached to real estate by agreement or by operation of law. Creation and removal of these rights is generally straightforward. Rights created by agreement to own or use property include: leasehold and superficies – right to use a third party’s property in exchange for the payment of rents; easements – rights to use a third party’s land for the benefit of the easement holder’s own property, such as a right to pass through the adjacent land to go to public road; and options to purchase property.
Security interests created by agreement include mortgages securing debt obligations and pledges of real estate properties securing debt obligations. Security interests created by operation of law include liens securing fees arising from construction of the property and retention rights, such as a construction company having a retention right over the building it constructed to secure payment of its fees.
Registration of rights created by agreement listed above is not required for such rights to be enforceable against the grantor, but registration is required in order to ensure such rights and interests are enforceable against a subsequent bona fide purchaser.
Registration of estimated construction fees prior to commencement of construction must be made to secure the effect of liens securing fees arising from construction of properties. No registration is required for retention rights.
Easements, rights of way, rights of use of water, rights of sight and others can and should be registered and against the real estate. Mortgages and pledges are also registered against the real estate. If not cancelled all these charges and encumbrances follow the real estate when it is sold.
Common rights, interests and burdens which can be created over real estate in Ireland include:
- Easements (such as rights of way, light, support and water)
- Positive Covenants (such as repair and maintenance obligations)
- Restrictive Covenants (such as restricting use/ development)
- Sporting Rights and Fishing Rights
- Rights of Residence
Most rights, interests and burdens are capable of protection by registration. Others are deemed to affect without registration and specific enquiries must be made about these e.g. leases not exceeding 21 years.
Under Mexican civil law, there are specific forms of servitudes that can be created over real state, such as access and water easements and real covenants. Also, few States recognize the right to create view easements over real property under certain conditions. In some cases, servitudes must be constituted by operation of law; for instance, in case the land has no access to a public road, the law gives the owner the right to demand before the court the creation of an access easement.
Easements must be recorded with the Public Registry to be effective as against third parties. Easements are in rem rights and as such are usually transferred with any conveyance of land.
Common burdens on real estate are easements, qualitative obligations and perpetual clauses.
An easement is a right in rem, established on a cadastral parcel as servient land and in favour of (the owner of) the dominant land. A servitude can include an obligation to tolerate or to refrain from acting (dulden of niet doen) regarding factual acts.
A qualitative obligation is an obligation ensuing from an agreement with regard to real estate, automatically transferring to the legal successor of the owner of such real estate (in other words: the qualitative obligation is an obligation with effect on property rights). A qualitative obligation contains an obligation for an owner of real estate (or party entitled to a right in rem) to tolerate or to refrain from acting (dulden of niet doen) regarding legal acts, and cannot include the obligation to act.
A perpetual clause is a clause stipulating that the owner of real estate imposes certain obligations on its legal successors in title, without effect on property rights. The obligations may concern obligations to act, refrain from acting or to tolerate legal and/or factual acts. However, in practice perpetual clauses in notarial deeds are imposed on the legal successor of an owner in successive notarial deeds (for example deeds of transfer), unless the party in favour of which the perpetual clause was agreed upon confirms that the perpetual clause is not applicable any longer and does not need to be imposed on legal successors of the owner.
In addition to encumbrances, it is possible to establish a variety of rights, interests or burdens over real estate. Such easements can be registered in the Norwegian land register in order for the holder of the right to obtain protection against third party interests. According to the Norwegian Land Registration Act, it is only possible to register a document to create, modify, assign, pledge, acknowledge or terminate a right subject to a real estate. A claim towards a person or a company may not be registered on a property owned by the person or the company, since the claim in such case will not be subject to the property itself.
Common easements are right of way, parking rights, right to place and maintenance sewer pipes, restrictions on construction heights, size or type, right to use natural resources, right of first refusal and restrictions on certain types of use. It is also possible to register judgments regarding the property.
Usage rights, mortgages, easements and interdictions to sell/encumber are the main contractual burdens that can be created over real estate. Other legal servitudes may be established as per the applicable legislation. Creditors and competent authorities may, in certain situations, sequester real estate assets.
Enforcement of such encumbrances is obtained in front of the competent courts or directly through a court enforcement officer, depending on the nature of the encumbrance.
In addition to leases, the following rights and interests may be created:
- Easements – right of way. Easements may be used to lay pipelines, power lines, etc. over land belonging to other owners. Easements are subject to recording in the Realty Register.
- Right of use of public lands - granted by a simplified procedure to lay linear facilities.
- Reservation for public needs – this is a sort of public notice to the land owner that its land may be withdrawn for public needs. Reservation does not always result in withdrawal, as reservations normally cover much greater areas than are actually required and withdrawn. Reservation is a temporary limitation, normally established for a term of 7 years.
Russian law does not recognise “construction rights” or “rights of light” as an interest attachment over land. These needs are covered by other regulatory instruments: a building permit granted to a developer, spatial planning documents, sanitary requirements and legal actions known as actio negatoria.
Leases may be granted orally or in writing under Swedish law (written contracts are of course to be recommended, oral leases are very unusual). A lease constitutes an exclusive right granted in return for payment for the use of a house or part of a house. According to case law, the latter requirement implies that the object of a lease agreement must be a confined space with walls and ceiling in order for the agreement to constitute a lease under Swedish law. As mentioned, Swedish lease law is extensively regulated under statute and is essentially mandatory to the benefit of the tenant. Please see Q15 for a more elaborate description of commercial leases in Sweden.
Another right of use to real property is land leasehold (Sw: arrende). A land leasehold is a right to use land for a specific purpose, e.g. residential, agricultural or commercial, against a fee. Land leaseholds may be granted indefinitely or for a fixed term, but will be valid for a maximum of 25 or 50 years (depending on the existence of a development plan for the leased land).
Easements (Sw: servitut) may be created on a property following a written agreement between two (or more) property owners (or, if applicable, site leaseholders) or through cadastral procedure. An easement grants one property (the dominant property) a specific right to use a part of another property (the serving property) for a specifically defined purpose, such as for passing through, sewage and water facilities, fire evacuation purposes etc. Agreements on easements must comply with certain formal criteria and may only be created in order to satisfy a long-term, sustainable need for the dominant property. An easement can be registered in the land register in order to ensure the survival of the easement when title is transferred.
Joint facilities (Sw. gemensamhetsanläggning) constitute a form of joint ownership and/or use of property related facilities such as e.g. roads, sewage facilities, power stations, a parking garage etc. Joint facilities are created by cadastral procedure, granting each of the properties participating in the facility arrangement a right to use the facility in question, as well as an obligation to carry a share of the total construction and operational costs related to the joint facility. A property’s share in a joint facility is appurtenant to the property and automatically follows the transfer of the property.
Common rights, interests and burdens, such as easements, construction rights, rights of light, rights of way or pipe routes, may be created over real estate, either in favour of a neighbouring plot or in favour of any individual or legal entity. Such rights may only be created by way of public deed executed in front of a notary and must be registered at the land registry. The sole exceptions are public law rights which may be valid without being registered at the land registry.
Annotations, rights in rem and declarations which are determined by laws can be registered in land registry. The main rights in rem are described under Q4.
It is possible to annotate some of the personal rights, limiting right of disposition. These annotations could be established for a definite time. Some of these are briefly explained below.
The contractual pre-purchase right gives its holder the right to file a case for the transfer of the real estate, in case the real estate is sold to a third party.
The right of purchase is the right which gives its holder the right to purchase the real estate with an ex-parte statement.
Contractual right of repurchase annotation provides to its holder the right to buy the real state which is sold previously by itself to the seller.
Family home annotation limits disposal rights of the owner and he/she cannot transfer the real estate to the third party without a prior consent of his/her spouse.
Lease annotation ensures that the new owner cannot ask the tenant to evict the real estate based on the transfer of the real estate which is explained under Q11.
The preliminary contract for sale annotation prevents the transactions of selling, seizure, mortgaging etc. for five years after the date of annotation.
The matters to be declared are determined in the Land Registry Regulation, but there are also regulations in the Law of Property Ownership, Cadastral Law and other laws. For example if the real estate is a historical building, this information is to be found at the declaration column.
Eeasement is an in rem right, provided for in the Brazilian legislation, which is established on a real property owned by a third party (servient property) to the benefit of another third party (dominant property). An easement cannot be constituted by presumption, but rather by an express statement of the owners (by way of a public deed), legal order or by will, and a subsequent registration in the applicable real estate record with the competent Real Estate Registry Office.
Regarding the passage of cables and pipes, the real property’s owner is obliged to tolerate the passage, through its property, of cables, pipes and other underground conduits of public utility services, for the benefit of the neighboring owners, which otherwise would be either impossible or excessively expensive.
Regarding the passage of water, the owner of the lower building is obliged to receive the water that naturally flows from the higher building, and works to avoid its flow are forbidden.
Furthermore, the legislation provides right-of-way, case in which the owner of the building, who has no access to a public thoroughfare, for instance, may, upon payment of an indemnity, require the neighbor to give him passage and route will be established in court, if necessary.
The owner of the real property is assured the right to build, provided that the right of the neighbors and administrative regulations are complied with. The neighboring rules and building restrictions must be observed (e.g., the minimum distance between the buildings).
A wide variety of rights, interests and burdens can be created or attached to real estate, but given the historical nature of real estate law in the U.S. and the adoption of certain vestiges of the arcane laws of England, there are a large number of complex rules that govern them, which can create somewhat arbitrary distinctions around exactly when certain rights, interests or burdens will attach and "run" with the land. Some of the key interests are:
easements: for example, rights of way over a property;
restrictive covenants: for example, an agreement not to build more than one house on a plot of land;
mortgages securing debt obligations; and
options to purchase, and other rights to purchase, such as rights of first refusal and rights of first offer.
While recording of the foregoing documents is not required in order for the applicable document to be enforceable against the grantor, all of the above rights and interests must be recorded in the real estate records in order to ensure that such rights and interests are not subordinated to subsequent bona fide purchasers for value who record their interest.
A wide variety of rights, interests and burdens can be created or attached to real estate, but given the historical nature of real estate law in England and Wales, there are a large number of complex rules that govern them, which can create somewhat arbitrary distinctions around exactly when certain rights, interests or burdens will attach and "run" with the land. Some of the key interests are:
- Easements: for example, rights of way over a property;
- Restrictive covenants: for example, an agreement not to build more than one house on a plot of land;
- Legal mortgages; and
- Options to purchase.
All of the above rights and interests must be registered at the Land Register in order to be protected. However, as mentioned at Q8 above, there is a further class of interests called overriding interests which do not require registration. Legislation has sought to gradually reduce the list of overriding interests but they still include certain important interests such as short leases (i.e. of less than seven years), certain interests of people in actual occupation of the property and certain easements.
As an example of some of the complexities that can arise, positive covenants (e.g. to pay a sum of money towards the repair of a shared access way) do not attach to the land (although positive covenants between a landlord and tenant do attach to the land). However, there are various devices used to ensure that future owners are liable to perform these types of covenants, for example, the owner of the shared access may register a restriction at the Land Registry on the adjoining property prohibiting the sale of the property unless the new owner agrees to comply with the positive covenants.
The main types of in rem rights over land are: ownership (sole ownership, co-ownership and condominium ownership); the right to build; easements and the in rem right to use.
The right to build grants the right to erect a building on a third-party property. The building right is a transferrable right which may be limited by term. Its beneficiary has to construct the building within 5 years as of signing the contact with which it has been established (or as of acquiring the necessary access to build), otherwise the right to build shall be extinguished.
The in rem right to use the property includes the right to use the property in accordance with its purpose and the right to the benefits thereof without causing any essential changes to it. The user cannot transfer his right. The user must pay the expenses related to the use, including taxes and other charges, maintain the property in the state in which it was received, and return the property to the owner after the termination of the right of use.
The easement (servitude) is an in rem right set up in favour of an owner of a property, with respect to another person’s property. Easements frequently arise among owners of adjoining parcels of land, when one land cannot be effectively used unless its owner has a form of limited in rem right over the adjoining land. Traditionally, easement rights provide for the right to trespass, rights of way and rights related to infrastructure facilities. Easements rights are established voluntarily by contract or when specifically provided for in the law (for example in Electricity Act; Waters Act etc., with an administrative act).
All in rem rights are created on the basis of a notary deed or another title document, envisaged in the law and entered in the Land register with the Register Agency. Mandatory easement rights (upon prescription by the law) besides a notary deed may be established by an administrative order from the competent administrative body.
Leases are contractual rights and are created in contracts, which do not need to be notarized. There is no limitation as to the duration of commercial lease contracts (unlike in the case of non-commercial leases, where the time limit is 10 years). The terms and conditions of real estate lease contracts if entered into the Land register are obligatory for any subsequent acquirer of the land.
A form of burden over a property is the mortgage, which is created with a notary deed for an initial period of 10 years, subject to entry into the Land register. The mortgage gives a form of privilege to its beneficiary to receive the amount of the debt from the price of the property, with priority before other creditors respecting the order of the registered mortgages.
Another form of security is the registered pledge with subject - an immovable property of the debtor (as a part of enterprise of the entity). The contract for the registered pledge must be entered into the Special register for registered pledges. The creditor, who is a beneficiary of the registered pledge, is entitled to receive with priority the price of the pledged asset or the compensation for it. The established pledge shall be opposable to third persons from the moment of its registration. Enforcement proceedings include a simplified out-of-court procedure for sale the property.
As an interim measure the creditor may seek to impose an attachment over the immovable property of the debtor. For this purpose the creditor must obtain a preservation order from the court enter the measure into the Land register. The attachment prevents the owner of the property from lawfully disposing of it and entitles the creditor to receive amount of the debt form the price collected from the public sale of the property even if the property has been subsequently (after registration of the attachment in the Land register) transferred to a third person, who is not initially liable for the obligations of the debtor.
Bulgarian law regulates several claims aimed at protecting property rights and interests against infringements. The rightful owner, who does not hold possession over the property, may seek protection from the court against any third person, who is in possession of the property. The owner may request termination of any act of any third person creating obstacles for exercising of his/her/its right without lawful grounds. Further, any person, who has been in possession of the property for at least 6 months, may seek judicial protection against third parties infringing his/her rights. The publicity of the Land register and the mandatory registration also ensure protection against actions and transfers done in bad faith.
Various easements (servitudes) may be legally imposed by the situation of the asset either as a result of (i) the common rules applicable to all real estate properties in order to protect the owner of the contiguous land (e.g. right of way for landlocked properties), (ii) public orders endorsed to the benefit of the collectivity (servitudes d’utilité publique) (e.g. passage of the electricity), as a matter of zooning regulation (construction constraints), or (iii) due to the risks applicable to the specific area where the property is located (e.g. material constraints for buildings located within the danger zone of an industrial facility).
Property owners may also agree to create and attach specific burdens to their property to the benefit of the contiguous plots of land or ‘volumes’ by way of a contractual agreement -e.g. right of view), in which case a specific deed shall be drafted by a notary and recorded to the Land Registry in order to become binding upon any future purchaser of the property. Same will apply to any interest or lien (e.g. mortgages) pertaining to a real estate property so that it can become binding upon third parties.
A wide variety of rights, interests and burdens can be created over or attached to real estate and there are complex rules governing the creation of such rights, which are registered as rights in rem on the property. Such rights may generally only be deleted by the person who has created them, which sometimes causes some issues, in particular with respect to ancient registrations. Some of the key interests are:
- Easements: for example, rights of way over a property, tenancy easements;
- Restrictive covenants: for example, an agreement to build a certain property on a plot of land, not lease the property to certain parties etc.;
- Land charges/mortgages;
- Options to purchase, priority notices, pre-emption rights;
- Usufruct rights;
- Rights of permanent use, condominium rights;
- Heritable building rights (forming its own sub-register, the heritable building rights register).
All of the above rights and interests must be registered in the Land Register in order to be protected and, generally, their rank follows the timing of registration. In case of bank mortgages, the banks will insist to either receive a certain rank for their mortgage or to make sure that pre-ranking easements are immaterial or comply with mortgage bond rules (VDP Standard) as applicable.
Property interests include:
- Regular leaseholds;
- Legal charge over land i.e. mortgage interest;
- Equitable interest in the form of being the beneficiary of a trust, whether such a trust was intentionally created by a settlor, or arises by operation of the law in the form of a resulting or constructive trust; and
These rights are created by registering the relevant instruments at the Land Registry. Such registration operates as deemed notice to any third party. Unregistrable interests (i.e. interests that are simply not capable of being registered), such as trusts that arise by operation of the law or leases for a term of less than 3 years, are protected by common law rules.
A wide variety of rights, interests and burdens can be created or attached to real estate. Some of the key interests are:
- Easements: An easement is a charge over a real estate asset, which limits in a certain way such asset for the benefit of another asset or person. Easements are rights that run with the land.
Easements can be created by law or contractually. Examples of easements imposed by law are: the limitation by which the owner of a building is prohibited from installing windows, balconies or similar constructions that would face directly onto an adjacent plot unless there is a minimum distance between them, and the restriction which only permits the installation of windows or openings in a wall adjacent to another building at roof-level height in order to receive light. It should be noted that the majority of legal easements do not need to be created by any particular act and therefore may not be revealed by a title search at the Land Registry. Contractual easements can be of many types and content (of access, of well, sewage, etc.); they should be formalised by means of a notarial deed executed before a Notary and registered at the Land Registry.
- Mortgages: This is the most common type of guarantee, used as assurance of payment of all types of loans or credit lines connected to the purchase and/or development of real estate. Please see Q. 19 for a more in-depth explanation about mortgages in Spain.
- Usufructs: Usufructs give a person the temporary right to use and profit from someone else's property. This right may be granted by an inter-vivos or mortis causa act or by law. It may also be obtained by adverse possession. Usufructs are temporary rights granted for a specific period of time. They may be transferred inter-vivos, but the grantee of the usufruct can only transfer his own limited title. Such title may also be transferred mortis causa but limited to the remaining unexpired period of the usufruct in favour of the original grantee.
The beneficiary of a right of usufruct is generally entitled to appropriate the land's profits (e.g. the crops or the rent in leased premises). He may not make alterations to the property, unless specifically authorised. As to repairs, generally, ordinary repairs are the grantee's responsibility and exceptional ones must be carried out by the grantor of the usufruct.
- Options to purchase right: For the option right to be effective vis-à-vis third parties, it should be registered at the Land Registry, which would require the parties to execute a notarial deed specifying both the purchase price as well as the period in which the option has to be exercised, which may not be longer than four years. Should the purchase option be recorded, and the grantor sells the property to a third party other than the opting party, the latter may exercise its right vis-à-vis the new owner, whereas if it were not recorded, the opting party may claim liability from the grantor of the option.
Please describe common rights, interests and burdens that can be created or attached over real estate, e.g. easements, construction rights, rights of light, how such rights are created and how they can be protected e.g. can they be registered against real estate.
Common rights, interests and burdens such as easements and cautions can be created over real estate in Nigeria but they are not mandatorily required to be registered at the Lands Registry. For example, easements are not required to be registered because they do not confer possessory interests on the grantee. A caution, on the other hand, is registrable upon an application to the relevant Lands Registry.