legal counsel in european real estate conveyances: brokers and notaries ola jingryd, jur. dr. malmö...

Legal Counsel in European Real Estate Conveyances: Brokers and Notaries

Ola Jingryd, Jur. dr.Malmö University

BackgroundThree legal families in the EU

◦ Civil law, common law, Scandinavia

Three/four Basic Models for Conveyances

Two key players◦ The Swedish broker and the Latin notary

General observation

The Swedish broker and the Latin notary seem to perform, in great part, the same functions in real estate conveyances, and to have similar duties.

Licentiate thesis (2008)

Compared the Swedish broker and the Latin notary with respect to:◦ Relation towards buyer and seller◦ Tasks and duties performed

Swedish law compared to nine notary countries:◦ Argentina, Belgium, Brazil, France,

Germany, Mexico, Portugal, Puerto Rico, and Spain

Licentiate thesis, findings

Duty of impartiality

Counseling role

Contract-engineering

Plans for step 2

Law-and-economics analyis◦Transaction costs◦Market failures

Empirical studies difficult to effectuate

Doctoral thesis

Compare duty to counsel

Legal study, not ”empirical” study

Sweden and France

Swedish Conveyance Process

No formalities except written contract signed by the parties◦4:1-3 of the Land Code (1970:994)

Traditionally two deeds◦Contract◦Bill of sale – on day of possession

Title registration at Land Registry◦Declaratory only

Swedish Conveyance Process

No professional intervention required

In practice, however:

◦More than 90 % of all conveyances are accomplished through brokers

French conveyance processPre-contract – avant contrat

◦Binding between buyer & seller, not to third parties

◦Different kinds: compromis de vente, promesse de vente, etc.

Sales deed – acte de vente◦ Acte authentique – notarized◦Binding to third parties, enforceable

Title registration declaratory

Duty to counsel – Swedish broker

Legal basis:

◦Estate Agents Act (2011:666), esp. 8, 16, 21 §§

◦Case law from civil and administrative courts as well as the Estate Agents Inspectorate

Duty to counsel – Swedish brokerDuty to verify

◦Right of disposal, encumbrances, joint facilities

◦Not zoning & planning! ◦Complemented by duty to

investigateDuty to disclose information

◦Concerning the property and other relevant factors connected to the transaction

Duty to counsel – Swedish brokerDuty to advise

◦Matters of import to the transation◦Legal, financial, technical

Contract-engineering◦Tailor the deeds to the needs of the

transaction at hand◦Intertwined with duty to advise

Duty to counsel – French notary

Legal basis:

◦Art. 1382 of the Code Civil

◦Extensive case law from the Cour de cassation

Duty to counsel – French notary

Duty to verify◦Including zoning & planning!

Duty to disclose information

Duty to advise

Contract-engineering

Implications, future researchEconomic effiency

Institutional robustness◦Does it work?◦Can it work◦ Incentives!

Part of housing market ◦Self-owned homes large portion of total

market◦Access to housing on fair terms