Acquisition of real property from the non-owner?

Czech Republic: Cadastral records will provide assurance of good title as of 1 January 2015

The new Civil Code has strengthened the mirror principle which applies to entries in the cadastral record, by assuming the accuracy of these entries; this in turn improves the legal position of transferees acquiring real property. However, the effectiveness of the relevant provisions was deferred by one year (so that they will only come into force on 1 January 2015). This gives the owners of real property leeway to ensure that the public record reflects the actual state of affairs. What are the implications of the strengthened mirror principle?

The new Civil Code strengthens the protection of good faith in the accuracy and completeness of the cadastral record. The default assumption is that all titles have been entered in the cadaster in accordance with the actual state of affairs. This is a refutable assumption: a person who is affected by such entry of a (transfer of) title may seek the rectification of errors (i.e., the removal of any entry that does not reflect actual ownership).

To the extent that the situation on the record does not match the actual state of affairs, the new rules favor those who in good faith acquire a right in rem (for consideration) from another person who was ostensibly in a position to transfer the title. In such a case, the transferee should become the rightful owner even if the transferor was themselves not actually the owner of the given real property (in spite of an entry in the public record to the contrary). The new Civil Code only protects transfers for consideration in this manner. Cases of a transfer of real property for no consideration are not affected by the new rules. Also, it remains to be seen how broad the courts’ understanding of the criterion of transferee’s good faith will be. The new Civil Code provides affected persons with means of defense against unlawful entries of title. However, the options for contesting a title, once it is entered in the cadaster, are limited – specifically, they are limited in time. In order to effectively defend one’s title vis-a-vis all persons, the affected person must seek the deletion of the wrong title within one month from the day on which they learned of the fact that such a title was entered.

In this sense, the new rules place higher demands on the owners of real property (and other beneficiaries of a title to real property), insofar as they are forced to regularly check the state of the public record. Having said all that, it remains to be seen what approach the courts will take towards the interpretation of the new provisions in favor of a more stringent mirror principle, and whether the new rules really break away from the doctrine that property titles are always exempt from the statute of limitations.

Source: New Civil Code (Act No. 89/2012 Coll.)

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