Germany must change its practice on issuing the European Certificate of Succession. German probate courts must list the property.
On 9 March 2023, the judgment in Case C-354/21 (R.J.R., Registrų centras) was published and incidentally turns German inheritance law practice on its head.
As the conflict before the ECJ exists in a similar form in other CEE countries (including the Czech Republic, read more here), the ECJ’s decision represents a landmark for European succession law and could finally bring numerous unresolved succession proceedings in Europe to a conclusion.
The case, driven by bnt, involved an inheritance issue under German law where the object of inheritance is a property in Lithuania. The legal basis for this is Regulation No. 650/2012 (Succession Regulation). This Regulation should actually simplify cross-border inheritance cases by having the inheritance proceedings take place in only one Member State. However, German inheritance cases involving real estate located in Lithuania have led to numerous as yet unresolved conflicts.
In the underlying proceedings, the inheritance proceedings were correctly conducted only in Germany because the deceased had his last habitual residence here. Although the estate also included a property located in Lithuania, no second inheritance proceedings could be opened in Lithuania under the Succession Regulation. The Lithuanian property also became part of the German inheritance proceedings. However, according to Art. 1 (2) lit. l) of the Succession Regulation, the entry recording change of ownership has to be made in the Lithuanian land register and under Lithuanian law.
In order for the heir to be able to prove their status to the land registry for this purpose, Article 62 (1) of the Regulation introduced the European Certificate of Succession, which is issued for use in another Member State and has effect in that Member State as proof of succession. However, under Art. 23 (4) of the Law on the Real Estate Register of the Republic of Lithuania, the Lithuanian Land Registry requires that the specific real estate be clearly identified in the certificate. Specifically, it requires details of the address as well as the so-called Unikalus No. (unique number of the property). Without this information, the land registry has so far refused registration.
This was an as yet unresolved conflict between German inheritance law and Lithuanian land register law. The reason is the practice of German probate courts, which (as with the German certificate of inheritance) do not enter the real estate in the European Certificate of Inheritance, but only the inheritance quota (share as a percentage of the deceased’s total assets and debts). Details of the property, as required by Lithuanian land register law, do not form part of this approach. It was not possible to register the change of ownership without specifying the property in the certificate of inheritance.
In the present case, the situation was taken to absurdity, as the heir was the sole heir. Although it was obvious that he inherited 100% of the estate, which logically includes the real estate, the German probate court could not be persuaded to enter the real estate in the probate certificate. The Lithuanian land registry also refused to transfer the property.
The ECJ surprisingly decided, contrary to the Advocate General’s opinion (https://bnt.eu/uncategorized/lithuania-advocate-generals-opinion-in-ecj-case-c-354-21-published/), that the Lithuanian real estate register could rightly refuse to register the change in the property register if the property was not specifically named in the certificate of inheritance.. Lithuania has the right to determine what information it needs for registration. The background to this is that the cadastral rules are not regulated by the Succession Regulation, i.e. they remain within the competence of the Member States. Therefore, the rules can be applied as they are now, e.g., in Lithuania or the Czech Republic: The property must be named.
However, the ECJ once again expressly emphasised that the German probate court was obliged to use Form V of the Implementing Regulation (EU) No. 1329/2014 for the certificate of inheritance, i.e. also to indicate real estate in the certificate of inheritance, as provided for therein (Form V, Annex IV, number 9). German case law had previously considered this to be incompatible with German inheritance law (OLG München, decision of 12.09.2017 – 31 Wx 275/17). The previous refusal by German probate courts to enter real estate in the European Certificate of Succession is contrary to EU law if it is clear that the European Certificate of Succession cannot be effectively invoked in the country of destination without this information.
The ruling could now also lead to the obligation of the German probate court to check whether the asset in question is covered by succession, i.e. belonged to the deceased.
How Germany is to implement this without the probate court itself having access to the Lithuanian land register and without having in-depth knowledge of Lithuanian real estate law was left open by the ECJ.
Source:
ECJ, Judgment of 9 March 2023, R. J. R. v Registrų centras VĮ, C-354/21, ECLI:EU:C:2023:184