A Cadastral Decree effective of January 1, 2020 was adopted to assist heirs possessing a European Certificate of Succession. Unfortunately, it fails to remedy existing inconsistency with the EU law. Our actions taken to achieve registration of heirs in Cadastral register have been successful at courts.
Two actions concerning EDO that our law offices filed with the courts have been currently upheld by the High Court in Olomouc on November 28, 2019 and January 8, 2020 respectively. We also succeeded to win court proceedings at City Court in Prague on January 21, 2020 (please refer to our previous article: The fight for European Certificates of Succession continues in Olomouc and Luxembourg„) In these cases, at least, the ownership title of the heirs will be entered in the cadastral register based on an ECS even without a separate specification of assets.
But the judgments are not unambiguous, and the courts decided against referring any of the prepared questions to the CJEU for a preliminary ruling.
Amendment stays halfway
The situation regarding ECS in the Czech Republic has taken a new turn as of 1 January 2020, due to the amendment to Cadastral Decree No. 301/2019 Coll. Going forward, if the cadastral office does not find the ECS sufficient (e.g. ECS proves passage of title to heir but fails to list assets falling into heritage), the heirs may submit in addition to ESC a declaration of honor specifying the inherited property. Based on this their title to land or plots will be registered in the Cadastral register.
The language of newly inserted para. (6) in Sec. 69 is reproduced at the end of this article.
The amendment therefore means, if an ECS is found insufficient by the Cadastral Office, the heirs could always simply declare that they are indeed the beneficiaries of the inheritance, and authoritatively state from whom their inherited the property. This is rather reminiscent of Baron Munchhausen, the fabled German nobleman of yesteryear who supposedly launched himself from a swamp by pulling on his own hair. In this case, though, the swamp was cooked up by the cadastral offices, who for many years practiced a studied ignorance of the priority of the ECS.
According to the amendment, the ownership title of heirs who „only” avail of an ECS as proof which does not contain a specific breakdown of the real property (i.e., for instance, an ECS issued in Bavaria or Thuringia) will be entered in the Cadastral register if the heirs submit, along with the ECS itself, a declaration with following particulars:
- designation of the person who effects the declaration and who is entitled to the right of ownership (heir);
- designation of the person whose right has expired (testator);
- designation of the real estate in accordance with the Cadastral Act;
- designation of the right that has arisen (right of ownership);
- stating the legal fact that led to the creation of the right (inheritance)
All this must be officially signed.
The contradiction of the amendment to Regulation 650/2012/EU (the „Regulation”) is obvious: the Regulation introduced the ECS in the first place so as to alleviate the situation of heirs across the EU whose inheritance proceeding takes place in a country different from the one in which the inherited assets are located, by doing away with the need for any other documentation.
It is intended that the ECS be binding in all member states without any requirements, and that it trigger the same consequences as a domestic inheritance proceeding. The Regulation gave the ECS precedence and direct effect. If each state would introduce additional declarations alongside the ECS, Regulation No. 650/2012 would no longer make any sense.
The cadastral decree now forces heirs to present a declaration along with the ECS which domestic heirs don’t have to present. It may seem a banal requirement at first glance, but it will in fact cause headaches for heirs to obtain this document. In the overwhelming majority of cases, the heirs will be resident in other EU member states (residency in the Czech Republic will be rare). The signature on the declaration requires official certification. Unless the heirs travel to the Czech Republic (or visit an embassy or general or honorary consulate) to sign before a Czech official, the declaration will in most countries have to be furnished with an additional clause, known as the apostille.
Moreover, since the declaration must be drawn up in Czech, it will also have to be accompanied by an official translation (because foreign notaries public are loath to certify signatures on deeds in a foreign language). Most foreign heirs will have to pay not only for the certification of their signature, the apostille on top, and the court-sworn translation, but likely also an attorney who draws up the declaration for them – for they do not know what the declaration should look like. The whole procedure will take several weeks if not months – and it won’t be cheap.
The amendment of the cadastral decree only applies to motions for entry of title filed on or after 1 January 2020. All motions that were previously filed will be treated as before – which is to say, they will in all likelihood be rejected. The problem was not solved. What is more, the Cadastral Decree is in our legal view now in conflict with the Cadastral Act, which in Sec. 8 and Sec. 17 enshrines the principle that the registration certificate must include a specification of the real estate. It still says so – because it was not amended accordingly. We trust that it is up to the European Court of Justice to rule on the admissibility of these newly introduced declarations.
Yet another substantial inequality which affects foreign heirs remains unresolved by amendment 301/2019 Coll.: the administrative fee for the proceeding on the entry of title (which as of 1 January 2020 is no less than CZK 2,000, i.e., approx. EUR 80).
Heirs who prove their title to a given real property based on a Czech inheritance proceeding do not have to pay this fee. Similarly, heirs who apply for the transfer of title in the official record based on an ECS, will pay no fee in Germany (and other EU member states). We requested that this issue be referred to the CJEU.
Referral of questions to the CJEU
As noted above, we prevailed as the appellant in two proceedings before the Olomouc High Court (AZ: 5 Co 34/2019 and 1 Co 38/2019). The court found that the German courts had been at fault when they did not enter the specification of assets in the ECS. It accommodated the appeals nonetheless, on grounds of the finding that the practice of Czech authorities had denied the heirs their fundamental right to property and inheritance by preventing them from exercising their title.
In yet another proceeding of ours (over the same ECS), the Prague Municipal Court had already prepared a referral of questions to the CJEU pursuant to Art. 267 TFEU. However, in a startling change of course, it has on 21 January 2020 ruled that a referral to the CJEU was no longer necessary, given the above-mentioned Cadastral Decree and it ruled in favor of our court action.
The Prague Municipal Court has not explained how the amendment, which came into force on 1 January 2020, is at all pertinent to a litigation which was commenced in 2018. Neither has the court requested a declaration that can be submitted from 1.1.2020.
In future issues of this Journal, you will find our report on the litigation that is still pending – we are representing parties who filed a number of variants of motions for the entry of title, some of them heirs, some of them parties who acquired the title in good faith from heirs with an ECS or, in some cases, with a notarial deed (which is an admissible alternative under Regulation 650/2012).
The co-author of the article is bnt junior associate Vendula Doležalová.
Code of Civil Proceedings (Act No. 99/1963 Coll.)
Cadastral Act (Act No. 256/2013 Coll.)
Cadastral decree No. 357/2013 Coll., as amended by decree No. 301/2019 Coll.:
„(6) If the deed which was issued on terms set out by a directly applicable provision of EU law and which proves universal legal succession does not specify what rights or real property are the subject matter of said legal succession, due to the fact that such specification is not possible under the laws of the country in which the deed was issued, the cadastral office shall enter the change of the ownership title or other right in rem based on the said deed and based on a declaration by the legal successor, which must satisfy the requirements in terms of mandatory content as per Sec. 66 (4) (a) through (d) and (f).”