European Property Rights and Wrongs - Diana Wallis MEP

• The Brussels I Regulation No.44/2001 deals with the recognition and enforcement
of judgements including notarial acts which are common in real estate
transactions in many Member States.
• The right to free movement of capital protects cross-border mortgages and
the right to foreign currency loans.
• Various directives affecting contract law, such as unfair terms, doorstep selling
and consumer credit all affect real estate transactions.
• The progress towards a common frame of reference for European contract
law will also have an impact.
Problems from Conflicts of Laws
Many problems can arise in relation to real property across borders.
• State A may require a contract to be made in front of a notary. Will a contract
validly made in State B not in front of notary be valid in State A?
• If all the parties to the contract are in State B, but the property is in State A,
is it really necessary for all the parties to travel to State A in order to effect a
transfer of the property?
• If there is a dispute, must they conduct the court action in State A or State B?
• The law applying to the contract may be different to the law applying to the
transfer of the title to the real property.
• If the buyer is also obtaining a mortgage in State B, this will add further complication
and expense. Do any protections given to borrowers in State B also
apply in State A or the other way round? If the borrower does not pay, can
the lender take legal action in both State A and State B?
Future Developments to Provide More Certainty
Some work has already been done. The European University Institute project on
Real Property Law and Procedure in the EU finalised in 2008, collated reports
from 16 member states and considered the issues of real estate transactions,
contracts and mortgages.
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