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