Legal status of a property

Legal status of a property – lang and mortgage register, how to verify your property before buying?

What is a legal status of a property?

As a legal property status, we understand status that is representing the material and legal properties of property. In other words, this is the actual or real state of a property. Buying a property is a big expense for most of the households. Well prepared documentation that is the basis for buying the property and their factual verification translate to legally secure and economically sound transaction.

 

What to do in order to verify the legal status of a property?

Before buying a property you should focus on minimizing the risks that may be connected to any legal or factual defects. In order to do that you should:

    • verify the construction company selling the property,
    • check the legal status of the property in land and mortgage register,
    • consult with a lawyer the contract that is the basis of the sales agreement that transfers the property ownership,
    • in case that you are buying from a private person, not a company you should verify if they have the legal title to sell the property and that this person is the only owner of it,
    • make sure that there is no mortgage on the property,
    • verify the middleman that is involved in the transaction,
    • make sure that there are no other liabilities on the property that might not be disclosed by the seller,

As a rule, all of the rights and liabilities connected to a property are always disclosed in land and mortgage register which are public. Land and mortgage register guarantees the warranty of public faith. This means that you can use this in case that someone claims that not knowing certain information would affect their legal decisions. Such objections would be claimed invalid and insufficient. This is explicitly declared in the Land register and mortgage act from the 1982 year.

 

Regulations about land and mortgage registers.

Article. 1.

  1. Land and mortgage registers are maintained in order to establish the legal status of the real estate.
  2. The land and mortgage register is created and maintained for real estate.
  3. Land and mortgage registers may also be kept in order to establish the legal status of a cooperative ownership right to a flat.

 

Article. 2.

Land registers are made public. You cannot use the fact that you did not know any fact that was disclosed in the land register to your benefit.

 

Article. 3.

  1. It is presumed that anything disclosed in the land registers is correct and compatible with the actual state of the property.
  2. It is presumed that any fact that was deleted from land register does not exist.

 

Article. 4.

Any claim based on possession of a property against the warranty of public faith is invalid.

 

Article. 5.

In case that there is a discrepancy between the property state disclosed in the public land register and the actual state of the property any dispute is resolved in favor of the person that based on the state in the land register has made any legal actions or obligations (Warranty of public faith).

Examination of a public land register and the legal state of the property.

Stan prawny nieruchomośći - księgi wieczysteThe land register allows you to identify a property based on a number. As it is pointed out in the act this does not only concern the land but also flats and cooperative property rights which in a certain sense is part of the building that is disclosed in a land register.

Getting any information about the land register can be done with the use of electronic land register access system under this URL ekw.ms.gov.pl/eukw_ogol/menu.do

 

On the webpage you can find links allowing you to:

 

If you want to ascertain the legal state of a property with the use of land register?

 

Land and mortgage register

Stan prawny nieruchmości - księgi wieczysteLand and mortgage register print is a legal document that states what is the state of the property. This was previously established in the previous paragraph this document has a legal force. This confirms the legal state of a property for the day of issuing the document. It shows what rights and obligations come with the property. If a certain information was disclosed in the land register the fact of not knowing about this it cannot be used in any legal proceedings. This reassurance is called the warranty of public faith.

Land and mortgage register print is made out of 4 parts. Each one contains information about a different category of facts connected to the property. All of them are quite important when someone is buying a certain property. We will now describe each part of the land and mortgage register print in detail and explain what type of information they contain.

We have previously written an article about it before on our blog – How to verify a lang and mortgage register print?

 

The first part of the land and mortgage register – I

The first part of the land and mortgage register is divided into two parts: “Identification of the property” and “List of right connected to the ownership”. Identification of the property comes from the record of land and buildings and it allows you to precisely ascertain what property is described in the print. A common name for the records of land is “Katastr” which is established by the Act from 17 may 1989 Geodetic and cartographic law (Dz. U. 1989 nr 30 poz. 163).

In the first part of the land and mortgage register print, we get all the information about the location and the boundaries of the property. This includes the city, street, number of the building and number of the flat. This allows you to identify the property with its physical properties.

 

The second part of the land and mortgage register – II

The second part of the land and mortgage register concerns with the ownership right of a certain property. The owner of a property can be a single person or many people at the same time. Additionally, the owner of a property can be a legal entity. This can have much legal implication for the way the property can be bought. We have to verify if based on the land registry information we will become the new owner.

If we buy the property only from one of many owners such act can be defective and legally ineffective. In case that the owner is a legal entity, we have to be sure that the person that signs the agreement is legally capable of representing the entity owning the property and it has the right to sign a contract of selling the property on the behalf of the entity.

In special cases, there are regulation concerning the heirs and people that could possibly own the property if certain legal or factual conditions would arise. This can have serious consequences in the way that the agreement that transfers the ownership of property is formed and could property give rise to a legal claim for third parties against the current and future owners.

 

The third part of the land and mortgage register – III

The third part of the land and mortgage register includes all the rights, liabilities and servitudes that are connected with the property. Very often this part includes all the servitudes. This can be an easement of the necessary path, transmission easement or right of passage easement. There is no information about the mortgage in this part because it moved to the part 4.

This part can include all the information about rights, liabilities, and limitation. They do not always come in a form of servitude or easement. The property and the law connected with is can be subjected to limitations based in contracts that might not be disclosed which severely complicates the legal situation between the previous and new owner and the person that possesses the servitude or easement.

!!! IMPORTANT!!! Based on the act from the 6 July 1982 some of the guarantees provided by the warranty of public faith are not in force. !!!

 

Warranty of public faith of land and mortgage register

Article. 5.

In case that there is a discrepancy between the property state disclosed in the public land register and the actual state of the property any dispute is resolved in favor of the person that based on the state in the land register has made any legal actions or obligations (Warranty of public faith).

 

Article. 6.

  1. Warranty of public faith does not protect in case of any actions that were performed without any remuneration or actions performed by a person in bad faith.
  2. in bad faith is a person that knows that the content of the land and mortgage register print was not compatible with the real state of the property or a person who could easily get to know about its incompatibility.
  3. In case that for an action to take effect there is a condition of registering it in the land and mortgage register the moment of registering it is crucial for ascertaining bad and good faith of the owner. In case that the disposition to take effect needs to be disclosed in the register the day that it was registered is decisive.

 

Article. 7.

Warranty of public faith does not contradict or cancels:

1) rights and liabilities connected with the property based on public acts of law;

2) annuity contract;

3) easement enacted based on an act of public administration;

4) easement of the necessary path or easement created in case of a building outside of the limits of the property;

5) transmission easement.

 

Article. 8.

Warranty of public faith is canceled by any mention of a motion, complaint against the decision of a legal clerk, appeal or cessation of a judgment and warning about the inconsistency of legal state that is disclosed with the real one.

 

Article. 9.

Articles 5-8 can be also used in cases that are not mentioned in article 5.

 

The fourth part of the land and mortgage register – IV – Mortgage

Stan prawny nieruchomości - hipoteka i ustanowienie hipotekiIn the fourth part of the lang and mortgage register, there is information about the mortgage. The mortgage is a right that can be executed as a insurance for any liability. It is separately regulated because it has some grave consequences both legal and factual for the owner of the property. In the worse case, the owner of the property will have to face the personal payment of the liabilities or auction of the property. When we become the owner of the property we do not become liable for the liabilities protected by a mortgage. The property can become an insurance for the liability.

A mortgage can be established willingly by the owner of the property in order to assure the payment of the liability or by a court order. The latter is a case of an involuntary mortgage.

We have previously written about mortgage in one of our articles.

 

The basis for an involuntary mortgage can be:

  • court order granting assurance,
  • a decision of a prosecutor,
  • an administrative decision, in case that specific regulation give basis to such action,
  • order of provision based upon the regulation of administrative execution of debts or in order of provision based upon the regulation of mutual help in tax collection,

 

Establishing a mortgage on a property.

Establishing a mortgage on a property has profound consequences when it comes to realizing it as a security for debt payment. The creditor that owns the mortgage can satisfy his debts as the first one before any other creditor that does not possess the mortgage during the auction of the property. The order of the mortgages established in the land and mortgage register also affects the order of satisfaction between creditors owning a mortgage. In case that the mortgage worth is bigger than the value of the property people that have mortgages on latter places may not be satisfied due to the lack of funds after an auction.

Legal status of real estate determined by means of an extract and an outline from the land and building register.

Sample application form for an extract/outline – download

Extract from the land and building registry

The extract contains information on:

The name of the office which made an extract from the land register available:

The name of the body providing the extract from the land register, in most cases it is the “starosta”, here the official name is used, e.g. Starost Białostocki, ul. Branickiego 13 15-085 Białystok, the following number of the document provided by the “starosta” or mayor of the city with “powiat” rights,

 

Location of the cadastral parcel in a three-tier country division:

  • Voivodeship,
  • County,
  • TERYT cadastral unit (http://eteryt.stat.gov.pl/), (it should be noted that many towns change from year to year, which may affect the content of the document),
  • Precinct area,
  • City,

The number of the land registration unit to which the parcel of land was assigned.

Owner data:

  • share in ownership,
  • type of ownership,
  • first name and last name,
  • the owner’s PESEL number,
  • address data,

Data of the registered parcel containing the entry:

  • a map of a record map,
  • number of the parcel of land,
  • location of the land,
  • description of use,
  • Use class symbol (RVI),
  • area of use and plot area,
  • the number of the land and mortgage register or the designation of a document in the absence of a land and mortgage register,
  • The value of the land in the case if it was determined and the date of establishing this value.

Designation of documents specifying other rights to the plot than ownership and perpetual usufruct.

The number of the register of monuments kept on the basis of regulations on the protection of cultural goods.

Identifier of the statistical region to which the cadastral parcel belongs.

If an extract is obtained in order to establish a land and mortgage register, the “starosta” as the administrative body issuing the extract must be provided with the following clause: “This document is intended for making an entry in the land and mortgage register”

 

Application for issuing an extract from the land and building register.

In order to obtain an extract from the land and buildings register, we submit an application to the “starosta” under which the given property is subject.

 

In the form, we specify all information about our application:

  • name and surname of the applicant or name of the entity that applies for issuing the voucher,
  • address of residence or registered office of the entity requesting the issue,
  • PESEL or REGON,
  • the application mark assigned by the applicant (optional information),
  • contact details of the applicant, such as telephone number or email address,
  • place and date,
  • addressee of the application, name and address of the body or organizational unit which, on behalf of the body, operates a state geodetic and cartographic resource,specification of the discharge, from the register of: land, buildings, premises, and from the file: buildings or premises,
  • specification of the content of the extract:
  • extract from the land register without personal data
  • extract from the land register and an extract from the record map
  • an outline from the record map,
  • data identifying the real estate,
  • demonstration of the legal interest of the applicant in accessing data identifying the owner or owner of the property covered by the application. This element of the entry is very important because not everyone has the right to receive an extract, and some types of extracts must be provided with additional clauses on the part of offices,
  • a person assigned to contacts from the applicant,
  • the form of the documents subject to the application and the method of their transfer, we can apply for a paper and electronic extract,
  • additional explanations and comments from the applicant,

Obtaining an extract from the land registry is very important because it may contain data that does not appear in the land and mortgage register. This has very important legal consequences. Although certain rights and obligations have not been disclosed in the land and mortgage register, they may be binding on the new owner of the real estate and exclude the warranties from the public land and mortgage register in this regard.

 

An outline from the register of lands and buildings

Stan prawny nieruchomości - wyrys z ewidencji gruntów i budynkówIn addition to obtaining a copy, we can also obtain a copy which is a copy of the register map. This copy is usually shown on a 1: 1000 scale. This document contains all the information that is in the database about the plot. Infrastructure and all information regarding spatial data are also shown there.

This document contains information on the registration address and information on the three-tier administrative division of the state, ie the name of the voivodship, poviat, register unit (commune) and registration area. As an official document, it also specifies the entity that is responsible for issuing the given document, the date of issue and is stamped with the state seal giving it legal force.

 

The information provided in the extract from the land and building registry.

The most important part of the outline is, of course, a map that contains information such as:

  • plot boundaries,
  • parcel numbers of plots,
  • ordinal numbers of buildings,
  • building registration numbers,
  • the numbers of the breakpoints of the boundary lines,
  • street names and road markings,
  • location of the plot in relation to other plots,
  • descriptions and contours of the land,
  • including ecological,
  • descriptions and contours of pedology classes,
  • location of buildings stabilized (permanent) border points,

 

Actions and information related to the extract

Due to the fact that the extract is obtained using the same form as the extract, it becomes necessary to provide the reason on which we apply for the issuance of an outline. This may be, for example, a transaction for the sale or purchase of real estate, imposing on third parties the rights of third parties or the necessity to establish a land and mortgage register for new real estate.

The period of validity of an outline from the land and building register. Pursuant to the Act, the extract is valid for a period of 3 months. however, if there have been any changes in the given period, the signed text should be treated as invalid and in order to use it in legal transactions, apply for a new one along with the changes.

 

Fees for an extract from the register of lands and buildings.

Application fees can be very different depending on what land the building is about to land. The fee is collected prior to the drawing up and issuing of an extract from the land register. The amount of rates is specified in the table attached to the Law on Geodetic and Cartographic Law. An electronic form is subject to a fee of PLN 105. However, in paper form (printed) it is 110 PLN. Of course, this should be added to the fee for sending materials.

 

Legal status of a flat on the secondary market.

An apartment from the secondary market.

If you buy a flat on the secondary market, we must check whether the property is not indebted to other entities which may not be shown in the land and mortgage registers. If the flat is part of a residential community. Rental fees, gas, electricity, and other utilities can be problematic for a new owner. If such backlogs exist, we can count on the disconnection of electricity, gas, etc. which will involve the need to explain with media suppliers.

If we buy a flat that is part of a housing cooperative and it is not separated in the form of a separate apartment with a registered land register, we may have problems if we do not settle the responsibility for the liabilities related to the given premises. Usually, in this situation, we suggest obtaining a proper statement from the transferor, which contains information on the fact that the property is free from obligations. There is also a need to obtain information about whether the previous owner paid tax on it.

 

We wrote about it also on our blog – look here – What to check before buying an apartment from the secondary market?

 

Check-In Status

In the case of buying a flat on the secondary market, it is necessary to determine whether a given person is already registered in a given apartment. If you buy a flat with a tenant, it becomes difficult to check out such a person if he / she is under legal protection. Information on this subject can be obtained from the registration department of the commune or city office. Here it becomes important that the city council provides this type of information to persons who own the premises, which results in the obligation to sign an appropriate clause with the seller. It should be remembered that the report is not a basis for owning the property but strengthens the position of the person residing in the case in the event of a dispute. At the same time, for this reason, the new owner has the right to charge the registered guests with charges for the premises and utilities.

 

Property development plan and its legal consequences

Checking the legal status of the property also involves checking the local property development plan. The key element in this matter is to determine the purpose of the given land and neighboring adjacent land. For some reason, the land may not have a zoning plan. It is then necessary to obtain a decision on building conditions in this case.

The legal status of zoning can be considered from a formal and material perspective. From the formal perspective, a development plan is a legal act of local law. It applies only to the area of a given commune. In the material category, however, it is a legal act that together with other regulations shapes the rights and manner of exercising the ownership right to real estate

 

Verification of property’s legal status.

If you are thinking about buying a property or you already own a property and you have some reasonable doubts about its’s legal status please contact our practice. We can help you out in this matter.

 

Legal Acts:

THE ACT dated 6 July 1982 on land and mortgage registers.

ACT of 15 December 2000 on housing co-operatives.

THE ACT of 17 May 1989. Geodetic and cartographic law.

THE ACT dated September 16, 1982. Co-operative law.

THE ACT of 21 June 2001 on the protection of tenants’ rights, the housing stock of a commune and the change Civil Code.

ACT of 21 August 1997 on real estate management.

THE ACT of 24 June 1994 on the ownership of premises.