Zbornik Radova Pravnog Fakulteta u Nišu (Jan 2023)
The principle of trust in Real Estate records and contractual acquisition of property from the registered owner
Abstract
Under the so-called causal tradition system governing the transfer of property, in order to acquire property rights on immovable property under the contractual acquisition rules, the acquirer first has to conclude a legally valid contract with the real estate owner, and then enter the acquired property into the Real Estate Cadastre. The acquisition of the ownership right will not occur in case the registration was made on the basis of an invalid contract or in case the contract has been concluded with a non-owner (which is determined only after the registration). If the acquirer had disposed of the acquired right before the contract was cancelled, the right to acquire ceases to exist for all subsequent acquirers. Nevertheless, due to the legal effect of the principles of trust and security of legal transactions, a conscientious (bona fide) third party remains the owner or the holder of another real estate right (e.g. mortgage) that was acquired from the registered owner who was wrongly or incompletely entered into the real estate register. The principle of trust in real estate records refers to reliance on all legal data that can be established by inspecting the land registry or cadastral records, which are complete and trustworthy. A third party is conscientious (bona fide) acquirer if, in the circumstances governing the conclusion of the contract and the state of affairs in the cadastral records, he/she could not have had any reason to suspect or doubt the accuracy or veracity of data from the public cadastral records. In Serbian legislation and judicial practice, in order to maintain the presumption of conscientiousness (acting in good faith), it is necessary to check whether the person is a registered owner or an unregisted owner. Although such practice may call into question the effect of the principle of trust, the author considers it to be justified because the cadastral records are still not completely accurate. De lege ferenda, the principle of trust should apply to a conscientious (bona fide) acquirer. Conscientiousness entails the examination of the registered owner but, if the circumstances of the case cast any doubt on the accuracy of cadastral records, conscientiousness must also include the examination of the unregistered owner.
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