Key features of real estate transactions

AuthorConsumers, Health, Agriculture and Food Executive Agency (European Commission), Deloitte consortium, IPSOS, London Economics
3. Key features of real estate transactions
In the last decade, in the EU as a whole, the real estate sector grew on average more than
the whole economy both in terms of value added and employment, although the dynamics
of the sector vary from country to country128. Th e real estate services market is c omplex
since it involves the presence of different market agents and several steps are required in
one single real estate transaction. Moreover, distinct pieces of legislation and regulation
concerning real estate transactions differ from country to country.
This section presents, in detail, the functioning of the real estate services market and,
in particular, the process when a consumer wishes to buy, sell, rent or let a property.
Cross-country differences , as well as the potential risks incurr ed by consumers
during real estate transactions, are also presented. Thereafter, the role played by the
real estate agent in this sequence is portrayed. Finally, insight is provided in the
specificities of cross-border transactions.
Box 1: Summary of findings Features of real estate transactions
Although only mandatory in Denmark, in all other Member States it is not uncommon
that consumers request the intermediation of a real estate agent, whereas other
professionals may provide additional support. Information technology and the
internet is increasingly important, particularly in the identification of properties.
For conveyanci ng proc esses, the intervention of legal professionals (notaries,
lawyers, advocates, solicitors, attorneys) in the course of the transaction varies
widely between countries. The amount of information that is expected to be disclosed
is also largely different from one country to another. Risks include fraud, gazumping
or misleading information, and a lack of legal certainty .
In rental exchanges, the main differences among the countries in scope were
regarding the amount of information that can be requested by potential tenants and
that must be disclosed upon contract signature. In some countries, the various pieces
of information are specified by law, however this is not common. Omitted information
in rental exchanges results to be problematic to all parties.
Real estate agents primarily serve the matching function between relevant parties.
Still, the range of services offered varies widely in a pattern that matches the Nordic
or Latin heritage of the countries.
Agents that deal with cross-border transactions in principle provide the same services
as in regular local transactions.
128 European Commission, (2015). “Mutual evaluation of regulated professions. Overview of the regulatory
framework in the real estate sector”. Available at:
3.1 The stages of real estate transactions and the intervention of legal and other
Real estate transactions can be broadly divided into the two following processe s:
The conveyancing process (buying and selling); and
The renting and letting process.
In turn, each transaction process can be disentangled, for the sake of clarity, into several
stages. The l atter are presented in the following sections to provide an overall
understanding of the typical sequence followed during real estate transactions for both the
buying/selling and the renting/letting process.
3.1.1 The process to buy or sell a property
In order to understand the transaction process, its various steps and the problems
encountered by consumers, a basic knowledge of key differences among European legal
systems is first needed, in particular as regards the registration systems and the legal
stages of the transaction process129.
An overview of legal registration systems
All EU Member States have some competent national authorities for registering ownership
of and charges on land. In this report, we use the term land register. In the various legal
systems covered by this report, this authority is called for example:
Table 9: Competent national authority for registering ownership of and charges on land
Name of national authority
Name of national authority
Registri immobilari
Conservation des hypothèques
Conservation des hypothèques
Katastru nemovitostí
K 
Conservatória do Registro Predial
Registro de la Propriedad
Katastru nemovitostí
Z 
Lainhuutorekisteri (title register) and
Kiinnitysrekisteri (mortgage register),
Conservation des hypothèques (in Alsace-
M bureau foncier),
England and
Land Registry
UK -
Land Register (besides the older type of
Register of Sasins, which is being replaced
Registry of Deeds (as the old type) and the Land
Registry (as the modern type)
Source: Analysis by the legal expert
129 These parts draw on earlier publications of the legal experts: Schmid, C.U. & Hertel, C. with contribution from
Wicke, H., (2005). “Real Property Law and Procedure in the European Union”, General Report (final), European
University Institute (EUI). Available at:
In all countries, there is a difference between the land register a nd the cadaster.
Technical mapping and land survey is usually documented in the cadaster, while the land
register is competent for the legal state of affairs, i.e. registering ownership and charges
on the land. In some states the cadaster also has tax purposes (in particular in the Code
Napoleon countries, such as Italy and Spain). Typically, both registers are run by separate
offices. Even if there is only one agency handling both registers in the Netherlands,
Hungary, the Czech R epublic and Slovakia, these are nevertheless clearly distinguished
by the law in most cases. Finally, the land register is part of the court system (in most
countries) or runs as an administrative authority.
Nowadays, registration of property transactions is mandatory in the land regist er in a
majority of countries, at least as regards the transfer of ownership. Therefore, registration
of land covers most of the land in all count ries (in most countries more than 95% of all
In Europe, there are two b asic types of land registers: either real rights in land are
registered or documents are registered. Within the EU, the registration of titles enjoys a
slight majority by countries and by population:
The registration of rights is used i n the Central European ‘land book’, the new
British Isles ‘land register’, the Nordic system and i n the Hispanic subgroup of the
mortgage register. It is thus usual inter alia in Austria, Denmark, England, Finland,
Germany, the Netherlands, Poland, Portugal, Scotland, Spain, Sweden and
The mere registration of documents i s being used in the ‘mortgage register’ of
the French type and in the old common law ‘register of deeds’ (e.g. in Belgium,
France, Greece, Italy and Luxembourg). The registering authority is called
‘mortgage register’ (c onservatoire des hypothèques). Whereas t he Polish,
Portuguese and Spanish registers are also called ‘mortgage register’, they contain
rights, not only documents.
As regards the basic formats for registration, the registration of rights is always done in
the form of a realfolium (i.e. ordered by t he land registered), whilst the registration of
documents is normally done in the form of a personalfolium (i.e. ordered by the name
of the respective owner). This means that finding information on the legal stat us of a plot
of land is normally more difficult for consumers and other interested parties.
An important distinction refers to the substantive effects of the registration.
Registration may be either constitut ive, meaning that the transfer of ownership or the
contractual creation of a real right in land will be completed only with registration, or
merely declaratory. The first system may be found in countries influenced by the German
and English legal systems; the second is typical of the countries of the French legal family.
In a system with declaratory registration, a transfer or a real right is usually opposable
to third parties (third party effect) only af ter registration. Moreover, the time of
registration (or the time of filing for registration in the Code Napoléon countries)
determines the rank among different rights. Other effects of registration may be the legal
presumption that registered rights really exist (and, conversely, that non-registered rights
do not exist) and, even further, the protecti on of good faith, i.e., that a bona fide
purchaser may rely on the content of the register (the so-called positive as opposed to a
negative system). The protection of good faith acquisition is dominant in countries with
constitutive registration whereas no such protection exists in the countries of the French
legal family. In the English system, registration in itself grants the right of disposition
irrespective of the good faith of the other party to the transaction. In addition, in some
countries, registration is merely declaratory for the transfer of ownership, but constitutive
for the creation of limited rights in land such as mortgages or easements (Italy, Poland
and Spain, only for mortgages).

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