Экзамен зачет учебный год 2023 / Ramaekers, EU Property Law

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the Netherlands and France seem to employ a deeds registry that converges towards a title registry.84 A notice-filing system is the simplest form of registration and is, for instance, used under Article 9 Uniform Commercial Code (UCC).85 Such a filing system purely provides publicity of the fact that a security right has been created and nothing else. Just how simple notice-filing can be is illustrated in Sigman’s commentary on Article 9 UCC, stating that a single sentence such as the following would suffice:

‘Debtor grants a security interest to Secured Party in all of Debtor’s inventory, wherever located, whenever acquired, to secure all of Debtor’s present and future obligations, of whatever nature, whenever and however arising in favor of Secured Party.’86

A title registry provides the most legal certainty, which may be desirable for European property rights but it can only function properly if the correctness of its contents can be guaranteed.87 The question then becomes: who will provide that guarantee? In a national setting, this guarantee is provided by the government, as the registry is a civil service. With regard to the EU it may not be so self-evident which institution would fulfil this role. Guaranteeing the correctness of the European Registry would also mean that the guarantor would have to assume liability for errors in the registry. This may mean an increase in the costs of registration.88 On the other hand, as we saw before, it has become technologically simpler to register a variety of information concerning an object, a debtor, or a property right. This in turn reduces the costs of registration. Arguably, the costs of registration are also affected by the number of different property rights that can be registered. Given that there would only be three European property rights that could be registered in the European Registry, costs of registration would again be reduced. Therefore, costs or practical difficulties as such should not pose an obstacle to title registration in the European Registry. Whether the EU would want to assume liability for errors in the registry remains a policy choice. If it does not, then a deeds registry may be a better option. It is worth noting that neither Article 9 UCC nor the Cape Town Convention uses title registration.

Rules would be needed to establish a ranking amongst the different European property rights and amongst European property rights and national property rights. There are three possibilities to establish where a European property right should rank in relation to other European property rights and in relation to national property rights created in relation to the same object. Usually, ranking is based on the prior tempore rule: a property right that was created earlier – and registration may be a requirement for creation – has priority over later created property rights. This same rule could also be applied to European property rights. It may, however, prove difficult to establish whether a European property right was created earlier or

84Zevenbergen 2002, p. 57-59.

85Sigman 2004, p. 77-78. For an extensive discussion of the characteristics and (dis)advantages of different registration systems see Zevenbergen 2002.

86Sigman 2004, p. 64.

87Zevenbergen 2002, p. 60-61.

88Zevenbergen 2002, p. 61.

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later than a national property right, depending on whether and how a European property right is registered and whether and how national property rights are registered. Alternatively, European property rights could be granted priority over all national property rights, regardless of the moment of their creation. This option would however not likely be in line with the principle of proportionality, according to which a European rule cannot go beyond what is necessary to achieve the goal for which it was implemented. The simple creation of European property rights suffices to achieve the goal of enabling cross-border trade, without granting them a ‘super-priority’ over national property rights. Finally, in theory, national property rights could be granted priority over European property rights, meaning that a holder of a European property right would have priority only over unsecured creditors. This option on the other hand would conflict with the principle of supremacy of EU law over national law.

The prior tempore rule therefore seems to provide the best means to establish a ranking. It can furthermore be seen as a ground rule shared by the Member States’ national systems of property law.89 In this instance it is advisable that this commonly shared ground rule of property law is also taken over as a ground rule of European property law.90

The Cape Town Convention also follows the prior tempore rule. Article 29 of the Convention states that: ‘[a] registered interest has priority over any other interest subsequently registered and over an unregistered interest’.91 For a national interest to become a registered interest for the purposes of Article 29 – and thus to acquire an ‘international’ ranking, so to speak – it is necessary that the International Registry receives notice that a national interest has been created.92 This system could also be applied to determine the relationship between European property rights and national property rights. Ranking would then be established on the basis of the prior tempore rule: earlier registered rights have priority over later registered rights. It should be made possible to notify registration of national property rights to the European Registry, so as to simplify a ranking between European rights and national rights.93 The International Registry set up under the Cape Town

89Van Erp 2009b.

90To compare, see the Text of Forum Group Report Recommendations attached in Annex II to the Commission’s 2005 Green Paper on Mortgage Credit, which, at no 30, states: ‘The Commission should ensure that:

-all charges affecting real estate must be registered in a Public Register in order to be binding on and take effect against third parties, regardless of their nature

-the creation, modification or extinction of a charge on real property shall become effective vis-à-vis third parties only at the point of registration in the Public Register; and

-registered charges on real property in relation to the same estate shall rank in the order of

priority disclosed in the Public Register.’ [emphasis added]

91See also Honnebier 2006, p. 24.

92Art. 1(t) and (cc); Goode 2008, p. 223.

93In that sense, the proposal in this chapter would go a step further than Veder’s suggestion that every national system indicates where it places a European Security Right; Keirse & Veder 2010, p. 185 et seq. See also Smits 2010, p. 430: ‘Om dat recht overal in Europa dezelfde plaats te geven ten opzichte van locale rechten […] is een utopie, zoals Veder terecht schrijft. Maar dat is ook niet nodig: als bekend is hoe elk nationaal recht een dergelijk Europees recht plaatst in de nationale rangorde, kan al belangrijke winst worden geboekt.’

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Convention itself and also the European Union Land Information Service (EULIS) project94 show that it should be possible to link national registries to a European registry (and vice versa). Notice of registration of national property rights could in that way be made automatic, thus enhancing the application of the prior tempore rule to the ranking between European property rights and national property rights.95

The topic of registration will be revisited briefly below, when the European Security Right is discussed, to draw a parallel with other international registration systems that have been set up for the registration of international security rights.

A European property right should have effect in insolvency proceedings if it was registered prior to the opening of the proceedings. If registration is a constitutive element for the valid creation of a European property right then any European property right existing at the moment insolvency proceedings are opened will have been registered. ‘Effect’ means that the holder of a European property right has priority over unsecured creditors.96 In the absence of substantive EU rules on insolvency law – the Insolvency Regulation primarily governs matters of private international law97 – European property rights will somehow have to be made to fit into the national systems of insolvency law. This is not an ideal situation.98 The ECJ case of Krantz, which is discussed at length in Chapter 2, shows that national rules of insolvency law or tax law may overrule the priority which the holder of a security right would otherwise have had (in the case of Krantz it became clear that under Dutch law the tax authorities are allowed to seize goods that are found on the premises of a taxpayer even if those goods have been delivered under a retention of title clause and are therefore not yet owned by the taxpayer but by the seller). It would be preferable to have European substantive regulation of insolvency law as well as EU property law. However, as long as such regulation is not in place, national courts, when applying national insolvency law, will still have to abide by the EU’s effet utile principle. If the intention of the European legislature is that

94The project links together several national digitized databases containing information on land, for instance national land registries and national cadastres. It can be found at: <http:// eulis.eu/>. EULIS is supported with funding by the Commission: see the Commission’s 2005 Green Paper on Mortgage Credit in the EU, COM(2005) 327 final, p. 12 at 45. For more information about EULIS see Ploeger & Loenen 2004.

95Kreuzer, when he proposed the creation of a European Security Right in 1990, argued that ESRs and national security rights should be separated more strictly: it should not be allowed to cumulatively create both ESRs as well as national security rights in relation to the same object, but only to create either ESRs or national security rights in relation to the same object; p. 638. However, with the present-day possibilities for electronic registration, it should be possible to create ESRs and national security rights in relation to the same object, if parties so wish, and still maintain a high level of publicity and accessibility to information about registered rights.

96Cf Goode 2008, p. 231-232 on Art. 30 of the Cape Town Convention on Effects of Insolvency. The principal purposes of (corporate) insolvency proceedings are to seize and realize (or take possession and sell) the bankrupt company’s assets, and to rank the claims of creditors and meet their claims from the proceeds of the sold assets in order of priority. Holders of security rights that are effective in insolvency proceedings will have their claims met in priority over unsecured creditors. McKendrick & Goode 2010, p. 907.

97See Chapter 4, Part I at 1.3. Regulation 1346/2000/EC on insolvency proceedings.

98It would be more ideal to have European substantive insolvency law complement EU property law. Similarly Kreuzer 1990, p. 633.

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European property rights have effect in insolvency proceedings then national courts must ensure this effectiveness. Furthermore, as was explained in detail in Chapter 2, the application of national law may not lead to obstacles to free movement within the internal market. However, given that the starting point of national insolvency law is generally to recognize property rights validly created before insolvency proceedings commence, it should not be too problematic to recognize the effectiveness of European property rights in insolvency where they have been validly created and registered prior to the insolvency proceedings.99

Rules governing the destruction (or extinction) of European property rights would have to be established. A property right is destroyed if the object on which it rests ceases to exist (destruction of subject-matter) or if the right itself ceases to exist (destruction of right).100 Destruction of subject-matter can be as straightforward as a burnt-out car, but it also occurs when a loan is repaid, destroying the right of pledge resting on it,101 or in the case of accession, when one thing becomes physically attached to another leading to a loss of the right on the minor thing.102 Destruction of the right itself can, for instance, occur through acquisitive prescription, when a non-owner has been in possession of an object for a period of time after which the law grants ownership to this person, thereby destroying the right of the original owner.103 Destruction of the right itself can also occur when the rightholder abandons his right, although whether abandonment actually leads to destruction depends on whether the object is movable or immovable and whether the return of the right to the State – if this happens – is considered to be creation of a new right or transfer of the existing right.104

The question for EU property law would be whether or not European property rights can be extinguished in the same manner by which they were created. If registration is a constitutive requirement for the creation of a European property right, then it should also be a constitutive requirement for the destruction of a European property right.

A decision must be made whether it will be allowed to use the European Use Right – about which more hereafter – as security, in other words whether a European Security Right can be created on a European Use Right. This involves the stacking105 of property rights. There is no reason why a European Security Right should not be able to be created in relation to a European Use Right. A European Use Right would be an intangible asset – a right representing an economic value for the rightholder. The rightholder of the European Use Right should be able to provide that right as collateral for a loan secured by a European Security Right.

The operating rules should state in relation to what objects European property rights can be created. The acquis already clearly distinguishes three categories of objects as objects of property rights, namely immovable, movable and intangible

99Goode 1998, p. 464.

100Van Erp & Akkermans 2012, p. 1008.

101See e.g. a Dutch judgment from the Hoge Raad, 17 February 1996, Mulder qq v CLBN NJ 1996, 471 as excerpted in Van Erp & Akkermans 2012, p. 914-915.

102Van Erp & Akkermans 2012, p. 980 et seq.

103Van Erp & Akkermans 2012, p. 1009.

104Van Erp & Akkermans 2012, p. 1009-1010.

105Akkermans 2008, p. 401.

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objects. This should be consolidated in the optional instrument on EU property law. What are still needed are definitions of these three categories. These would have to be included in the list of definitions in the optional instrument.

European-autonomous property rights should be drafted. Examining the different national property rights that have developed over centuries leads to the conclusion that they all fulfil one or both of two basic functions: to enable the use and benefit of an object; or to have the power to dispose over an object for security purposes.106 At national level, limited property rights contain one of these functions, whereas the primary right (which is either ownership, fee simple, or title) contains both of them.107 Therefore, at European level, it would suffice to create three types of property rights: a primary right, a security right and a use right. This trichotomy is based on what is known about national property rights and about the functions they fulfil but the content of these European property rights will be influenced by both national and existing EU property law, and by other international property rights. I have decided to name these European property rights after the function they fulfil and not to use terms such as ‘ownership’ and ‘limited property rights’. This terminology is connected to national property law concepts and to theories regarding the relationship between limited/lesser property rights and more extensive/the most extensive property right within a property law system. These theories are meant to explain where the limited property rights come from, whether and how they burden the primary right and whether or not they are carved out of the primary right. As will be discussed further below, these theories do not necessarily need to underlie EU property law. It is therefore useful, when describing the development of European property rights, to use ‘system-neutral terminology’.108 The terms primary right, security right and use right are system-neutral (as opposed to, e.g., freehold title, Grundschuld or usufruit) and functional.

The primary right would be the most extensive property right a person could hold under EU property law.109 With regard to the security right and the use right, two approaches can be taken: a uniform approach, in which all types of use rights are subject to the same set of rules110 (and in which all types of security rights are subject to the same set of rules – this is the approach taken in Article 9 Uniform Commercial Code on Secured Transactions,111 in the Cape Town Convention,112 and to a large extent in Book IX of the Draft Common Frame of Reference;113 it was also the approach suggested by Kreuzer when he first proposed a European Security Right);114 or a fragmented approach, in which different rules apply for each type of use right and for each type of security right.115 Under the latter approach, different

106Van Erp & Akkermans 2012, p. 425. See also Akkermans 2008, p. 412.

107Akkermans 2008, p. 418.

108Akkermans 2008, p. 410-412. See also Gretton 2007, p. 851.

109Cf Van Erp 2008b, p. 25-26.

110Cf Füller 2006, p. 560-1 as quoted in Akkermans 2008, p. 465-466.

111Sigman 2004, p. 56 and 58.

112Van Erp 2004, p. 93.

113Van Erp & Akkermans 2012, p. 1067-1070.

114Kreuzer 1990, p. 638. See also Kieninger 2004a, p. 669, who also proposes a uniform approach.

115Cf Sagaert 2006, p. 31.

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rules would, for instance, apply to rights on movables than those that would apply to rights on immovables. I would propose to follow the uniform approach for the creation of European-autonomous property rights. The fragmented approach which currently exists at Member State level is sometimes the result of historical developments rather than of deliberate choices based on consistency and coherence.116 Given that there is still so little EU property law, there is no need to build on an existing system that developed long ago and under different circumstances and there is room to make consistent and coherent choices.117 A uniform approach would make the European list of property rights simpler, more efficient and more transparent: it would only need to contain a European Primary Right (EPR), a European Security Right (ESR) and a European Use Right (EUR). The fewer property rights can be created, the simpler registration of these rights becomes and the easier it becomes for third parties to find out about the existence of those rights.118 This in turn reduces information costs and increases legal certainty.119 Should specific rules be necessary in addition to the general rules governing these European property rights – for instance, to provide protection for consumers in the case of a B2C transaction – then they can be included.120

A person wanting to create an ESR or EUR in relation to an object should have the power to dispose over that object. According to national law the power to dispose over an object normally flows from holding the primary right (e.g. ownership) in relation to that object. The security right or use right is then either derived from that primary right or seen as burdening the primary right. The former is referred to as the method of démembrement (or subtraction) by which a limited property right is created by transferring parts of the primary right to another party, in whose hands they will form a new property right.121 The latter is referred to as the limitation method by which a limited property right is created separately from the primary right. It will not involve the separation of certain parts of the primary right, as is the case with démembrement but its existence does limit the holder of the primary right in his exercise of that right.122 It could be decided in the optional instrument on EU property law that one only has the power to create an ESR or EUR if one is already the holder of an EPR. In that case, the existence of an ESR or EUR would be dependent on the existence of an EPR. It is however not necessarily required to create an EPR for this purpose as the decision whether someone has the power to dispose over an object could also be left to national law. In that case, if someone has the power to dispose over an object because that person is the rightholder of a national primary right in relation to that object then that could be sufficient to allow him to create an ESR or EUR.

116Cf Akkermans 2008, p. 486; Van Erp 2008b, p. 22; Van Erp 2006c, p. 8-9; Sagaert 2006, p. 46-47; Füller 2006, p. 560-561 as quoted in Akkermans 2008, p. 466. See also Kreuzer 1990, who refers to the current landscape of security devices in Europe as a Flickenteppich; p. 637.

117Cf Van Erp 2008b, p. 33.

118Sagaert 2006, p. 42.

119Sagaert 2006, p. 42. See also Merrill & Smith 2000-2001, p. 26.

120A similar approach is taken in Art. 9 UCC: Sigman 2004, p. 56.

121Akkermans 2008, p. 413.

122Akkermans 2008, p. 413.

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The need for the creation of an EPR alongside the ESR and EUR in the optional instrument therefore rests on different reasons. It would enable parties to acquire property in another Member State with the certainty that the content of their primary right would not be dependent on the current or future location of the property. This could, for instance, be interesting for someone wanting to buy immovable property in another Member State or for a company wanting to establish a base in several Member States.123

An issue that would need to be taken into account with regard to the EUR is whether or not it could exist ‘in gross’. Within national systems of property law it can be observed that most use rights in relation to immovable property can exist ‘in gross’, or without a dominant tenement, but some cannot. For some use rights in relation to immovable property it is required that the grantee of the use right, the rightholder, must own immovable property himself and that the immovable property must directly benefit from the use right.124 This is, for instance, the case for civil law servitudes and English easements and restrictive covenants but not for English profits a prèndre.125 Sagaert describes this with the terms ‘active side’ (actiefzijde) and ‘passive side’ (passiefzijde) of patrimonial rights (vermogensrechten).126 The active side is the person holding the property right to use, the grantee or rightholder; the passive side is the grantor of the property right to use, the person whose ownership of an immovable is limited by this use right. For use rights such as profits, usufruct, emphyteusis and superficies only the passive side needs to have a right of ownership over an immovable object that ‘serves’ the use right that rests on it (i.e. servient tenement). For these rights it is not necessary that the active side owns immovable property that benefits from the use right. The fact that, for servitudes and easements, it is required that the active side own immovable property, and that that property directly benefit from the use right, makes those rights a-typical in comparison to other use rights.

Given that there would only be one European Use Right, a decision would have to be made whether or not that use right can exist without the need for a dominant tenement owned by the active side, or rightholder, of the EUR, that benefits from the EUR.

4.2.Definition of Terms

The operating rules would have to be accompanied by a list of definitions of property law terms used in the optional instrument on EU property law and in future legislative measures using property law terms.127 Such a list is necessary for a

123Cf Bright & Bright 1998, p. 372.

124Akkermans 2008, p. 423; Sagaert 2005 at No. 41.

125Van Erp & Akkermans 2012, Chapter 3, Note 2 under excerpt 3.85 (E&W), Note 1 under excerpt 3.94 (E&W), Note under excerpt 3.98 (E&W), and section II.A.7. Profits a prèndre. See also Sara 2011, p. 239; French 2000-2001, p. 231.

126Sagaert 2005 at No. 39.

127The need for definitions is not just felt in the area of property law: the proposed consumer rights Directive also aims to harmonize core concepts of consumer law to create more legal certainty for consumers and companies; see Keirse & Veder 2010, p. 32. Cf also Schulte-Nölke 2007, p. 342: ‘A core task could be coherence of terminology.’

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number of reasons. It is meant to promote coherence and consistency in the use of property law terms in EU legislation. This in turn will prevent uncertainty about the meaning of terms for those implementing and relying on the legislation.128 This should decrease the need to resort to the ECJ to obtain an authoritative interpretation. These definitions should also be used in legislation which regulates an area of law other than property law but which nevertheless uses property law terminology. The research culminating in Chapter 4 showed that many of the property law terms are found in legislation which deals with a different issue area than property law. Nevertheless, it is also important for those instruments that if and when property law terminology is used it is used consistently. Inconsistent use of property law terminology in EU legislation leads to inconsistent implementation at national level, neither of which is helpful for a proper understanding of EU property law. If a different definition is required, there should be a clear statement why and how it deviates from the standard definition.

It is impossible to reach purely European-autonomous definitions on the basis of existing European legislation only: the existing property law acquis simply does not provide the foundation for it. Comparative research will often be necessary to come to a definition, which is however not to say that such definitions cannot be constructed in such a way as to accommodate the needs and requirements of the European Union.129

Looking at the list of terms drawn up for the terminological research conducted in Chapter 4,130 there are only four terms defined in the acquis, namely rights in rem, property/assets, possessor, and assignment.131 The other terms in the list do not yet have a European-autonomous meaning. These definitions still need to be filled in. As said, comparative research could play a role here. In order to formulate these definitions, inspiration might also be drawn from the definitions drafted in the context of the DCFR. The DCFR contains three books on property law: Book VIII on Acquisition and loss of ownership of goods; Book IX on Proprietary security in movable assets; and Book X on Trusts. The property terminology used in these books – and in some of the other books – has been defined in the Annex to the DCFR.132 The DCFR is currently the only comprehensive

128In a similar context Harry C. Sigman, member of the Drafting Committee that revised Art. 9 UCC, stressed the importance of the definitions contained in Art. 9 UCC: Sigman 2004, p. 55.

129Cf Kieninger 2002, p. 371: ‘Ein kraftvoller Ideenwettbewerb zwischen mitgliedstaatlicher und europäischer Ebene […] [ist] allerdings nur dann zu erwarten, wenn der Gemeinschaftsgesetzgeber die Schaffung europäischer Rechtsformen nicht […] nur als Suche nach einem Kompromi zwischen den vorhandenen mitgliedstaatlichen Rechtsordnungen begreift, sondern den Mutt zu eigenständigen und innovativen Lösungen findet, die in möglichst geringem Umfang auf das nationale Recht der Mitgliedstaaten rekurrieren.’

130Chapter 4, Part II section 3.

131See Chapter 4, Part II section 4. Defined property law terms.

132Relevant terms as regards property law are the following: Acquisition finance device, Act of assignment, Assets, Assignment, Beneficiary, Co-ownership, Corporeal, Delivery, In/ Dependent personal security, Direct physical control, Global Security, Goods, Immovable property, Incorporeal, Indirect physical control, Intangibles, Interest, Keeper, Lease, Limited proprietary rights, Limited-right-possessor, Movables, Owner-possessor, Ownership, Physical control, Possession, Possessory security right, Property, Proprietary security, Retention of ownership device, Security right in movable asset, Trust, Trustee, Truster.

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study which provides definitions of property law terms that might be used at European level. There is, for instance, no property law equivalent to the Principles on European Contract Law (PECL) or the Principles on European Tort Law (PETL) in which definitions of property law terms have been developed. Nevertheless, while the DCFR definitions may provide inspiration for creating European definitions of property law terms, the DCFR definitions must be used with some caution. First of all, the DCFR books on property law are incomplete: they focus primarily on movables and they only deal with limited property security rights but not with limited property rights to use. Secondly, they were developed under great time pressure, which may have had an impact on their quality.133 These two issues may also be reflected in a negative sense in the DCFR’s list of definitions.

To illustrate how the DCFR definitions could be used as inspiration for the development of property law definitions for an optional instrument on EU property law, let us look at the term ownership. According to the DCFR, ownership means:

‘“Ownership” is the most comprehensive right a person, the owner, can have over property, including the exclusive right, so far as consistent with applicable laws or rights granted by the owner, to use, enjoy, modify, destroy, dispose of and recover the property.’

Ownership has not been given a European-autonomous definition in the acquis. There is no EU legislation which states what the right of ownership entails. EU law does however tell us what can be owned. According to the DCFR, one can have ownership over property. Property is defined as: ‘“Property” means anything which can be owned: it may be movable or immovable, corporeal or incorporeal.’

This definition is comparable to definitions of property found in the acquis. Definitions of property and assets found in the acquis cover movables and immovables, corporeals and incorporeals. The acquis recognizes that one can have rights in rem – including ownership – over all these types of objects. The definition of assets in the DCFR is somewhat puzzling: ‘“Assets” means anything of economic value, including property; rights having a monetary value; and goodwill.’

Having just seen the definition of property, it is difficult to imagine anything of economic value that would be considered an asset but would not fall under the definition of property. The definitions overlap and it is not clear why it is necessary to have these two separate definitions. The same is true for the acquis: property and assets essentially mean the same thing.134

The list of terms that would need to be defined in the optional instrument on EU property law could be somewhat shorter than the list of terms used in Chapter 4 of this study. If the EU were to create only three European property rights, namely a European Primary Right, a European Security Right and a European Use Right, then there would be no need for definitions of terms such as servitude, mortgage or usufruct.

133Comments to Book X DCFR, p. 5669. See also Van Erp, Akkermans & Ramaekers 2012, p. 7.

134See Chapter 4, Part II section 4.2. Property/assets/things/objects.

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5.EU Property Rights

This section is devoted to the issues and policy questions that must be addressed when developing European property rights.

5.1.European Primary Right

The European Primary Right (or EPR) could be used by parties as an alternative to their national primary rights (i.e. ownership, fee simple, title…). Transferring an EPR from one party to another would be done in accordance with the rules laid down in the optional instrument. The question then remains where the ‘first’ EPR comes from; how it is created. For the European Security Right and European Use Right this question is easily answered: if someone has the power to dispose over an object that person can create limited property rights in relation to that object. As was discussed above, the power to dispose could be derived from having an EPR or it could be determined by national law (under which the power to dispose over an object normally also derives from having a primary right such as ownership). This however does not explain how one acquires an EPR. Suppose a person has a fee simple estate on a plot of land in England and that person wants to sell that land to an Italian but not by granting him the fee simple estate but by granting him an EPR on the land. Since there cannot be two persons holding two primary rights in relation to one and the same object,135 the fee simple estate would have to come to an end once the Italian acquires the EPR, otherwise the Englishman (or someone else for that matter) could continue to hold the fee simple estate while the Italian held the EPR. I would therefore propose to regulate in the optional instrument on EU property law that a national primary right would first have to be converted into an EPR before the EPR could be transferred to someone else. This conversion would extinguish the national primary right. Conversely, it should be possible to convert an EPR back into a national primary right if someone so wished. Such conversion ought to be registrable. Information on which rights constitute primary rights in national property law could be drawn from comparative research.

An important point that would have to be addressed, if this method of conversion were introduced, is what happens to limited property rights that already existed before the primary right – on whose existence they depend – is converted and then transferred to someone else. This requires a consideration of the concepts of original and derivative acquisition of property. In the case of original acquisition, one receives ‘a right which did not previously exist, which originates in the hands of the new owner or holder of the right’.136 In the case of derivative acquisition on the other hand, one receives ‘a right which previously belonged to someone else’.137 Going back to our earlier example above, the Englishman would convert his English fee simple estate into an EPR and then transfer the EPR to the Italian. The transfer of the EPR between the Englishman and the Italian would constitute a form of derivative acquisition, as the Italian would be acquiring an EPR that previously

135Akkermans 2008, p. 418.

136Van Erp & Akkermans 2012, Chapter 7, p. 617.

137Van Erp & Akkermans 2012, Chapter 7, p. 617.

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