The Netherlands

In the case of a residential lease, the transfer of ownership of the leased object will not end the lease. The new owner assumes all rights and duties of the former owner, even in the case of a forced sale (on execution) (Civil Code, art. 7:226), and thus automatically becomes the new landlord. The same applies to an agricultural lease under (Law on Agricultural lease (Pachtwet), art. 34; in future: Civil Code, art. 7:361).

The answer to Case 1 described the requirements to be met in order validly to create a right of usufruct, hereditary building lease (superÞcies) or hereditary land lease (emphyteusis). One of the requirements is registration of the notarial deed in the Land Register (Civil Code, arts. 3:98, 3:84 and 3:89). The underlying idea is that registration provides publicity to real rights.32 In other words, there is a possibility for C to become aware of the limited real rights that encumber the land. C should have checked the Register and should have known about B’s limited real right (Civil Code, arts. 3:23 and 3:24). If B’s interest has been registered prior to C’s interest, C must accept that B is entitled to a limited real right of superÞcies, emphyteusis or usufruct, regardless of whether C obtained the property for value or for no consideration.

A feature of a limited real right is that it can be enforced against any third party. This characteristic is not explicitly laid down in the Civil Code, but follows from the fact that limited real rights, in this case the rights of superÞcies, usufruct and empheutysis, have absolute effect against third parties. The enforcement of a (limited) real right against any third party is discussed in detail in the literature.33

If the right of superÞcies, emphyteusis or usufruct has come into existence by prescription, it can be registered (Civil Code, art. 3:17, sub. 1) in the Land Register. However, there is no duty to do so. But in case of prescription, B’s interest works against third parties and thus against the subsequent owner of the land (C) even though B’s interest had not been registered. Third-party protection against unregistered interests (BW, art. 3:24) therefor does not apply where the unregistered interest has been created as a result of prescription (BW, art. 3:24, para. 2e).34

32Pitlo, ‘Goederenrecht’, no. 21, p. 53.

33Asser, Mijnssen and de Haan, ‘Algemeen Goederenrecht’, no. 28; Pitlo, ‘Goederenrecht’, no. 24; Snijders and Rank-Berenschot, Goederenrecht, nos. 65–7. For usufruct, see Kleijn,

Vruchtgebruik, no. 1.

34Pitlo, ‘Goederenrecht’, no. 75.

146 c a s e s t u d i e s

Poland

As has been noted before, B will be protected against C if the lease is created for a fixed term, reduced to writing with a certified date (where the date has been confirmed by a notary or a public body by, for example, endorsement with a seal or stamp) and the property has been physically transferred to the tenant. In such circumstances, the purchaser may not terminate the lease (Civil Code, art. 678) and must endure the tenant on the property. In this case it does not matter whether the transfer is for consideration or not and whether or not the acquirer (C) has knowledge of the lease. If the lease agreement does not meet the criteria mentioned above, C may terminate the lease by giving notice complying with the statutory notice periods. Article 678 does not apply to leases of residential premises (Civil Code, art. 692). In such cases, C may only terminate the lease by giving notice if the premises have not yet been occupied by the tenant. This right can, however, not be exercised by C if the residential lease has been registered in the Land Register.

Civil Code, art. 694 provides that the general provisions on leases must be applied to special types of leases which have not been regulated in an exhaustive manner. Consequently, Civil Code, art. 678 may be applied to an income-producing (fruendi) lease. This means that C may terminate the income-producing lease by giving notice in accordance with the statutory notice periods. However, if the contract is concluded for a fixed term, reduced to writing with a certified date, and the property has been transferred to the tenant, C must respect the incomeproducing lease. Consequently, Civil Code, art. 678 provides some protection to tenants of ordinary and income-producing leases in case of a sale, but the fact that most lease contracts are concluded in a regular written form is insufficient in practice to prevent the purchaser from giving notice and terminating the lease.

Tenants, therefore, make use of a better instrument to protect their interests, namely entry of the lease into the Land Register. Registration causes a right which is contractual in nature to become effective erga omnes and thus against purchasers of the land after the entry was made. If no such entry has been made, the tenant may only resort to Civil Code, art. 678, which in practice will provide inadequate protection owing to the form in which most leases or income-producing leases are concluded in practice.

In principle, a lease thus gives rise to a mere contractual or personal right, which is only enforceable inter partes. However, the legislator

extended the enforcement of a lease in two instances by making a lease executed in the form prescribed by Civil Code, art. 678 and a lease registered in the Land Register, enforceable against the bona Þde purchaser of the land.

In the case of usufruct, the situation is different as it is a real right, effective erga omnes. As a rule, C will not be able to terminate the usufruct if the usufruct is registered or if the Land Register contains a notification of a pending entry of a usufruct (Law on Land Register and Mortgages, art. 8). If, however, the right of B has not been registered, his/her right will terminate upon conveyance to C if the cause of the conveyance is a legal transaction (and not, for example, inheritance or expropriation), is made for value (LRM, art. 5) and C is not in bad faith. C will be in bad faith if he/ she knew or easily could have found out that the Land Register does not reflect the legal status of the land (LRM, art. 6). LRM, arts. 5 and 6 will not protect C if the Land Register contains a notification of a pending entry (LRM, art. 8). Therefore, as a rule, usufruct will be effective against C, unless C claims that he/she relied on the fact that the usufruct is not registered in the Land Register and the transaction is for value and not gratuitous.

Lifetime habitation is always protected, even against purchases for value and in good faith, regardless of whether it is entered in the Land Register or not. Moreover, if this right is created together with the right of usufruct (that is, the person entitled to lifetime habitation also becomes the usufructuary of land he/she has sold to B), the usufruct will be viewed as an inherent part of lifetime habitation (Civil Code, art. 908, § 2) and will therefore not be extinguished upon transfer of property. However, if B transfers property to C, the holder of the lifetime habitation may demand that his/her right be converted into an allowance (annuity or pension) equal in value to the value of lifetime habitation (Civil Code, art. 914). The reason for this is that the person entitled to the lifetime habitation may not want to live with the purchaser of the immovable, oftentimes a complete stranger. The holder of the lifetime habitation may therefore choose to convert his/her right into an allowance and organise his/her living needs in an alternative manner (for example, by renting somewhere or by moving into a care facility). Lifetime habitation is capable of registration and, although it is in essence a contract, the legislator affords it extended protection, making it even stronger than a traditional real right.

Hereditary lease of land (hereditary usufruct or empthyteusis) may only be created on land owned by the State or local government. The Management of Real Property Act 1997 permits the State or local

148 c a s e s t u d i e s

government to transfer land between them and obliges them to notify the holder of the hereditary land lease (hereditary usufruct) of the transaction (MRP, art. 32, § 3). Apart from this, the State or local government is not permitted to sell land encumbered with a hereditary land lease (hereditary usufruct) to anyone other than the holder (MRP, art. 32, § 1). The transfer of the land to C would therefore be void. Since registration is required for the validity of a hereditary land lease, no legal consequences are attached to unregistered hereditary land leases.

Portugal

The position of a tenant is governed by the maxim emptio non tollit locatum contained in Civil Code, art. 1057, which provides that sale does not supersede lease. Consequently, any person acquiring the rights of the landlord will succeed to the rights and obligations of his/her predecessor and would thus have to allow the tenant, without prejudice to the registration provisions, to continue his/her lease for the remaining period. Although the maxim specifically refers to sales, it covers all kinds of alienations including legacies, donations or the constitution of a usufruct.

As mentioned in Case I, residential leases for a term of less than six years, agricultural leases and forestry leases must be reduced to writing but do not require registration for its validity. Therefore, if concluded in written form before the conveyance of the property to C, these contracts will be enforceable against C.

Both residential leases for a term of more than six years and leases of premises for commercial, industrial or professional purposes, require registration prior to the conveyance to C for their enforceability. Any other factors, such as knowledge or occupancy, are irrelevant.

Under the Law on Real Property Registration (art. 5),35 only a duly registered real right is enforceable against third parties. The personal

35The function of registration in Portugal is to provide publicity of the legal title of the property for enforceability (oponobilidade) against third parties (Law on Registration, art. 5). If the owner sells the same property to two different purchasers, whoever registers first becomes the new owner. Preference among the successive buyers depends on the order of entry of their respective titles in the Land Register. Under the Portuguese legal system registration is not required for the creation or transfer of a real right, except for the creation of mortgages on land. Ownership and limited real rights on land are validly acquired without registration in the Land Register. Unregistered contracts and other transactions involving land are enforceable inter partes between the parties and their heirs (Law on Registration, art. 4). The role of land registration here is to solve a conflict between a successor-in-title and another person who has an incompatible or conflicting