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The same principles apply mutatis mutandis to the personal servitudes of use and habitation.

Spain

When the contract of lease is not governed by the Laws on Rural or Urban Lease, the Civil Code (art. 1571) provides that B’s right will be extinguished on conveyance of the property to C. This follows the ancient Roman law rule that sale supersedes hire: emptio tollit locatio or venta quita renta. This will be the position unless the parties to the contract of sale (A and C) have agreed otherwise,68 or the Law on Hypothecs (LoH) provides otherwise.69 The Laws on Urban and Rural Lease changed this position. Under a contract of lease of both rural and residential property, the tenant (B) will be able to enforce his/her right against C after the property is conveyed to B. This seems to be the case even if C acquires the property bona Þde and for value in terms of the LoH, art. 34 (Law on Rural Lease, art. 22)70 and Law on Urban Lease, art. 14, para. 1) and even if the lease was not registered.71 Under a rural lease, C will have to allow B to remain on the property for the minimum period (three years) or for any extension thereof.72 By contrast, in a lease of residential property, the right will always remain enforceable for at least the first five years of the contract73 (Law on Urban Lease, art. 14, para. 1). Where C is protected by LoH, art. 34,74 he/she will have to respect the contract only for the rest of the remaining five-year period, irrespective of the fixed term of the lease (Law on Urban Lease, art. 14,

68Lucas Ferna´ndez, ‘Comment on article 1571’, p. 1139.

69It is understood that this occurs when the lease contract was registered in the Land Register (Lucas Ferna´ndez, ‘Comment on articles 1571 and 1572’, pp. 1353–4). In such a case C cannot argue that he did not know that the lease contract existed.

70Law on Hypothecs (LoH), art. 34 protects the purchaser in good faith who has acquired the property for value from a person who had apparent authority to convey ownership in immovable property in the Land Register. This article protects a bona fide purchaser who acquires for value and from a person who apparently has the capacity to convey the ownership over the immovable in the Land Register. This means that B will be protected even when the lease contract was not registered. See Vattier Fuenzalida, ‘Comment’, pp. 250–1.

71Fı´nez Rato´n, ‘Comment’, p. 204. 72 Vattier Fuenzalida, ‘Comment’, p. 254.

73Note that the contract can last as long as the parties decide, but, if the agreed term is under five years, the contract will be compulsorily extended (prorrogado) year by year for a minimum of five years (Law on Urban Lease, art. 9).

74C must have acted in good faith and must have acquired for value from a registered owner without the lease being registered in the Land Register (Fı´nez Rato´n, ‘Comment’, p. 205).

para. 2).75 In all other instances (that is, when the purchaser C is not protected by LoH, art. 34), where the fixed term of the lease between A and B exceeds five years, the lease will be enforceable until expiry of such term (Law on Urban Lease, art. 9). Where the parties (A and B) have agreed that conveyance of the property shall extinguish the contract, the purchaser C will be bound by the lease only until the first five years have expired (Law on Urban Lease, art. 14, para. 3).

In the case of usufruct, right of use and right of habitation, B’s right remains enforceable against C76 if the limited real right is registered in the Land Register before the property is conveyed to C (LoH, art. 13).77 This is the position irrespective of C’s knowledge or whether he/she acquired the property for value or not. Regional laws contain no special provisions on this issue.

Since a loan for use creates mere personal rights between the parties, the right of the borrower (B) cannot be enforceable against C unless this is specifically provided for in the contract between A and C.78 The Fuero Nuevo contains no special rules on this issue.

Precarium is never enforceable by B against the new owner (C), as it is a gratuitous concession granted by the owner (A), which remains revocable at his/her will. The conveyance of property to C can be construed as an implied revocation of the permission given to B to use A’s property.

As already mentioned, all limited real rights may be registered and if registered shall be enforceable against the world at large (LoH, art. 13). Since a hereditary building lease (superÞcies) is recognised as a limited real right, it becomes enforceable vis-a`-vis C as soon as it is registered. Under Spanish Land Law (SLL) of 2008, art. 40.2, registration is needed for the constitution of the right of superÞcies. At the same time, non-registered real rights are not enforceable against third parties (LoH, art. 32). Once

75In this case, A will have to indemnify B with one month’s rent for each of the remaining years over the five years’ term.

76But this occurs just until the expiration of the term for which the real right was created. Civil Code, art. 489 allows A, the nude owner (nudo propietario), to transfer his/her right of ownership. Civil Code, art. 513 lists the ways of termination of usufruct: conveyance of the property is not included among them. Civil Code, art. 529 provides that the rights of use and habitation expire in the same ways as usufruct.

77Lacruz Berdejo, Elementos, vol. 3, p. 196.

78Although the Civil Code contains no special provision on conveyancing of the property temporarily given to B, Civil Code, art. 1742 provides that in the case of A’s death the latter’s rights and duties are transmitted to his/her heirs who will have to respect B’s position, except ‘when the loan was agreed by taking into account the personal qualities of B’ (when it is a contract intuitus personae). In this case, the heirs of B have no right to continue with the use of the property.

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registered, the hereditary building lease will consequently be effective against C, irrespective of his/her knowledge or whether he/she acquired the property for value or not. Catalonia’s Civil Code, art. 564–3.3 provides that registration is not required for the constitution of a hereditary building lease (superÞcies). Registration of the constitution or modification of the right or knowledge of the right on their part is required for the enforceability of the right against third parties.

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Although Spanish law does not accept the Roman law maxim emptio non tollit locationem, a lease registered in the Land Register will prevail on attachment and, in the field of urban leases in particular, there has been a tendency to afford greater protection to tenants on attachment of the property. In Italy, leases registered prior to the attachment will prevail as well as unregistered long leases for longer than nine years for the first nine years of the lease. If the date of shorter leases is not certified, but the lessees entered into possession before attachment, the purchaser has to honour the lease for specified periods, which vary according to the nature of the lease. In England, if creditors of A seek a charging order against A’s property to secure payment of a judgment debt, the order is limited to A’s reversionary interest in the land subject to the lease and the lease of B, which is a separate estate, is not included in the procedure. In Denmark, B’s rights in terms of an ordinary lease will be protected both in case of attachment of A’s property by his/her creditors and in the event of A’s insolvency. Extraordinary lease provisions will also be protected if they were registered before the attachment of A’s property or A’s bankruptcy.4

In most jurisdictions, for instance, Germany, Austria, Belgium, Spain, Portugal and South Africa, a prior lease will also prevail in a sale in insolvency and the purchaser will also be subrogated for the lessor A.5 Similarly, in England, the reversion of the lease vests in the trustee on bankruptcy of the landlord and the trustee is subject to all the liabilities which bind the bankrupt landlord. However, the lease of B, being a separate estate, is not included in this procedure.

The court may, in certain circumstances, revoke a lease concluded in Greece and Belgium during the so-called ‘suspect’ period, that is, between the date A defaulted on his/her payments and the date of the official declaration of the bankruptcy by the court. The instances are where the rent is disproportionately lower than the market rent and where the tenant knew that the landlord was insolvent or that the lease was concluded fraudulently for the purpose of defrauding A’s creditors.6

In exceptional cases, the administrator in insolvency is entitled to terminate a residential or agricultural lease to facilitate the proper

4If not registered, these rights will be extinguished even if the creditors were in bad faith.

5See e.g. the German, Austrian, Belgian, Spanish, Portuguese and South African reports.

6See the Greek and Belgian reports.

management of the bankrupt estate. Similarly, in Spain, either the insolvent landlord or the administrator in insolvency may request the court to terminate the lease on the ground that it is in the best interests of insolvency proceedings or that the lease impedes the sale of the assets. The court may then award damages to the tenant for the loss of the lease.7 In all cases of termination, reasonable notice must be given to the tenant.8

Most jurisdictions accept that a mortgage registered prior to the conclusion of the lease ranks higher than the lease, with the result that the land need not be sold subject to the lease.9 If the tenant acted bona Þde, some jurisdictions accept that a lease registered after the mortgage will still be enforceable for nine years in Belgium and Italy and a residential lease for five years in Spain against the purchaser in a forced sale. Only Hungarian law seems to accept that a lease registered after the mortgage can still be enforced against the purchaser in a forced sale.

In South Africa, the owner of mortgaged property may conclude a short lease or register a long lease without the consent of the mortgage creditor, provided that this is not precluded by the mortgage agreement. If the mortgage is enforced, the property must first be offered for sale subject to the lease. Only if the highest bid is insufficient to discharge the mortgage debt, may it be sold free of the lease which would extinguish the lease. The lessee will have a contractual claim against A for loss suffered but this will rank as a concurrent (unsecured) claim against A’s insolvent estate. In Denmark, if the rights of the tenant are protected under the Private Housing Act or the Commercial Premises Rent Act, they can be enforced even against a previously registered mortgage.

In most jurisdictions, the fact that a personal servitude has been registered in the Land Register or transcribed in the Mortgage Register10 is sufficient to render it enforceable against a purchaser in a forced sale after attachment proceedings.11 In Hungarian law this also applies to

7See the Spanish and Polish reports.

8See the Portuguese, Danish and Polish reports. This was decided authoritatively by the Portuguese Supreme Court.

9See the German, Austrian, Greek and Polish reports.

10In addition, the Spanish Code of Civil Procedure allows occupiers with sufficient title to remain in possession without requiring their titles to be registered.

11See the German, Austrian, Greek, French, Belgian, Dutch, Portuguese, Spanish, Italian, South African, Hungarian and Polish reports. In Belgium this is subject to the exceptions described in the report under lease.