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Real estate registration rules amended

October 5, 2020

Moldovan Parliament has approved amendments into the Law on the Real Estate Cadastre (to become effective on 11 October 2020). These amendments are supposed to integrate the latest substantial legislative reform of land and other property rights set out in the amended Moldovan Civil Code. Although they cover a wide range of complex property law issues, we will only cover some of them that we considered to be the most significant ones.

Ending the division of the rights to the land and the buildings on it

The aim of the recent major reform of property rights as provided for by the new provisions of the Civil Code was to end the division of rights to the land and the constructions built on it. Beginning from 01 March 2019, all the constructions within a land lot have seized to be real estate objects separate from that land lot and have become an integral part of that land. Such constructions can only continue being regarded as separate real estate objects, if the owners of the land and the building had been different persons before 01 March 2019. In the latter case either of them has a priority right of purchase if the land or the construction is being sold.

For building owners who do not own the land, the right of superficies shall be registered. This right implies the right to build and operate constructions on the land belonging to other persons.

Real estate lawyers proxy

Most transactions with the land and its components require notarization. However, they shall further be registered with the real estate registry. It may be done personally or through a proxy.

Previously, the authority of the representatives who submitted the documents on behalf of their clients should have been confirmed by a notarized power of attorney. According to the new amendments, if the title holder is represented by a lawyer (who is a member of the Bar) the respective powers of the lawyer can be confirmed through the mandate issued by that lawyer and signed by the client.

The term for considering the documents submitted for registration

The general term for considering the documents submitted for registration has been extended from 7 to 10 working days.

At the same time, the legislator removed the earlier rule on the basis of which a preliminary note was introduced into the registry immediately upon submission of the documents for registration for the period necessary to consider the documents submitted and take the decision on the registration. However, the new amendments have failed to clarify the situation that can happen in cases where, during the period between the documents submission and the taking of the registration decision, some additional factors intervene.

The general rule set out in the Civil Code provides that the effects of the registration occur from the date of submitting the documents for registration. However, the question still remains unclear of what happens if additional notes are introduced into the registry between the date of submitting the documents for registration and the date of taking the decision on the registration.

The most obvious example is as follows:

The purchaser of the land submits the sale-purchase agreement to be registered and property title transferred. If everything goes well, these documents are registered within 10 days, and the date of submitting the documents to the registry is considered the date of the registration. However, if, in the meantime, during this 10-days period the bailiff issues an injunction order blocking any transactions with the land, the note on the injunction shall be introduced into the registry immediately. Therefore, a question arises (and it still remains unclear) whether the registration of the contract (and the title transfer) shall be stopped in such a case.

Preliminary registration

The new amendments specify in more details the situations in which a preliminary registration of the title can be performed. For example, such preliminary registration can be made in cases of contracts that provide for the passing of the title subject to a suspensive condition, court judgment with respect to real estate rights, unfinished constructions, etc.

Upon the respective suspensive condition having materialized, the judgment becoming final, or the construction being finalized, the preliminary registration is confirmed and turned into permanent one.

Registration of trust ownership rights

The new version of the Civil Code introduced the notion of trust into Moldovan law.

We are not going to describe here all the details of trust regulations and will only mention that the new amendments into the Law on the Real Estate Cadastre specify the grounds on which the trust note is introduced into the registry.

It should be mentioned that if the trust beneficiaries are specified in the documents which serve as the basis for establishing the trust, then they are also introduced into the registry.

 

The new amendments also set out a number of other new rules, eg. on introducing into the real estate registry of the notes on legal actions with respect to specific immovable property, the property rights introduced into the share capital of a company, preliminary agreements, certain priority rights to immovable property, etc.

All these new provisions are supposed to reflect the complexity of property transactions provided for by the recently amended Civil Code of Moldova.

* You can get in touch with us to learn more about the new rules of registration of property rights to immovable property. To learn more about the services we provide in the area of real estate and construction law, please check out the respective page.