Document Text Contents
Page 1
Real Estate 2009
Published by Global Legal Group, with contributions from:
A practical insight to cross-border Real Estate work
www.ICLG.co.uk
The International Comparative Legal Guide to:
Arias & Muñoz
Ashurst LLP
Babalakin & Co.
Barbosa, Müssnich & Aragão Advogados
Blake, Cassels & Graydon LLP
Clayton Utz
Dittmar & Indrenius
Drakopoulos Law Firm
Gómez-Pinzón Zuleta Abogados S.A.
King & Spalding LLP
Law Chambers Nicos Papacleovoulou
Nishimura & Asahi
Pachiu & Associates
Pepeliaev, Goltsblat & Partners
Pestalozzi Attorneys at Law
Philippi Yrarrázaval Pulido & Brunner Ltda.
Porobija & Porobija Law Firm
Raidla Lejins & Norcous
Schoenherr
Strauss Scher Inc.
Trowers & Hamlins
Wikborg, Rein & Co.
Law Firm Eversheds Saladzius
LOGOS legal services
M. T. Miskita & Company
Makarim & Taira S.
Marval, O'Farrell & Mairal
McCann FitzGerald
Meredith Connell
Mijares, Angoitia, Cortés y Fuentes, S.C.
Molitor, Fisch & Associés
Muscat Azzopardi & Associates Advocates
v
Page 2
www.ICLG.co.uk
Disclaimer
This publication is for general information purposes only. It does not purport to provide comprehensive full legal or other advice.
Global Legal Group Ltd. and the contributors accept no responsibility for losses that may arise from reliance upon information contained in this publication.
This publication is intended to give an indication of legal issues upon which you may need advice. Full legal advice should be taken from a qualified profes-
sional when dealing with specific situations.
Further copies of this book and others in the series can be ordered from the publisher priced at £200. Please call +44 20 7367 0720
Contributing Editor
Simon Cookson,
Ashurst LLP
Brand Manager
Oliver Smith
Marketing Manager
George Turner
Cover Design
F&F Studio Design
Editor
Caroline Blad
Senior Editor
Penny Smale
Managing Editor
Alan Falach
Publisher
Richard Firth
Published by
Global Legal Group Ltd.
59 Tanner Street
London SE1 3PL, UK
Tel: +44 20 7367 0720
Fax: +44 20 7407 5255
Email: [email protected]
URL: www.glgroup.co.uk
Printed by
Ashford Colour Press Ltd.
March 2009
Copyright © 2009
Global Legal Group Ltd.
All rights reserved
No photocopying
ISBN 978-1-904654-58-2
ISSN 1749-4745
The International Comparative Legal Guide to: Real Estate 2009
General Chapter:
1 Cash but no Credit, Confidence or Valuations - Real Estate Markets Stalled - Simon T. Cookson,
Ashurst LLP 1
2 Middle East Real Estate - A Comparative Review - Abdul-Haq Mohammed & Peter Greatrex,
Trowers & Hamlins 5
Country Question and Answer Chapters:
3 Abu Dhabi Trowers & Hamlins: Mark Orman & Jane Dalton 9
4 Albania Drakopoulos Law Firm: Alban Ruli & Ekflodia Leskaj 15
5 Argentina Marval, O'Farrell & Mairal: Santiago Carregal & Diego A. Chighizola 21
6 Australia Clayton Utz: Gary Best & Julie Levis 27
7 Austria Schoenherr: Michael Lagler & Ulrike Langwallner 36
8 Belgium Ashurst LLP: Carl Meyntjens & David Du Pont 43
9 Brazil Barbosa, Müssnich & Aragão Advogados: Christiane Scabell Höhn &
Mariana Senna Sant’Anna 49
10 Bulgaria Advokatsko druzhestvo Andreev, Stoyanov & Tsekova in cooperation with
Schoenherr: Lyubomira Gramcheva & Peter Madl 55
11 Canada Blake, Cassels & Graydon LLP: Thomas von Hahn & Garth Anderson 62
12 Chile Philippi Yrarrázaval Pulido & Brunner Ltda.: José Tagle Quiroz & Carolina
Helfmann Martini 68
13 Colombia Gómez-Pinzón Zuleta Abogados S.A.: Paula Samper Salazar & Jose Fernando
Arias Rodríguez 76
14 Costa Rica Arias & Muñoz: Andrea Hütt & Pedro M. Muñoz 82
15 Croatia Porobija & Porobija Law Firm: Sanja Porobija 88
16 Cyprus Law Chambers Nicos Papacleovoulou: Chrysthia Papacleovoulou & Evi N.
Papacleovoulou 95
17 Dubai Trowers & Hamlins: Abdul-Haq Mohammed & Andrew Thomson 105
18 El Salvador Arias & Muñoz: René Velásquez 111
19 England & Wales Ashurst LLP: Simon T. Cookson & Alison Murrin 117
20 Finland Dittmar & Indrenius: Antti Aaltonen & Raija-Leena Ojanen 126
21 France Ashurst LLP: Philippe None & Sophie Gargaro 133
22 Germany Ashurst LLP: Peter Junghänel & Liane Muschter 140
23 Greece Drakopoulos Law Firm: Alexandra Economou & Marios Trichias 149
24 Guatemala Arias & Muñoz: Vivian Morales Herrera & Ximena Tercero Villagrán 155
25 Honduras Arias & Muñoz: Raul Villars 161
26 Hungary Schoenherr: László Szécsényi & András Török 166
27 Iceland LOGOS legal services: Erlendur Gislason 172
28 India M. T. Miskita & Company: Viren C. Miskita & Mani M. Miskita 179
29 Indonesia Makarim & Taira S.: Rahayuningsih Hoed & Yudhistira Setiawan 186
30 Ireland McCann FitzGerald: Colin Keane & Denise Dockery 192
31 Italy Studio Legale Associato ad Ashurst LLP: Carlo Andrea Bruno & Paola Flora 200
32 Japan Nishimura & Asahi: Hideaki Ozawa & Takuya Fujimoto 207
33 Latvia Raidla Lejins & Norcous: Guntars Zile & Toms Sulmanis 215
34 Lithuania Law Firm Eversheds Saladzius: Jonas Saladzius & Aušrys Šliavas 223
35 Luxembourg Molitor, Fisch & Associés: Laurent Fisch & Olivier Gaston-Braud 230
36 Malta Muscat Azzopardi & Associates Advocates: Adrian Muscat Azzopardi 236
37 Mexico Mijares, Angoitia, Cortés y Fuentes, S.C.: Fernando Orrantia & Eugenio Macouzet 242
38 Montenegro Moravcevic Vojnovic Zdravkovic oad in cooperation with Schoenherr:
Slaven Moravcevic & Michael Lagler 248
39 New Zealand Meredith Connell: Chris Moore & Michael Goodger 254
40 Nicaragua Arias & Muñoz: Gustavo-Adolfo Vargas R. 262
Continued Overleaf
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3 Real Estate Rights
3.1 What are the types of rights over land recognised in
Iceland? Are any of them purely contractual between the
parties?
There are the following three types of rights over land recognised in
Iceland:
Direct right of ownership.
Right to use of real estate, lease or rent of real estate.
Security rights over real estate, liens and mortgages.
All three types are most commonly purely contractual, whereas
statutory liens are created in a non-consensual manner.
Basically, there are four ways of creating rights over land under
Icelandic law. Firstly, and most predominantly, a contractual
relationship between the owner of the land and the beneficiary
forms the basis for such rights (including the enforcement thereof
by way of legal proceedings). Secondly, a third party may be
granted a prescriptive right over the land, if such right has existed
for more than 20 years. Thirdly, rights over land may be created
according to the Icelandic heritage rules. Last, but not least, rights
over land may be created by way of or according to governmental
Acts and orders, particularly with respect to planning, zoning and
environmental issues.
4 System of Registration
4.1 Is all land in Iceland required to be registered? What land
(or rights) are unregistered?
As a general rule all land is required to be registered both by size
and registered owner. Real property in Iceland is further divided
into so-called real estate and land numbers and is registered as such.
However, in certain rural areas, as in the centre highlands, large
areas are only registered by owner without precise boundary
limitations.
4.2 Is there a state guarantee of title? What does it
guarantee?
There is no State guarantee as such, but if a person acting in good
faith has relied on a registration that turns out to be wrong, the State
of Iceland may be held liable for any foreseeable loss suffered by
such person as a result thereof.
4.3 What rights in land are compulsory registrable? What (if
any) is the consequence of non-registration?
No rights are compulsorily registrable, but in order to obtain
protection against legal proceedings against the property and in
relation to subsequent bona fide beneficiaries of rights to a real
property, all rights must be registered. Accordingly, the
consequence of non-registration is that earlier rights may be
defeated by later rights, provided that the later rights are registered.
4.4 What rights in land are not required to be registered?
Rights granted by way of or according to judicial or governmental
Acts or orders covering amongst other things statutory liens,
planning, zoning and environmental issues need no registration in
order to be protected against third parties.
4.5 Where there is both unregistered and registered land or
rights is there a probationary period following first
registration or are there perhaps different classes or
qualities of title on first registration? Please give details.
First registration means the occasion upon which
unregistered land or rights are first registered in the
registries.
No, there is no probationary period or different classes of title on
first registration.
4.6 On a land sale, when is title (or ownership) transferred to
the buyer?
Upon the signing of the sale and purchase agreement the buyer
obtains a conditional ownership, which is subject to the fulfilment of
the conditions laid out in the purchase agreement, such as payment of
the purchase price. Upon fulfilment of all conditions under the sale
and purchase agreement, unconditional title passes to the buyer.
4.7 Please briefly describe how some rights obtain priority
over other rights. Do earlier rights defeat later rights?
Yes, under Icelandic law earlier (unregistered) rights defeat later
(unregistered) rights. Once registered, the later right may, however,
defeat the earlier right if the latter has not been duly registered on
the property.
5 The Registry / Registries
5.1 How many real estate registries operate in Iceland? If
more than one please specify their differing rules and
requirements.
There are 25 ordinary district commissioners maintaining Real
Estate Registries (in Icelandic: Þinglýsingabók) and they are all
subject to the same rules and legislation. All registrations of real
estate sale and purchase agreements are made into the Real Estate
Registries as well as mortgage registrations in order to protect the
rights of the respective beneficiaries against legal proceedings
against the property and in relation to subsequent bona fide
beneficiaries of rights to a real property, cf. question 4.3 above.
The Real Estate Registries form a part of a single central Land
Registry (in Icelandic: Landskrá fasteigna) which keeps track of all
real estate and its taxable valuation. No filings for security
purposes are made into this central Land Registry, whereas it
electronically keeps track of and displays filings made at each
district commissioner’s Real Estate Registry. The Land Registry’s
Title and Interest part accurately reflects filings in Real Estate
Registries around the country insofar as concerns urban property,
whereas it is not yet up to date as concerns certain rural properties,
in particular the status of mortgages and encumbrances on rural
property, the reference for which the local Real Estate Registries
need to be relied upon.
5.2 Can information on real estate ownership be accessed
from the registry on line (electronically)?
Information from individual Real Estate Registries can be accessed
on line through the Land Registry. To the extent that the Land
Registry is not accurate with respect to mortgages on certain rural
property, the respective Real Estate Registry needs to be consulted
directly in a non-electronic manner.
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5.3 Can compensation be claimed from the registry/registries if
it/they makes a mistake?
Yes, compensation can be claimed; see the answer to question 4.2.
5.4 Are there restrictions on public access to the register?
Can a buyer obtain all the information he might reasonably
need regarding encumbrances and other rights affecting
real estate?
There are no restrictions regarding public access. In so far as rights
over the property have been duly registered, information thereof is
kept at the Land Registry and a copy thereof is kept with the Real
Estate Registry, and this copy is available to the public.
6 Real Estate Market
6.1 Which parties (in addition to the buyer and seller and the
buyer’s finance provider) would normally be involved in a
real estate transaction in Iceland? Please briefly describe
their roles and/or duties.
a) Selling and purchasing agents (or realtors)
The seller will normally ask a real estate agent to promote the sale
of the property and to find the right buyer who will pay the highest
price for the property.
b) Lawyers
With respect to commercial properties both the seller and the buyer
will usually be represented by their respective lawyers. The same
may apply with respect to some high value private property. The
buyer’s lawyer will typically carry out due diligence investigations
regarding the property and negotiate the terms and conditions of the
sale and purchase agreement with the seller and his lawyer. Further,
the buyer’s lawyer will typically be the one conveying the purchase,
including preparing the deed, registering the deed and arranging the
transfer of the purchase price. The seller’s lawyer will, on the other
hand, represent the seller in all matters mentioned above.
c) Notaries
Notaries are not required to complete a real estate transaction in
Iceland.
d) Others
In connection with carrying out the due diligence, the buyer often
engages technical and environmental experts. In some complex
real estate purchase transactions, the seller or buyer or both of them
may be assisted by separate tax advisers or accountants, advising
them on structuring the transaction in the most tax efficient way.
6.2 How and on what basis are these persons remunerated?
a) Selling and purchasing agents (or realtors)
The real estate agent’s fee is normally paid by the seller and is based
on a percentage of the purchase price. The percentage is negotiable
but is normally on the range of one to two per cent of the purchase
price depending on the value of the property, the complexity of the
transaction and whether the agency is exclusive or not..
b) Lawyers
Normally, the seller and buyer bear the cost of their respective
lawyers, who are paid by the hour and the invoice is made on the
basis of the actual hours spent.
c) Real Estate Registry
The registration fee is calculated as a nominal basic fee plus a stamp
duty of 0.4 per cent of the taxable valuation, except in case of a first
purchase of real estate by individuals, which is exempt from stamp
duty.
7 Liabilities of Buyers and Sellers in Real
Estate Transactions
7.1 What (if any) are the minimum formalities for the sale and
purchase of real estate?
Usually, a real estate transaction in Iceland is completed in two
steps. The sale and purchase agreement is signed first, which
constitutes the legally binding document between the parties
outlining all terms and conditions of the transaction. Secondly, the
deed of conveyance, which is signed by the parties as well, and is
basically an extract of the most important terms and conditions of
the sale and purchase agreement. Neither document is subject to
any formalities apart from being drafted in Icelandic and the
signatures of the seller and buyer being witnessed by two witnesses,
unless the witness is qualified as an attorney or chartered
accountant, then one witness suffices.
7.2 Is the seller under a duty of disclosure? What matters
must be disclosed?
The seller has a duty to disclose all material information regarding
the real estate that he is or ought to be aware of. The seller is not
allowed to retain information regarding the property that would
normally be considered of importance to the buyer, including
information on defects.
7.3 Can the seller be liable to the buyer for misrepresentation?
Yes, if the representation is found to be negligent, the seller may be
held liable.
7.4 Do sellers usually give contractual warranties to the buyer?
What would be the scope of these? What is the function
of warranties (e.g. to apportion risk, to give information)?
Are warranties a substitute for the buyer carrying out his
own diligence?
Yes, usually the seller gives certain warranties to the buyer. The
catalogue of warranties is subject to negotiations but the seller
would typically accept warranties against (i) certain types of
defects; (ii) illegal use of the property; (iii) wrongful calculation of
rental income, if any; and (iv) disputes. Warranties are often
softened up by adding words like “to the best knowledge of the
seller” to the warranty. The purpose of a warranty is basically to
apportion risk, as the seller may be held liable in the case of breach
of the warranty. Warranties are not seen as substitutes for the buyer
carrying out his own due diligence, but the due diligence may be
less comprehensive when there are warranties in place.
7.5 Does the seller warrant its ownership in any way? Please
give details.
The seller rarely gives any express warranty on his ownership,
because of the fact that the seller may be held liable in any event
and regardless of whether or not the seller has acted negligently.
Also, the fact that the Sale and Purchase Agreement is normally not
signed except with a new title and mortgage certificate having been
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calculated as a percentage of rental payments may be charged
against the tenant.
10.5 In what circumstances are business leases usually
terminated (e.g., at expiry, on default, by either party etc.).
Are there any special provisions allowing a tenant to
extend or renew the lease or for either party to be
compensated by the other for any reason on termination?
Business leases terminate on expiration. They are often terminable
after a major casualty or a default which has not been cured after
notice, although the landlord may negotiate other remedies short of
termination. If the situation warrants, the parties may agree that the
lease is terminable at the election of either party with some required
notice and payment of a penalty. Renewal or extension provisions
are usually limited to pre-negotiated extensions as described in
question 10.3.a. Typically, neither party is responsible for
compensating the other upon termination unless there was a default,
the premises were left in a damaged condition, or a party exercised
contractual right of early termination that required payment.
10.6 Does the landlord and/or the tenant of a business lease
cease to be liable for their respective obligations under the
lease once they have sold their interest? Can they be
responsible after the sale in respect of pre-sale non
compliance?
Generally, the landlord is released from post-sale obligations but
not from pre-sale non-compliance, unless under the sale contract
the buyer agrees to assume those obligations as well. Generally, the
tenant is not released from any of its obligations, pre- or post-sale,
unless it negotiates a release with the landlord.
11 Zoning and Environmental Issues
11.1 What are the main laws which govern zoning and related
matters concerning the use and occupation of land?
Please briefly describe them and include environmental
laws. Can the state force land owners to sell land to it? If
so please briefly describe including price mechanism.
Zoning
Zoning is primarily a matter of local law, with city and county codes
and ordinances governing use, land disturbance, development,
building and occupancy permitting, development impact fees, and
historical preservation matters. Certain federal and State laws,
including the Americans with Disabilities Act, also regulate the use,
conservation, construction, and occupancy of land and buildings.
Government can condemn private property for public use, but the
U.S. Constitution prohibits such takings without just compensation.
Environment
Federal laws include: the Clean Water Act (regulating wastewater,
wetlands, and runoff); the Clean Air Act (regulating air emissions,
like refrigerants and asbestos); the Resource Conservation and
Recovery Act (RCRA) (regulating hazardous waste management);
the Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA) (regulating hazardous substance releases
and clean up); and the Endangered Species Act (regulating effects
on endangered animals and plants).
States and local authorities may administer these laws and/or
impose comparable or supplemental laws.
11.2 Which bodies control land/building use and/or occupation
and environmental regulation? How do buyers obtain
reliable information on these matters?
Zoning
Local city and county planning, zoning, and building code
enforcement departments control most use and permitting matters,
but certain State and federal agencies may also play roles. Buyers
hire zoning consultants and lawyers to obtain information on these
matters.
Environment
The U.S. Environmental Protection Agency has primary
jurisdiction, with the U.S. Army Corps of Engineers and the U.S.
Fish and Wildlife Services having jurisdiction over water
bodies/wetlands and endangered species, respectively. Comparable
State and local bodies exist. Many bodies maintain websites with
basic information on regulated activities, and buyers typically retain
environmental attorneys and/or consultants.
11.3 What main permits or licences are required for building
works and/or the use of real estate?
Zoning
Generally, local government agencies issue (i) site plan approvals,
land disturbance permits, and building permits before grading of
land or new development or alteration of structures commences,
and (ii) temporary or permanent certificates of occupancy before a
structure may be occupied for use. Business licenses are required
for office, retail, hotel, industrial and other commercial occupants.
Liquor licences are required for the sale of alcoholic beverages.
Other uses such as agriculture or mining may require additional
permits.
Environment
During development, most properties require stormwater discharge
permits. Other registrations and/or permits may be required if there
is proximity to wetlands, surface waters, endangered species, or
environmentally sensitive areas, or the constructed facilities will
emit large quantities of regulated air pollutants, cause wastewater
and stormwater discharges, store petroleum, or manage hazardous
waste.
11.4 Are building/use permits and licences commonly obtained
in the United States? Can implied permission be obtained
in any way (e.g., by long use)?
Yes, building/use permits are commonly obtained in the United
States.
Implied permission cannot be obtained in any way.
11.5 What is the appropriate cost of building/use permits and
the time involved in obtaining them?
Costs and time vary depending on jurisdiction and complexity.
11.6 In what circumstances (if any) is environmental clean up
ever mandatory?
Federal authorities can mandate clean ups pursuant to laws like
CERCLA and RCRA when hazardous substances are released.
States can impose additional clean up requirements, which may be
more stringent than the federal ones. Some States have specialised
clean up laws that apply when certain property transactions take
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Susan E. Foxworth
King & Spalding LLP
1180 Peachtree Street, NE
Atlanta, GA 30309-3521
USA
Tel: +1 404 572 3525
Fax: +1 404 572 5100
Email: [email protected]
URL: www.kslaw.com
Susan Foxworth is counsel in the Atlanta office and has more than
20 years experience in King & Spalding’s Commercial Real Estate
Practice Group.
Her practice includes a wide range of commercial real estate
transactions, including acquisition, development, leasing,
disposition and financing of office buildings, shopping centers,
industrial properties, apartment projects, hotels and mixed use
developments. She has extensive experience in complex real estate
transactions and related matters involving the acquisition,
disposition and financing of multi-state portfolios of financial and
real estate assets. She also has experience in the workout,
restructure and foreclosure of real estate.
Ms. Foxworth received her J.D., with honors, in 1987 from the
University of Texas, where she also received her B.B.A. in Business
Administration, with highest honours, in 1984. She is a member of
the State Bar of Georgia, the Atlanta Bar Association and the
American Bar Association.
Noah P. Peeters
King & Spalding LLP
1180 Peachtree Street, NE
Atlanta, GA 30309-3521
USA
Tel: +1 404 572 4867
Fax: +1 404 572 5100
Email: [email protected]
URL: www.kslaw.com
Noah Peeters is an associate in the Real Estate Practice in the
Atlanta office of King & Spalding.
Mr. Peeters’ practice focuses on the representation of developers in
complex real estate transactions, the representation of institutional
and foreign investors in structuring real estate equity investments
and the representation of developers, investors and owners in
connection with the acquisition, financing and sale of real estate
assets. Mr. Peeters has represented these clients in the office,
apartment, condominium, industrial and medical sectors both in the
Southeast and nationwide.
Mr. Peeters graduated, magna cum laude, with honours from
Williams College, with a degree in art and coursework in
architecture and planning. He received his Juris Doctor degree,
summa cum laude, from the University of Georgia Law School,
where he was valedictorian of his class, a member of the Order of
the Coif, and an Articles Editor for the University of Georgia Law
Review. Prior to entering law school, Mr. Peeters was an associate
producer with the CNN News Network in Atlanta, where he worked
on documentary and long-form programming for primetime
television. Mr. Peeters was named a “Georgia Rising Star” in 2006
and 2009 by Law & Politics, a legal industry publisher.
King & Spalding is a full-service international law firm with more than 880 lawyers and offices in Abu Dhabi, Atlanta,
Austin, Charlotte, Dubai, Frankfurt, Houston, London, New York, Riyadh (affiliated office), San Francisco, Silicon Valley
and Washington, D.C. King & Spalding represents clients from the United States and abroad, including half of the
Fortune 100.
The Real Estate Practice Group, together with other attorneys in the firm whose practices are heavily committed to the
firm’s real estate clients, provides experienced and sophisticated advice with respect to the complete range of
commercial real estate transactions. Over 75 lawyers in the firm’s Abu Dhabi, Atlanta, Charlotte, Dubai, Frankfurt,
Houston, New York and San Francisco offices are actively engaged in this practice representing some of the world’s
largest financial institutions, institutional investors, pension funds, investment advisors, asset managers, real estate
investment trusts and developers. www.kslaw.com
King & Spalding LLP USA
place. Accordingly, the required clean up can vary based on the
property’s location and use, the nature of the release, the applicable
standards, and the investigation and clean up approach employed by
the relevant bodies.
11.7 Please briefly outline any regulatory requirements for the
assessment and management of the energy performance of
buildings in the United States.
Many States have enacted energy performance standards based on
the International Energy Conservation Code, and an increasing
number of builders are participating in the voluntary LEED
Certification programme and other developing industry standards.
12 General
12.1 Are there any current proposals for significant reform of
real estate law in the United States - please give details.
The federal government passed the Emergency Economic
Stabilization Act of 2008 in response to the subprime mortgage
crisis. The Act and the Troubled Asset Relief Program it created
(“TARP”), are intended to stabilise the credit markets and improve
liquidity. While the TARP has primarily focused on the financial
sector and residential real estate, there is significant lobbying
underway to expand it include assistance for commercial real estate.
12.2 Date at which law is stated
January 2009.
Real Estate 2009
Published by Global Legal Group, with contributions from:
A practical insight to cross-border Real Estate work
www.ICLG.co.uk
The International Comparative Legal Guide to:
Arias & Muñoz
Ashurst LLP
Babalakin & Co.
Barbosa, Müssnich & Aragão Advogados
Blake, Cassels & Graydon LLP
Clayton Utz
Dittmar & Indrenius
Drakopoulos Law Firm
Gómez-Pinzón Zuleta Abogados S.A.
King & Spalding LLP
Law Chambers Nicos Papacleovoulou
Nishimura & Asahi
Pachiu & Associates
Pepeliaev, Goltsblat & Partners
Pestalozzi Attorneys at Law
Philippi Yrarrázaval Pulido & Brunner Ltda.
Porobija & Porobija Law Firm
Raidla Lejins & Norcous
Schoenherr
Strauss Scher Inc.
Trowers & Hamlins
Wikborg, Rein & Co.
Law Firm Eversheds Saladzius
LOGOS legal services
M. T. Miskita & Company
Makarim & Taira S.
Marval, O'Farrell & Mairal
McCann FitzGerald
Meredith Connell
Mijares, Angoitia, Cortés y Fuentes, S.C.
Molitor, Fisch & Associés
Muscat Azzopardi & Associates Advocates
v
Page 2
www.ICLG.co.uk
Disclaimer
This publication is for general information purposes only. It does not purport to provide comprehensive full legal or other advice.
Global Legal Group Ltd. and the contributors accept no responsibility for losses that may arise from reliance upon information contained in this publication.
This publication is intended to give an indication of legal issues upon which you may need advice. Full legal advice should be taken from a qualified profes-
sional when dealing with specific situations.
Further copies of this book and others in the series can be ordered from the publisher priced at £200. Please call +44 20 7367 0720
Contributing Editor
Simon Cookson,
Ashurst LLP
Brand Manager
Oliver Smith
Marketing Manager
George Turner
Cover Design
F&F Studio Design
Editor
Caroline Blad
Senior Editor
Penny Smale
Managing Editor
Alan Falach
Publisher
Richard Firth
Published by
Global Legal Group Ltd.
59 Tanner Street
London SE1 3PL, UK
Tel: +44 20 7367 0720
Fax: +44 20 7407 5255
Email: [email protected]
URL: www.glgroup.co.uk
Printed by
Ashford Colour Press Ltd.
March 2009
Copyright © 2009
Global Legal Group Ltd.
All rights reserved
No photocopying
ISBN 978-1-904654-58-2
ISSN 1749-4745
The International Comparative Legal Guide to: Real Estate 2009
General Chapter:
1 Cash but no Credit, Confidence or Valuations - Real Estate Markets Stalled - Simon T. Cookson,
Ashurst LLP 1
2 Middle East Real Estate - A Comparative Review - Abdul-Haq Mohammed & Peter Greatrex,
Trowers & Hamlins 5
Country Question and Answer Chapters:
3 Abu Dhabi Trowers & Hamlins: Mark Orman & Jane Dalton 9
4 Albania Drakopoulos Law Firm: Alban Ruli & Ekflodia Leskaj 15
5 Argentina Marval, O'Farrell & Mairal: Santiago Carregal & Diego A. Chighizola 21
6 Australia Clayton Utz: Gary Best & Julie Levis 27
7 Austria Schoenherr: Michael Lagler & Ulrike Langwallner 36
8 Belgium Ashurst LLP: Carl Meyntjens & David Du Pont 43
9 Brazil Barbosa, Müssnich & Aragão Advogados: Christiane Scabell Höhn &
Mariana Senna Sant’Anna 49
10 Bulgaria Advokatsko druzhestvo Andreev, Stoyanov & Tsekova in cooperation with
Schoenherr: Lyubomira Gramcheva & Peter Madl 55
11 Canada Blake, Cassels & Graydon LLP: Thomas von Hahn & Garth Anderson 62
12 Chile Philippi Yrarrázaval Pulido & Brunner Ltda.: José Tagle Quiroz & Carolina
Helfmann Martini 68
13 Colombia Gómez-Pinzón Zuleta Abogados S.A.: Paula Samper Salazar & Jose Fernando
Arias Rodríguez 76
14 Costa Rica Arias & Muñoz: Andrea Hütt & Pedro M. Muñoz 82
15 Croatia Porobija & Porobija Law Firm: Sanja Porobija 88
16 Cyprus Law Chambers Nicos Papacleovoulou: Chrysthia Papacleovoulou & Evi N.
Papacleovoulou 95
17 Dubai Trowers & Hamlins: Abdul-Haq Mohammed & Andrew Thomson 105
18 El Salvador Arias & Muñoz: René Velásquez 111
19 England & Wales Ashurst LLP: Simon T. Cookson & Alison Murrin 117
20 Finland Dittmar & Indrenius: Antti Aaltonen & Raija-Leena Ojanen 126
21 France Ashurst LLP: Philippe None & Sophie Gargaro 133
22 Germany Ashurst LLP: Peter Junghänel & Liane Muschter 140
23 Greece Drakopoulos Law Firm: Alexandra Economou & Marios Trichias 149
24 Guatemala Arias & Muñoz: Vivian Morales Herrera & Ximena Tercero Villagrán 155
25 Honduras Arias & Muñoz: Raul Villars 161
26 Hungary Schoenherr: László Szécsényi & András Török 166
27 Iceland LOGOS legal services: Erlendur Gislason 172
28 India M. T. Miskita & Company: Viren C. Miskita & Mani M. Miskita 179
29 Indonesia Makarim & Taira S.: Rahayuningsih Hoed & Yudhistira Setiawan 186
30 Ireland McCann FitzGerald: Colin Keane & Denise Dockery 192
31 Italy Studio Legale Associato ad Ashurst LLP: Carlo Andrea Bruno & Paola Flora 200
32 Japan Nishimura & Asahi: Hideaki Ozawa & Takuya Fujimoto 207
33 Latvia Raidla Lejins & Norcous: Guntars Zile & Toms Sulmanis 215
34 Lithuania Law Firm Eversheds Saladzius: Jonas Saladzius & Aušrys Šliavas 223
35 Luxembourg Molitor, Fisch & Associés: Laurent Fisch & Olivier Gaston-Braud 230
36 Malta Muscat Azzopardi & Associates Advocates: Adrian Muscat Azzopardi 236
37 Mexico Mijares, Angoitia, Cortés y Fuentes, S.C.: Fernando Orrantia & Eugenio Macouzet 242
38 Montenegro Moravcevic Vojnovic Zdravkovic oad in cooperation with Schoenherr:
Slaven Moravcevic & Michael Lagler 248
39 New Zealand Meredith Connell: Chris Moore & Michael Goodger 254
40 Nicaragua Arias & Muñoz: Gustavo-Adolfo Vargas R. 262
Continued Overleaf
v v
v
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3 Real Estate Rights
3.1 What are the types of rights over land recognised in
Iceland? Are any of them purely contractual between the
parties?
There are the following three types of rights over land recognised in
Iceland:
Direct right of ownership.
Right to use of real estate, lease or rent of real estate.
Security rights over real estate, liens and mortgages.
All three types are most commonly purely contractual, whereas
statutory liens are created in a non-consensual manner.
Basically, there are four ways of creating rights over land under
Icelandic law. Firstly, and most predominantly, a contractual
relationship between the owner of the land and the beneficiary
forms the basis for such rights (including the enforcement thereof
by way of legal proceedings). Secondly, a third party may be
granted a prescriptive right over the land, if such right has existed
for more than 20 years. Thirdly, rights over land may be created
according to the Icelandic heritage rules. Last, but not least, rights
over land may be created by way of or according to governmental
Acts and orders, particularly with respect to planning, zoning and
environmental issues.
4 System of Registration
4.1 Is all land in Iceland required to be registered? What land
(or rights) are unregistered?
As a general rule all land is required to be registered both by size
and registered owner. Real property in Iceland is further divided
into so-called real estate and land numbers and is registered as such.
However, in certain rural areas, as in the centre highlands, large
areas are only registered by owner without precise boundary
limitations.
4.2 Is there a state guarantee of title? What does it
guarantee?
There is no State guarantee as such, but if a person acting in good
faith has relied on a registration that turns out to be wrong, the State
of Iceland may be held liable for any foreseeable loss suffered by
such person as a result thereof.
4.3 What rights in land are compulsory registrable? What (if
any) is the consequence of non-registration?
No rights are compulsorily registrable, but in order to obtain
protection against legal proceedings against the property and in
relation to subsequent bona fide beneficiaries of rights to a real
property, all rights must be registered. Accordingly, the
consequence of non-registration is that earlier rights may be
defeated by later rights, provided that the later rights are registered.
4.4 What rights in land are not required to be registered?
Rights granted by way of or according to judicial or governmental
Acts or orders covering amongst other things statutory liens,
planning, zoning and environmental issues need no registration in
order to be protected against third parties.
4.5 Where there is both unregistered and registered land or
rights is there a probationary period following first
registration or are there perhaps different classes or
qualities of title on first registration? Please give details.
First registration means the occasion upon which
unregistered land or rights are first registered in the
registries.
No, there is no probationary period or different classes of title on
first registration.
4.6 On a land sale, when is title (or ownership) transferred to
the buyer?
Upon the signing of the sale and purchase agreement the buyer
obtains a conditional ownership, which is subject to the fulfilment of
the conditions laid out in the purchase agreement, such as payment of
the purchase price. Upon fulfilment of all conditions under the sale
and purchase agreement, unconditional title passes to the buyer.
4.7 Please briefly describe how some rights obtain priority
over other rights. Do earlier rights defeat later rights?
Yes, under Icelandic law earlier (unregistered) rights defeat later
(unregistered) rights. Once registered, the later right may, however,
defeat the earlier right if the latter has not been duly registered on
the property.
5 The Registry / Registries
5.1 How many real estate registries operate in Iceland? If
more than one please specify their differing rules and
requirements.
There are 25 ordinary district commissioners maintaining Real
Estate Registries (in Icelandic: Þinglýsingabók) and they are all
subject to the same rules and legislation. All registrations of real
estate sale and purchase agreements are made into the Real Estate
Registries as well as mortgage registrations in order to protect the
rights of the respective beneficiaries against legal proceedings
against the property and in relation to subsequent bona fide
beneficiaries of rights to a real property, cf. question 4.3 above.
The Real Estate Registries form a part of a single central Land
Registry (in Icelandic: Landskrá fasteigna) which keeps track of all
real estate and its taxable valuation. No filings for security
purposes are made into this central Land Registry, whereas it
electronically keeps track of and displays filings made at each
district commissioner’s Real Estate Registry. The Land Registry’s
Title and Interest part accurately reflects filings in Real Estate
Registries around the country insofar as concerns urban property,
whereas it is not yet up to date as concerns certain rural properties,
in particular the status of mortgages and encumbrances on rural
property, the reference for which the local Real Estate Registries
need to be relied upon.
5.2 Can information on real estate ownership be accessed
from the registry on line (electronically)?
Information from individual Real Estate Registries can be accessed
on line through the Land Registry. To the extent that the Land
Registry is not accurate with respect to mortgages on certain rural
property, the respective Real Estate Registry needs to be consulted
directly in a non-electronic manner.
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5.3 Can compensation be claimed from the registry/registries if
it/they makes a mistake?
Yes, compensation can be claimed; see the answer to question 4.2.
5.4 Are there restrictions on public access to the register?
Can a buyer obtain all the information he might reasonably
need regarding encumbrances and other rights affecting
real estate?
There are no restrictions regarding public access. In so far as rights
over the property have been duly registered, information thereof is
kept at the Land Registry and a copy thereof is kept with the Real
Estate Registry, and this copy is available to the public.
6 Real Estate Market
6.1 Which parties (in addition to the buyer and seller and the
buyer’s finance provider) would normally be involved in a
real estate transaction in Iceland? Please briefly describe
their roles and/or duties.
a) Selling and purchasing agents (or realtors)
The seller will normally ask a real estate agent to promote the sale
of the property and to find the right buyer who will pay the highest
price for the property.
b) Lawyers
With respect to commercial properties both the seller and the buyer
will usually be represented by their respective lawyers. The same
may apply with respect to some high value private property. The
buyer’s lawyer will typically carry out due diligence investigations
regarding the property and negotiate the terms and conditions of the
sale and purchase agreement with the seller and his lawyer. Further,
the buyer’s lawyer will typically be the one conveying the purchase,
including preparing the deed, registering the deed and arranging the
transfer of the purchase price. The seller’s lawyer will, on the other
hand, represent the seller in all matters mentioned above.
c) Notaries
Notaries are not required to complete a real estate transaction in
Iceland.
d) Others
In connection with carrying out the due diligence, the buyer often
engages technical and environmental experts. In some complex
real estate purchase transactions, the seller or buyer or both of them
may be assisted by separate tax advisers or accountants, advising
them on structuring the transaction in the most tax efficient way.
6.2 How and on what basis are these persons remunerated?
a) Selling and purchasing agents (or realtors)
The real estate agent’s fee is normally paid by the seller and is based
on a percentage of the purchase price. The percentage is negotiable
but is normally on the range of one to two per cent of the purchase
price depending on the value of the property, the complexity of the
transaction and whether the agency is exclusive or not..
b) Lawyers
Normally, the seller and buyer bear the cost of their respective
lawyers, who are paid by the hour and the invoice is made on the
basis of the actual hours spent.
c) Real Estate Registry
The registration fee is calculated as a nominal basic fee plus a stamp
duty of 0.4 per cent of the taxable valuation, except in case of a first
purchase of real estate by individuals, which is exempt from stamp
duty.
7 Liabilities of Buyers and Sellers in Real
Estate Transactions
7.1 What (if any) are the minimum formalities for the sale and
purchase of real estate?
Usually, a real estate transaction in Iceland is completed in two
steps. The sale and purchase agreement is signed first, which
constitutes the legally binding document between the parties
outlining all terms and conditions of the transaction. Secondly, the
deed of conveyance, which is signed by the parties as well, and is
basically an extract of the most important terms and conditions of
the sale and purchase agreement. Neither document is subject to
any formalities apart from being drafted in Icelandic and the
signatures of the seller and buyer being witnessed by two witnesses,
unless the witness is qualified as an attorney or chartered
accountant, then one witness suffices.
7.2 Is the seller under a duty of disclosure? What matters
must be disclosed?
The seller has a duty to disclose all material information regarding
the real estate that he is or ought to be aware of. The seller is not
allowed to retain information regarding the property that would
normally be considered of importance to the buyer, including
information on defects.
7.3 Can the seller be liable to the buyer for misrepresentation?
Yes, if the representation is found to be negligent, the seller may be
held liable.
7.4 Do sellers usually give contractual warranties to the buyer?
What would be the scope of these? What is the function
of warranties (e.g. to apportion risk, to give information)?
Are warranties a substitute for the buyer carrying out his
own diligence?
Yes, usually the seller gives certain warranties to the buyer. The
catalogue of warranties is subject to negotiations but the seller
would typically accept warranties against (i) certain types of
defects; (ii) illegal use of the property; (iii) wrongful calculation of
rental income, if any; and (iv) disputes. Warranties are often
softened up by adding words like “to the best knowledge of the
seller” to the warranty. The purpose of a warranty is basically to
apportion risk, as the seller may be held liable in the case of breach
of the warranty. Warranties are not seen as substitutes for the buyer
carrying out his own due diligence, but the due diligence may be
less comprehensive when there are warranties in place.
7.5 Does the seller warrant its ownership in any way? Please
give details.
The seller rarely gives any express warranty on his ownership,
because of the fact that the seller may be held liable in any event
and regardless of whether or not the seller has acted negligently.
Also, the fact that the Sale and Purchase Agreement is normally not
signed except with a new title and mortgage certificate having been
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calculated as a percentage of rental payments may be charged
against the tenant.
10.5 In what circumstances are business leases usually
terminated (e.g., at expiry, on default, by either party etc.).
Are there any special provisions allowing a tenant to
extend or renew the lease or for either party to be
compensated by the other for any reason on termination?
Business leases terminate on expiration. They are often terminable
after a major casualty or a default which has not been cured after
notice, although the landlord may negotiate other remedies short of
termination. If the situation warrants, the parties may agree that the
lease is terminable at the election of either party with some required
notice and payment of a penalty. Renewal or extension provisions
are usually limited to pre-negotiated extensions as described in
question 10.3.a. Typically, neither party is responsible for
compensating the other upon termination unless there was a default,
the premises were left in a damaged condition, or a party exercised
contractual right of early termination that required payment.
10.6 Does the landlord and/or the tenant of a business lease
cease to be liable for their respective obligations under the
lease once they have sold their interest? Can they be
responsible after the sale in respect of pre-sale non
compliance?
Generally, the landlord is released from post-sale obligations but
not from pre-sale non-compliance, unless under the sale contract
the buyer agrees to assume those obligations as well. Generally, the
tenant is not released from any of its obligations, pre- or post-sale,
unless it negotiates a release with the landlord.
11 Zoning and Environmental Issues
11.1 What are the main laws which govern zoning and related
matters concerning the use and occupation of land?
Please briefly describe them and include environmental
laws. Can the state force land owners to sell land to it? If
so please briefly describe including price mechanism.
Zoning
Zoning is primarily a matter of local law, with city and county codes
and ordinances governing use, land disturbance, development,
building and occupancy permitting, development impact fees, and
historical preservation matters. Certain federal and State laws,
including the Americans with Disabilities Act, also regulate the use,
conservation, construction, and occupancy of land and buildings.
Government can condemn private property for public use, but the
U.S. Constitution prohibits such takings without just compensation.
Environment
Federal laws include: the Clean Water Act (regulating wastewater,
wetlands, and runoff); the Clean Air Act (regulating air emissions,
like refrigerants and asbestos); the Resource Conservation and
Recovery Act (RCRA) (regulating hazardous waste management);
the Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA) (regulating hazardous substance releases
and clean up); and the Endangered Species Act (regulating effects
on endangered animals and plants).
States and local authorities may administer these laws and/or
impose comparable or supplemental laws.
11.2 Which bodies control land/building use and/or occupation
and environmental regulation? How do buyers obtain
reliable information on these matters?
Zoning
Local city and county planning, zoning, and building code
enforcement departments control most use and permitting matters,
but certain State and federal agencies may also play roles. Buyers
hire zoning consultants and lawyers to obtain information on these
matters.
Environment
The U.S. Environmental Protection Agency has primary
jurisdiction, with the U.S. Army Corps of Engineers and the U.S.
Fish and Wildlife Services having jurisdiction over water
bodies/wetlands and endangered species, respectively. Comparable
State and local bodies exist. Many bodies maintain websites with
basic information on regulated activities, and buyers typically retain
environmental attorneys and/or consultants.
11.3 What main permits or licences are required for building
works and/or the use of real estate?
Zoning
Generally, local government agencies issue (i) site plan approvals,
land disturbance permits, and building permits before grading of
land or new development or alteration of structures commences,
and (ii) temporary or permanent certificates of occupancy before a
structure may be occupied for use. Business licenses are required
for office, retail, hotel, industrial and other commercial occupants.
Liquor licences are required for the sale of alcoholic beverages.
Other uses such as agriculture or mining may require additional
permits.
Environment
During development, most properties require stormwater discharge
permits. Other registrations and/or permits may be required if there
is proximity to wetlands, surface waters, endangered species, or
environmentally sensitive areas, or the constructed facilities will
emit large quantities of regulated air pollutants, cause wastewater
and stormwater discharges, store petroleum, or manage hazardous
waste.
11.4 Are building/use permits and licences commonly obtained
in the United States? Can implied permission be obtained
in any way (e.g., by long use)?
Yes, building/use permits are commonly obtained in the United
States.
Implied permission cannot be obtained in any way.
11.5 What is the appropriate cost of building/use permits and
the time involved in obtaining them?
Costs and time vary depending on jurisdiction and complexity.
11.6 In what circumstances (if any) is environmental clean up
ever mandatory?
Federal authorities can mandate clean ups pursuant to laws like
CERCLA and RCRA when hazardous substances are released.
States can impose additional clean up requirements, which may be
more stringent than the federal ones. Some States have specialised
clean up laws that apply when certain property transactions take
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Susan E. Foxworth
King & Spalding LLP
1180 Peachtree Street, NE
Atlanta, GA 30309-3521
USA
Tel: +1 404 572 3525
Fax: +1 404 572 5100
Email: [email protected]
URL: www.kslaw.com
Susan Foxworth is counsel in the Atlanta office and has more than
20 years experience in King & Spalding’s Commercial Real Estate
Practice Group.
Her practice includes a wide range of commercial real estate
transactions, including acquisition, development, leasing,
disposition and financing of office buildings, shopping centers,
industrial properties, apartment projects, hotels and mixed use
developments. She has extensive experience in complex real estate
transactions and related matters involving the acquisition,
disposition and financing of multi-state portfolios of financial and
real estate assets. She also has experience in the workout,
restructure and foreclosure of real estate.
Ms. Foxworth received her J.D., with honors, in 1987 from the
University of Texas, where she also received her B.B.A. in Business
Administration, with highest honours, in 1984. She is a member of
the State Bar of Georgia, the Atlanta Bar Association and the
American Bar Association.
Noah P. Peeters
King & Spalding LLP
1180 Peachtree Street, NE
Atlanta, GA 30309-3521
USA
Tel: +1 404 572 4867
Fax: +1 404 572 5100
Email: [email protected]
URL: www.kslaw.com
Noah Peeters is an associate in the Real Estate Practice in the
Atlanta office of King & Spalding.
Mr. Peeters’ practice focuses on the representation of developers in
complex real estate transactions, the representation of institutional
and foreign investors in structuring real estate equity investments
and the representation of developers, investors and owners in
connection with the acquisition, financing and sale of real estate
assets. Mr. Peeters has represented these clients in the office,
apartment, condominium, industrial and medical sectors both in the
Southeast and nationwide.
Mr. Peeters graduated, magna cum laude, with honours from
Williams College, with a degree in art and coursework in
architecture and planning. He received his Juris Doctor degree,
summa cum laude, from the University of Georgia Law School,
where he was valedictorian of his class, a member of the Order of
the Coif, and an Articles Editor for the University of Georgia Law
Review. Prior to entering law school, Mr. Peeters was an associate
producer with the CNN News Network in Atlanta, where he worked
on documentary and long-form programming for primetime
television. Mr. Peeters was named a “Georgia Rising Star” in 2006
and 2009 by Law & Politics, a legal industry publisher.
King & Spalding is a full-service international law firm with more than 880 lawyers and offices in Abu Dhabi, Atlanta,
Austin, Charlotte, Dubai, Frankfurt, Houston, London, New York, Riyadh (affiliated office), San Francisco, Silicon Valley
and Washington, D.C. King & Spalding represents clients from the United States and abroad, including half of the
Fortune 100.
The Real Estate Practice Group, together with other attorneys in the firm whose practices are heavily committed to the
firm’s real estate clients, provides experienced and sophisticated advice with respect to the complete range of
commercial real estate transactions. Over 75 lawyers in the firm’s Abu Dhabi, Atlanta, Charlotte, Dubai, Frankfurt,
Houston, New York and San Francisco offices are actively engaged in this practice representing some of the world’s
largest financial institutions, institutional investors, pension funds, investment advisors, asset managers, real estate
investment trusts and developers. www.kslaw.com
King & Spalding LLP USA
place. Accordingly, the required clean up can vary based on the
property’s location and use, the nature of the release, the applicable
standards, and the investigation and clean up approach employed by
the relevant bodies.
11.7 Please briefly outline any regulatory requirements for the
assessment and management of the energy performance of
buildings in the United States.
Many States have enacted energy performance standards based on
the International Energy Conservation Code, and an increasing
number of builders are participating in the voluntary LEED
Certification programme and other developing industry standards.
12 General
12.1 Are there any current proposals for significant reform of
real estate law in the United States - please give details.
The federal government passed the Emergency Economic
Stabilization Act of 2008 in response to the subprime mortgage
crisis. The Act and the Troubled Asset Relief Program it created
(“TARP”), are intended to stabilise the credit markets and improve
liquidity. While the TARP has primarily focused on the financial
sector and residential real estate, there is significant lobbying
underway to expand it include assistance for commercial real estate.
12.2 Date at which law is stated
January 2009.
