The ownership right to an immovable object entered in a public register is acquired by entry in such a register, when this entry has a fundamentally constitutive character. The effects of the deposit of ownership rights occur retroactively. This construct was reflected in the legislation before the recodification of private law1 and it is included in it even now, only specified in such a way that the date of submission of the proposal is no longer decisive, but its moment recorded by the time data on the delivery of the proposal with accuracy to the minute.2
Together with the acquisition of the ownership right, the new owner also acquires the rights and obligations associated with the thing, as well as defects connected to the immovable property.3 This is a manifestation of the principle of uniform transfer of ownership rights, i.e. legal succession ex lege4. The moment at which the property rights pass to the new owner is clearly given. It is more complicated with other rights and obligations associated with the transferred real estate. Between the submission of the application for the deposit of the ownership right in the real estate cadastre and the decision on the application, many situations may arise that will need to be solved operatively, from damage events, through the payment of rent to tax obligations. The interim period can be quite long in the event of interruption of the cadastral proceedings due to a conflict of validity of the transfer contract. Below we will focus on some issues that the transferor and the transferee can deal with in the interim.
The first point is the question transfer of risk of damage to property. The parties to the transfer contract can first of all agree on the moment of handing over the immovable property. If they do, the risk of damage to the property passes to the purchaser from the agreed time, regardless of whether the property is actually handed over.5 However, the law does not give explicit instructions on how to proceed in the absence of such an agreement. In our opinion, it will be necessary to proceed using the general provisions on purchase, specifically the provisions of § 2121 of the Civil Code6, according to which to the buyer the risk of damage to the object passes upon taking it over, or from the moment when the seller has allowed the buyer to dispose of the immovable object.
The second question is distribution of fruits and benefits. If the parties have agreed on the time of handover of the immovable object, the fruits and benefits of the immovable property also belong to the transferee from the agreed time of takeover.7 In the matter of the benefits of immovable property, it is necessary to proceed using the general regulation of the purchase contract, specifically the ustan. § 2082 of the Civil Code, as there is no special regulation. According to this provision, in case the buyer acquires the right of ownership before handing over the item, the seller has the status of custodian until the moment of handing over the item to the buyer. With regard to the nature of the deposit procedure, there will usually be situations where the transferee (buyer) acquires the right of ownership before handing over the immovable object, because the acquisition of the right of ownership will be decided with retroactive effects. The transferor, as a custodian, has the duty to take care of the immovable object with due care and to prevent the occurrence of damage. His position is different from that of the administrator of the matter in the sense of the ustan. § 1400 an. ObčZ, these provisions do not apply to custody, and the custodian thus has fundamentally less authority when dealing with immovable property than he would have as its administrator.8 When handing over the immovable thing (or after allowing the buyer to dispose of the immovable thing), what has been added to the immovable thing should also be given to the buyer, in this case its fruits (e.g. agricultural products) and benefits (rent).9 Rent is issued only to the extent of receivables incurred (not payable) after the date of submission of the proposal for the deposit of the ownership right in the real estate cadastre. Similarly, the right to compensation for damage goes to the burden (or benefit) of the transferor only if it arose before the submission of the application for the deposit of the ownership right in the real estate cadastre. The keeper is entitled to compensation for the costs incurred in the care of the item. However, he is entitled to remuneration only in usual cases, so this claim will have to be assessed ad hoc.
The above-mentioned settlement procedures correspond to the general principle that part of the right of ownership is also the right to the fruits and benefits of the thing. On the contrary, stop. § 2130 of the Civil Code deviates from this general principle, as it grants the right to fruits and benefits to the original owner of the thing even during the period when he is no longer the owner, but the immovable thing has not yet been handed over.
The question of the retroactive effects of the deposit of property rights is also interesting from tax and accountant's point of view.
The regulations governing bookkeeping stipulate that immovable property registered in the real estate cadastre must be accounted for by the new owner as of the date of submission of the application for the deposit of the ownership right to the relevant cadastral office. Until the decision on the deposit of the ownership right to the immovable object in question is reflected, the possibility that the proposal will not be granted in the proceedings and the transfer of the ownership right will not occur, and the conditionality of the acquisition of legal effects of the deposit in the real estate cadastre will be stated in the analytical accounts, in the inventory lists and in the annex to the financial statements.10
The issue of VAT is solved completely independently of the moment of acquisition of the ownership right. The date of handover of the immovable property to the transferee for use or the date of delivery of the notification stating the date of registration of the change of ownership is decisive, depending on which of these days comes first.11
In the case of income tax, the prevailing opinion is that the moment of depositing the ownership right in the real estate cadastre is essential. Determining the decisive moment is only relevant in cases where the proposal for the deposit is submitted before 31 December, but the decision on the proposal will not be made until the following year.
Finally, the immovable property tax also contains a special legal regulation, where the taxpayer is the owner of the immovable property, as of January 1 of the given calendar year.12 At the same time, however, it also applies that if a decision was not made on its permission by December 31 of the year in which the application for the deposit of the ownership right was submitted to the real estate cadastre, which gives rise to this right, the taxpayer is obliged for the immovable object that was the subject of the deposit of the ownership right , file a tax return no later than the end of the third calendar month following the calendar month in which the deposit of ownership rights was entered in the real estate cadastre. The taxpayer submits the tax return for the tax period following the year in which the legal effects of the deposit arose.13
As it follows from the described situations and individual legal regulations, the legal regulations are definitely not uniform in how they approach the peculiarity called "retroactive effects of depositing ownership rights to immovable property". Ambiguity, lack of clarity and inconsistency in the solution of this issue usually do not cause difficulties, as the deposit procedure usually lasts around 25-30 days and it is not necessary to think more deeply about what rights the transferor has and what the transferee has. However, in exceptional cases of longer-lasting transfers, considerable legal uncertainty arises both on the part of the transferor and the transferee.
Source: epravo
The team of the Vych & Partners, s.r.o. law office
Comments:
[1] See ustan. § 2 paragraph 3 of Act no. 265/1992 Coll., on registration of ownership and other material rights to real estate.
[2] See ustan. § 10 of the Act No. 256/2013 b., on the real estate cadastre (cadastral law)
[3] See ustan. § 1105 to §1107 of the Act C. 89/2012 Coll., Civil Code, as amended (hereinafter referred to as "Civil Code")
[4] VOLUNTEER, Eva. § 1106 [Consequences of acquisition of ownership]. In: SPÁČIL, Jiří, DOBROVOLNÁ, Eva, HANDRLICA, Jakub, HOLEJŠOVSKÝ, Josef, HORÁK, Tomáš, HRABÁNEK, Dušan, KRÁLÍK, Michal, LASÁK, Jan, NOVOTNÝ, Marek, PETR, Bohuslav, PIHERA, Vlastimil, RICHTER, Tomáš, VRZALOVA, Lenka. Civil Code III. Real rights (§ 976–1474). 1st edition. Prague: CH Beck Publishing House, 2013, p. 356.
[5] See ustan. § 2130 of the Civil Code
[6] See ustan. § 2131 of the Civil Code
[7] See ustan. § 2130 of the Civil Code
[8] See PIHERA, Vlastimil. § 1400 [Definition of the administration of another's property]. In: SPÁČIL, Jiří, DOBROVOLNÁ, Eva, HANDRLICA, Jakub, HOLEJŠOVSKÝ, Josef, HORÁK, Tomáš, HRABÁNEK, Dušan, KRÁLÍK, Michal, LASÁK, Jan, NOVOTNÝ, Marek, PETR, Bohuslav, PIHERA, Vlastimil, RICHTER, Tomáš, VRZALOVA, Lenka. Civil Code III. Real rights (§ 976–1474). 1st edition. Prague: CH Beck Publishing House, 2013, p. 1152.
[9] See ustan. § 2403 of the Civil Code
[10] See ustan. § 56 paragraph 10 of Decree no. 500/2002 Coll., which implements some provisions of Act no. 563/1991 Coll., on accounting: "When transferring ownership of real estate that is subject to deposit in the real estate cadastre, the real estate is accounted for on the date of delivery of the deposit proposal to the cadastral office. The conditions for the acquisition of legal effects of the deposit in the real estate cadastre shall be stated in the analytical accounts, in the inventory lists and in the annex to the financial statement.
[11] See ustan. § 21 paragraph 2 of the Act C. 235/2004 Coll., on value added tax, as amended
[12] See ustan. § 2, § 8 and § 13b of Act. C. 338/1992 Coll., on real estate tax, as amended
[13] See ustan. § 13a paragraph 11 of the Act C. 338/1992 Coll., on real estate tax, as amended
