THE PRINCIPLE OF RELIANCE ON REAL ESTATE RECORDS AND ACQUISITION OF OWNERSHIP BY USUCAPIO ON IMMOVABLES - Part Two

Abstract

Usucapio (acquisitive prescription or adverse possession) ultimately brings the factual and legal situation in accord by “turning” a long-term possession that was incompatible with ownership into legal ownership (title to property). The former owner loses the right of ownership whereas the possessor becomes the new owner, thus acquiring the right of possession and other ownership entitlements. Usucapio also terminates other third-party rights on the object of acquisition, provided that the person who acquires ownership by prescription acted in good faith (bona fides) regarding the presence of those rights. However, due to the principle of reliance on real estate records in land registry or real estate cadastre, some legislations limit the effect of usucapio in relation to a bona fide acquirer of ownership from the registered owner who alienated the immovable property before the registration of acquisition by usucapio, or before entering a note on pending ownership dispute into real estate records. Referring to the principle of reliance, the bona fide acquirer of ownership or another right becomes the legal owner (mortgage creditor, etc.), while the usucapio possessor loses his ownership acquired through prescription. When considering the two competing principles: the principle of reliance on real estate records and the principle that “no one can transfer more rights to another than he himself has” (Lat. Nemo plus iuris ad alium transferre potest quam ipse habet), recent legislation and judicial practice has given priority to the principle of reliance on real estate records as the fundamental principle in cadastral or land registry record-keeping, particularly in view of the increasing accuracy of real estate records and the importance of security of legal transactions. Yet, the vital corrective to the principle of reliance is the conscientious (bona fide) conduct of the acquirer. The assessment of conscientiousness must include a check on the ownership status in cadastral records, as well as the examination of all other ownership-related facts that may not be registered in case there is a discrepancy between the registered and unregistered owner status. In this paper, the author analyzes the fairness of the legal solution that usucapio shall take effect only towards the current owner but not towards third conscientious acquirers, the possibility of abuse of the principle of reliance by the registered owner and the fact that the conscientiousness of the acquirer is assessed only on the basis of verification of the registered status, the need to check the status of unregistered immovable property during the purchase in order to preserve the conscientiousness of the acquisition, etc.