Transfer of property in Polish law - PowerPoint Presentation

Slide1

Transfer of property in Polish law - between German and French legal tradition

Prof. Jerzy

Pisulinski

Jagiellonian

University

KrakowSlide2

Real rights in Polish law

The main act which regulates the private law relationships is the Civil Code of 23 April 1964 (with many amendments).

The ownership and other real rights are regulated mainly by the Civil Code.

The book II

of CC

on property rights is based

on the

principle

of

numerus clausus

and

it contains

the

provisions on

:

-

ownership (substance and exercise of ownership right, acquisition and loss of ownership, co-ownership, protection of ownership)

-

perpetual

usufruct

-

limited

property rights (general rules, usufruct, servitudes, pledge)

-

Possession

(

possession is not

a

subjective

right

).

Moreover there are many separate act which regulate specific

real

rights

as

:

Ownership of Flats Act of 1994

(

ownership of apartment

)

; Property Rights Register and Mortgage Act of 1982

(

mortgage

)

; Register of Pledge and Non-possessory Pledge Act of 1996

(

register pledge

),

Act on Some Financial Securities

of 2004

(

financial pledge

). Slide3

The object of a property right

The object of a property right is a „thing”. Under the Polish law only corporeal objects are considered “things” (see art. 45 CC). It is recognized that the latter constitutes “corporeal parts of nature” in an original or a man-processed form that is independent, i.e. “separate to the extent enabling their treatment as independent goods”. The Civil Code defines only the immovable property.

According to

Art. 46 § 1 of CC part

of the earth's surface constituting a separate object of ownership (land) as well as buildings permanently attached to land or parts of such buildings if on the basis of specific provisions they constitute an object of ownership separate from land, shall be immovable property

.

Therefore, each object that is not an immovable, should be considered a movable asset.Slide4

The roots of the concept on transfer of property in Polish law

The concept on transfer of property in Polish CC is based generally on the French legal tradition. It is not amazing because the French Civil Code was in force in Poland from 18

08

t

o

194

6 (

it was implemented as

the

main civil law in the Duchy of Warsaw

and

remained to

the

unification of Polish rights

in

rem

by the

decree on Property

Law of 1946)

. From 1900 to 1946 the German Civil Code (BGB) was also

in force in

the

western part of

Poland

so its concepts influenced to the work on the unification of Polish

law.

Third legal system was the Austrian one because the Austrian Civil Code

(ABGB)

was introduced in southern part of Poland in 1812 and remained

to 1946.

The French rules on transfer of property were

recognized as less

complicated and better

understanding by the

ordinary people

than German solution

.

The French system is the most popular

in

and

outside of Europe

(

many other legal systems are based on the same rules

).

Only few countries

have followed the German concept

s

on distinction

between

the

obligation and dispose contract (

die Trennung des Verpflichtungsgeschäfts vom Verfügungsgeschäft

,

so called

Trennungsprin

z

ip

) and abstract transfer of

the

ownership (

die Unabhängigkeit des Verfügungsgeschäfts vom Bestehen des Rechtsgrundsatzes

,

so called

Abstraktionsprin

z

ip

).

Slide5

Consensual system

With regard

to

transfer

of

ownership

the

Polish law

follows

in

general a consensual system (default rule).

The

mere

contract is

require

d

to transfer the ownership

.

This rule refers to

the

things determinable by their identity. In such a case, the effect of the transfer of ownership occurs at the moment of the conclusion of an appropriate obligatory contract (e.g. sale, change, donation), unless the parties agree otherwise

(Art. 155 § 1 CC)

.

The delivery is not required

(

in opposition to the German system

-

see §

9

29 BGB –

where the requirement

of

delivery aims at

the conformity of possession and ownership

)

.

In opposition to the French law in which the

solo

consensu

principle is only fully effective between the parties to a contract and with respect to third parties the possession of transferred thing is necessary the Polish law does not distinguish the effects of the contract between the parties

to

a contract and third persons (the passing of ownership is effective

erga

omnes

without the delivery)

.

Only if the generic

or future things are the subject

s

of the contract the transfer of possession is necessary

(

the contract is not sufficient to determine the object

s

of the

transferred ownership

). The

Polish CC provides different modes

of the transfer of

possession

(

traditio

,

longa

manu

traditio

,

bervi

manu

traditio

,

constitutum

possessorium

).

All these modes

may be used to

transfer of

possession serving

to

identification

of

things

which are the objects

of the

transferred

ownership

.

Slide6

Consensual system

In the case of transfer of immovable

the

entry in

the land and

mortgage register is not required in order to pass the ownership to the acquirer

(

in opposition to the German system

–

see § 873 BGB

–

where the entry in the register of immovable

s

is constitutive

).

However the public notary

has to prepare the application

of

an entry in the land

and

mortgage register

. It

means that the entry is compulsory

but

it does not affect the effectiveness of the contract transferring the ownership.

Similar to the German system (see § 925 BGB) the Polish

law

does not allow to transfer the ownership of immovable under the condition

(

suspensory

or

resolutive

)

or time limitation

(Art. 157 § 1 CC).

In opposition to French system

(

see Art

. 1599

Code

Napoleon – the

sale contract of thing which

belong

s

to

third party

is void

)

the obligation contract is effective if the transferred thing is not yet owned by the transferor

(

the ownership may pass to the acquirer under specific conditions provided by the law if the acquirer concludes the contract in good faith

).

T

he Polish law admits the possibility of an obligation to dispose of a future, non-existing thing (such obligation is valid but there are different views whether in such

a

case the real agreement is required for the transfer

of

ownership

)

.

Slide7

The role of real agreement

The Polish

law

does not require to conclude a real agreement which transfers an ownership

.

So in

the

Polish law does not exist the German principle

of

distinction

between

the

obligation and dispose contract

.

Generally the contract which undertakes

the

transfer

of

ownership has so called double effects: it creates the obligation to transfer the ownership and passing

the ownership to the acquirer

.

This is a default rule. It means that the parties to the contract may agree otherwise and the contract creates only the obligation. In such

a

case the second contract (so called real agreement) is required

i

n order to transfer the ownership

.

This is a difference to the French system which does not know such agreement

and

it approaches the Polish system to the German one

.

In the literature some theories are presented in o

r

der to explain the phenomena of double effects of the contract transferring the ownership

.

Two concepts are important. According to the first

,

the real effect of the obligation contract takes place by virtue of the law

.

The second concept assumes that the parties express the will to transfer the ownership at the same time when they conclude the obligation contract

.

So one legal transaction is directed towards causing two effects: an obligatory and a real effect

. Slide8

Causal system

According to the French law if the contract which underlies the transfer

of

ownership

is void the transfer of property is also void

ab initio

.

This rule is obvious if

the

ownership is transferred based

on one (

unique

)

contract

.

If the acquisition of ownership is based on two contracts (obligation and dispose contract) the question is whether the dispose contract

(

real agreement

)

is valid if the obligation to transfer

the ownership does not exist

.

According to German solution the non existence of the obligation does not affect the transfer of ownership if the dispose contract is valid

.

In opposition to this system the Polish law follows the French model. If the transfer of ownership is based on one contract with double (obligation and real) effects and such contract is void the contract causes any effect

.

S

o the transfer of ownership is void as well.

If the transfer of ownership is based on the dispose contract which fulfils the obligation

arising from previously contract or other event creating an obligation to transfer the ownership

the validity of dispose contract depends on the existence of obligation to transfer the ownership (Art. 156 CC).

This is a causal rule in

the

substantive sense

.

In the formal sense causal is the dispose contract transferring the ownership of immovable in o

r

der to fulfil the obligation. Such obligation should be mentioned in this contract

(Art. 158 CC)

otherwise the contract is void

.

Slide9

The impact of dropping the obligation on the real effect of the contract

There are many opinions in respect of what effect has

the

avoidance of a contract or

the

termination (withdrawal)

of

a contract or

the

dissolution of a contract with regard to transfer of the ownership

(

Wegfall der Geschäftsgrundlage

).

The fundamental problem relates to the question whether the lapse of an obligatory

contract

(e.g. because of the

withdrawal from the

contract) causes

ex

lege

the collapse of a real effect or merely creates a disposition of transfer back to the transferor on the part of the purchaser. This issue has been solved differently in jurisprudence

of the

Polish Supreme Court

with

respect to movables

and

immovable

s

(

the decisions of a bench of seven judges

of

30 November 1994 and of 27 February 2003), despite the fact that

the provision on

the

withdrawal of contract regulates

the

effect of withdrawal regardless

of

categories

of things

which

are

objects of contract transferring

the

ownership

.

According to Art. 494 § 1 CC the party who has withdrawn from the reciprocal contract (e.g. sale contract)

is obliged to return to the other party all that it received from the latter under the contract and the other party is obliged to accept the same. The party may demand

not

only all that it provided

as performance but

also

the

compensation

of

any damage caused by non-performance of the obligation be remedied

. Slide10

The impact of dropping the obligation on the real effect of the contract

Generally two views are presented however these views are differently justified

.

The justification does not depend on the opinion whether the withdrawal of

a

contract has retroactive effect (

ex

tunc

) or not (

ex

nunc

) because if the withdrawal has retroactive effect some authors represent the view that the withdrawal does not affect the real effect of reciprocal

contract

(

e.g.

sale contract

)

and it creates only the obligation to transfer back the ownership

(

this concept is called as

a

limited causal theory

)

. According

to

the first view in the case of withdrawal the ownership is transferred automatically (

ex

lege

) to the transferor because of lapse

of

the obligation

to transfer the ownership (

causa

)

.

In pursuance of second view the obligation to transfer the ownership existed at the time of conclusion of the contract so in the case of later

lapse of this obligation it

does not affect the real effect of the contract.

The acquirer is only obliged to transfer back the ownership to the transferor.

Other authors argue that the withdrawal has only effect

ex

nunc

so it creates the obligation to return the property

.

The Supreme Court explains with regard to the withdrawal of

a

contract transferring the immovable that the withdrawal creates only obligation because of the existence of obstacles, not specified, in

automatic

transfer

of

the ownership

.

This solution provides the legal security

.

But in the case of withdrawal of a contract transferring movable the withdrawal has real effect so the transferor become

ex

lege

a

n

owner

.

The Supreme Court says that this solution is less complicated than mentioned

solution

in the case of immovable

and there is not any obstacle in automatic transfer of the ownership.

Slide11

The impact of dropping the obligation on the real effect of the contract

In the German law the withdrawal of a contract (§ 323 BGB

Rücktritt vom Vertrag

) has any influence to the transfer of ownership („

Mit dem Rücktritt fällt nicht etwa das Eigentum automatisch zurück

”,

W. Fikentscher, A. Heinemann, Schuldrecht

, 2006, S. 272).

In

the French law the termination of a contract is made

generally

by the

judicial decision

(

Art. 1184 last sentence

of the

Code

Napoleon),

not by the notice of entitled

party (creditor

)

as in Germany or Poland

.

The termination of a contract because of non-performance has similar effect as in the case of impossibility

(

la

résolution

produit le même effet réctroactif que la nullité

)

.

It means that the contract is deemed as it would not be concluded

. S

o

the court’s decision causes

automatically

the

transfer of ownership to the

transferor

(

strictly the transferor did not lose the property

).

The acquirer must return the property received to its former owner

(

transferor

)

.

The same rules apply when the contract is declared void by the court

.