The legal status of real estate is the most important thing that needs to be checked before buying a house, plot or flat. The unregulated legal status of the real estate can then be a source of serious problems, and above all, it will make it difficult to finalize the transaction. Find out what exactly is the legal status of a property and how to check it. What you will learn in this article:
What documents define the legal status of the real estate?
Legal status of real estate - how to check?
Unregulated legal status of real estate - what should be understood by this?
What is the difference between the legal status of real estate and the actual state?
When will we need the legal status of the property?
Checking the legal status of the property is especially important when applying for a mortgage to finance its purchase. No bank will grant a loan for real estate with unregulated legal status.
There is no clear definition of the legal status of real estate in Polish regulations. However, it can be formulated on the basis of selected regulations, e.g. those included in the Act of August 21, 1997 on real estate management, or the Act of July 6, 1982 on land and mortgage registers and mortgage.
According to the above-mentioned legal acts, the legal status of real estate can be defined primarily as all the rights it is entitled to. The most important of these is the right to property, but it can also be the right to rent or lease.
In a broader sense, the legal status of real estate is also determined by all legal acts and court rulings or administrative decisions that affect the possibility of its acquisition, development or use.
Therefore, it is not difficult to guess that the legal status of real estate is determined on the basis of the documents that have been prepared for it and from which all rights and claims are derived from it.
If you want to check the legal status of a property before you buy it, you need to review a lot of documents. The most important of them is the land and mortgage register, in which all rights and claims regarding a given property should be entered.
Other types of documents determining the legal status of the real estate include: an excerpt from the land register and an excerpt from the cadastral map, Local Development Plan, certificates from local offices on whether the real estate is under monument or nature protection, a certificate from the population register on whether there is someone registered in the apartment or, finally, a certificate from the housing cooperative that there is no debt.
Pursuant to Article 1.1 of the Act on land and mortgage registers and mortgage, the land and mortgage registers are kept precisely for the purpose of establishing the legal status of real estate. Therefore, it is the basic source of knowledge about its legal situation, which is also checked by the bank before granting a mortgage. From the land and mortgage register you can find out, among others:
from chapter I - what are the basic parameters of the real estate (its location, area, plot number, etc.);
from chapter II - who is the owner of the property (if there are several co-owners, what share in it) or who has the right of perpetual usufruct to it;
from chapter III - what are the charges on real estate for third parties, e.g. land or transmission easement, usufruct or life annuity; this section also includes claims resulting from, for example, a developer agreement or a preliminary real estate sale agreement, and bailiffs;
from chapter IV - whether the property is encumbered with entries on the mortgage (if so, who is the creditor, the amount of the liability secured by the mortgage, etc.).
It is worth emphasizing that the legal situation of a flat or plot is specified in the list of land and mortgage registers and other documents specifying the legal status of the real estate. However, it is entries in the land and mortgage register that are prioritized due to the so-called a guarantee of public faith in the land and mortgage registers, which we will explain in more detail below.
Before purchasing the property, it is also worth checking the excerpt from the land register and an excerpt from the cadastral map. This document contains information, inter alia, on the location of the property, its area and boundaries, as well as the number of the land register and the owner. These data should coincide with the data appearing in the land and mortgage register.
The Local Development Plan is an act of local law, which specifies the purpose of the real estate in a given area. It should be checked, in particular, when purchasing a plot of land for building a house, because it allows you to find out how the land can be developed, and even what building can be erected on it.
It may turn out that building a house will not be possible at all due to the fact that the area is forest or agricultural land.
When planning to buy a flat on the secondary market, it is worth making sure that its owner provides us with a certificate from a housing cooperative about the lack of debt due to rent and other service charges before concluding a purchase and sale agreement.
Banks, as a rule, do not require a mortgage when granting a mortgage, but it is important for the future buyer of the property. It is true that, according to the regulations, the buyer of an apartment is not responsible for the debts of its previous owner, but in practice many cooperatives try to pursue such claims from buyers, who then have to hire lawyers to defend their rights.
By the way, it is worth remembering to confirm in the population register who is registered in the premises and request the seller to check out all persons before the sale of the property.
Many people planning to buy a flat, plot or house wonder where and how to check the legal status of the property. First of all, it is worth being aware of what is the legal status of a real estate - in fact, it is nothing more than obtaining and reviewing all the documents that relate to it and that affect its legal situation.
First, you should check the land and mortgage register of the real estate - you can even do it online, but you need to know the KW number (it is best to get it from the seller). Depending on the type of real estate purchased, it is also worth checking other documents confirming its legal status.
For example, when planning to buy a building plot, you need to visit the commune office to read the Local Development Plan, and obtain an excerpt from the land register and an excerpt from the cadastral map from the Government .
Determining the legal status of real estate should also consist in comparing the information contained in individual documents, as it may turn out that some of them do not agree. Contrary to appearances, it happens quite often, as well as the problem with obtaining all the documents.
In this context, checking the legal status of real estate is sometimes worth entrusting to a specialist. Real estate agencies and law firms deal with this professionally, and sometimes even offer a specialized service in the form of real estate audits (also known as real estate due diligence).
The exact definition of the unregulated legal status of real estate has been specified in the Act of August 21, 1997 on real estate management. Pursuant to Art. 113, it should be understood as a state in which, due to the lack of a land register or other documents, it is not possible to determine the persons who are entitled to real property rights.
The unregulated legal status of real estate in practice blocks the possibility of its purchase (especially on credit), also by inheritance or donation. Even if you manage to buy such a property, it can later be a source of many problems for the new owner, so you should settle its legal status beforehand.
Settlement of the legal status of real estate may require various actions, depending on the situation. You may need, for example:
establishing a land and mortgage register for real estate,
updating entries appearing in the land and mortgage register,
conducting the inheritance case.
In the case of updating data in the land and mortgage register, it is usually enough to submit an appropriate application for entry in the KW and attach relevant documents to it. However, this must be done by the property owner. In more complex cases, it is necessary to conduct court proceedings, i.e., for example, to submit a lawsuit to reconcile the content of the land and mortgage register with the actual legal status.
It is also worth knowing that the regulation of the legal status of real estate owned by the State Treasury and those belonging to local governments is the responsibility of officials who should do so pursuant to the Act of 7 September 2007 on Disclosure of Ownership of the State Treasury and Local Government Units in the Land and Mortgage Registers. Therefore, if you want to buy, for example, a plot of land from a commune that does not have a regulated legal status, you should ask for it to be regulated at the local office.
Entries appearing in the land and mortgage register are treated as those reflecting the actual legal status of the real estate. However, it may differ from the actual one, for example if no rights against third parties are disclosed in the land and mortgage register.
Then, the person who purchased such real estate and was not aware of the existence of the actual rights encumbering it, does not have to worry about them - this is how the warranty of the land and mortgage register works, which places the entries in the Land and Mortgage Register over the actual state.
Unfortunately, it is not always possible to rely on the warranty - for example, when you were aware of the applicable rights (or you could easily find out about them), or when applications for their entry in the register have already been submitted.
Verifying the legal status of real estate is necessary, first of all, when planning its acquisition. Before the purchase transaction, the bank will want to get to know him, before granting us a mortgage and will certainly refuse to grant it if the real estate is in an unregulated legal status, i.e. it will not have a land and mortgage register.
Due to the unregulated legal status, it may also be difficult to finalize the real estate purchase transaction from a notary public.
It is worth explaining here whether the notary checks the legal status of the property. Well, this is not his responsibility, but if the documents presented to him for the notarial deed raise his doubts, he has the right to refuse to provide the service.
Remember that if you have any doubts, I am happy to offer you advice and assistance. Let's meet, you will find that my help in choosing the best mortgage can be invaluable.
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Mortgage broker
Michal Kaplon
os.Stefana Batorego 80
60-687 Poznan
Strona www stworzona w kreatorze WebWave.