Case 8 - Sale without Registration

Summary

Jan is the owner of a piece of land. He sells it to Svetlana and they observe all formalities with respect to a contract of sale. Svetlana pays the full purchase price to Jan and starts living on the land. Jan and Svetlana do not make an effort to register the transaction with respect to the land. Svetlana lives on the land for 30 years. Jan is declared bankrupt. Sean buys the land and the bankruptcy trustee and he observe all formalities required for a transfer. Sean institutes proceedings to eject Svetlana from the land.

KEY ISSUES

This case introduces different issues, depending on the respective jurisdiction. Where registration is not required for a valid transfer of land, it raises the issue of whether the unregistered transfer can be invoked as against third-party purchasers and, if not, whether rights acquired through long-term use would prevail against the third party. Where registration is required, the case raises the questions of whether long-term use may heal this defect and whether rights acquired through long-term use would prevail against the third party.

ALBERTA, CANADA

The contract for the sale of the land is binding as between Jan and Svetlana; even an oral agreement may suffice if Svetlana paid the purchase price and took possession. However, under Alberta’s Torrens system, in the absence of registration the purchase agreement can only confer on Svetlana equitable title, which is not binding on a good faith purchaser for value. If Sean is a good faith purchaser for value, he takes good title notwithstanding Svetlana’s unregistered equitable and possessory interest (see the General Introduction, especially text accompanying notes 17–21). Further, upon acquiring title, Sean becomes entitled to a ten-year limitation action to commence action to recover possession against Svetlana. Sean’s legal action in this case appears timely and should succeed

BELGIUM

Irrelevance of registration. No need for registration exists between the parties to a sale or other transfer. Article 1 of the Loi hypothé caire (Law on Hypothecs; new Art. 3.30 BCC) protects only third parties with a concurrent right (essentially a property right that would be threatened by the contract, for instance the right of a second buyer). Svetlana has therefore acquired the piece of land by buying it.