Essential Guidelines for Land Register Entries in Liechtenstein

Josef Bergt

2023

Introduction

In the realm of property law and transactions, the intricacies of legal documentation and registration can often present complex challenges. This article aims to dissect and elucidate the critical aspects of real estate registration in the Liechtenstein land register, with an emphasis on facilitating understanding for legal practitioners and property owners alike.

General Overview and Legal Framework

The act of registering property rights in Liechtenstein is governed by the Land Register Ordinance or in German “Grundbuchverordnung” (GBV) (Articles 33-42) and the Liechtenstein property law or in German “Sachenrecht” (SR) (Articles 542 et seqq.). This process is applicable to transactions that are required to be registered and also to those initiated ex officio, such as corrections, deletions, and creation of replacement documents. A deviation from the principle of registration (Article 33 (1) GBV) is permissible only in exceptional cases explicitly provided by law.

Typically, the property owner, who holds the right to dispose of the property, must initiate the registration application. The submission involves a formal request to record a particular right or transaction in the land register. The Office of Justice – Land Registry Department, as the competent authority, is mandated not to refuse the acceptance and recording of such applications.

For a registration to be effected, it must satisfy three prerequisites: the existence of an application, proof of the right to dispose of the property, and evidence of the legal basis for the registration (Article 544 SR). Should these conditions not be met, the Office of Justice, after thorough examination, may refuse the registration and dismiss the application, potentially incurring fees.

Contents and Form of Application

The application for registration must be:

• Clear, unambiguous, and comprehensive regarding the right to be registered.
• Unconditional and without reservations.
• Specific about each right to be registered, listed individually.
• Ordered correctly if multiple applications are submitted simultaneously.
• Potentially linked, specifying that one registration should not proceed without the other.

Applications, even when transmitted electronically, are considered written if they bear a secure electronic signature as per the Electronic Signature Act. In cases where the application is not signed in person at the Office of Justice, an official authentication of the signature is required. If this authentication occurs abroad, the Office of Justice – Land Registry Department may request super-certification or an apostille in case of doubts (Article 35 GBV).

Documentation for Application

The documentation must include specific information about the acquirer:

• For natural persons: Name, first names, date of birth, place of residence, residential address, nationality, and marital status or registered partnership status.
• For legal entities and associations: Company or name, location, legal form (if not evident from the name or company), and registration number along with the registering authority. Proof of legal existence (e.g., commercial register extract, official confirmation, cooperative or association statutes) is required when acquiring a real right or a registrable right.
• For other partnerships and communities with joint ownership, details of involved individuals as per the above criteria are needed.

Additionally, necessary permissions or consents should accompany the application, or evidence must be provided that the registered right does not require such approvals.

Registration in the Journal

The process of application for property registration in the land registry is intrinsically linked to the function of the journal (Tagebuch). This registration process is initiated by inscribing the application in the journal. Each application, deemed complete, is marked upon receipt by the Office of Justice – Land Registry Department with an entry note. This note includes a unique order number, the document book number, and the receipt number, along with the date and precise time of receipt, the names and residential or business addresses of the applicants, a summary of the requested main book entry, and a description of the affected properties. These details are meticulously recorded in the journal. In cases where a procedure is initiated ex officio, a receipt documenting this initiation must be created immediately (Article 56 GBV).

Review by the Office of Justice

Upon receiving an application, the Office of Justice – Land Registry Department is responsible for verifying whether the legal prerequisites for registration are met. This verification is based on the documents submitted with the application and includes several checks (Article 58 (2) GBV):

• Assessing the form and content of the application.
• Confirming the identity of the applicant.
• Verifying the applicant's right to dispose of the property (Article 59).
• In cases where a representative submits the application, examining the power of representation.
• Evaluating the capacity to act, especially if indicated as limited in the submitted documents or the land register.
• Determining the registrability of the requested entry.
• Examining the legal basis documents, particularly their form.
• Ensuring the completeness of the application documents.
• Checking the necessary approvals and consents.

Moreover, the Office of Justice – Land Registry Department must ascertain that the application originates from the individual legally entitled to dispose of the property as per the land register. This might involve a property right, a limited in rem right, or a registered personal right. The office must align the registered right, the registered right holder, and the transaction applied for. It also involves verifying the identity of the disposing party and confirming it matches the registered individual, often done by requesting authenticated signatures. In exceptional cases, the disposition may originate from the acquirer. If the applicant has already acquired the right, it is crucial to check whether the applicant corresponds with the entitled individual. This is similarly applicable when the application follows the provisions of Article 543 SR, originating from the person entitled as per the register. In all cases, the identity of the disposing party and the acquirer must be established (Article 59 GBV).

Persons Authorized to Submit Applications

• Authorized individuals: Proof of the right to dispose, the representative relationship, or a power of attorney must be provided; the representative must demonstrate their authority to act on behalf of the represented party. This proof must be presented proactively.
• By an authority: The Office of Justice – Land Registry Departmen tis tasked with verifying its jurisdiction to accept the application. However, it is not required to determine which specific person within an authority is authorized to sign dispositions (Article 60 GBV).

Evidence Required for Property Transfer

In Liechtenstein, the modalities of evidencing property transfers to the Office of Justice – Land Registry Department are comprehensively legislated.

Constitutive Entry:

This implies that the real right is established only through registration in the land register, necessitating an absolute obligation to registration. The evidence for property transfer, as stipulated by Article 44 GBV, includes:

• A written contract.
• In the case of pre-emption rights, a contract between buyer and seller, the pre-emptor's declaration of exercise, the owner's consent for registration, and, if it's a contractual right of pre-emption, also the pre-emption contract.
• For the exercise of a purchase or repurchase right, the declaration of exercise by the entitled individual; for a contractual purchase or repurchase right not registered, also the contract of purchase or repurchase right.
• In case of a performance judgment, the judgment along with certification of legal force.
• For voluntary auction, the auction conditions and the auction protocol.
• In cases of mergers, divisions, and asset transfers: certified commercial register excerpts and certified excerpts from contracts regulating the transfer of properties.

Official Certification:

Parties are required to have their signatures officially certified. If there's doubt about the validity of such certification done abroad, the Office of Justice – Land Registry Department may demand a super-certification or an apostille. This requirement is waived if the application originates from an authority (Article 35 GBV).

Off-Book/Declaratory Acquisition of Ownership:

This means that the acquisition of ownership occurs independently of the land register (relative principle of registration). Compulsory registration is only to the extent that the acquirer can dispose of the property only after registration in the land register. Prior to this, the person still registered, although no longer materially entitled, can make valid dispositions to bona fide third parties. Evidence for property transfer is provided (Article 45 GBV) in cases such as:

• Inheritance through the certificate of inheritance.
• For property consolidation or realignment according to public law: a proof according to the applied procedural law.
• In case of foreclosure, the award decision with authorization for registration.
• For a judgment: the judgment with certification of legal force.
• In other cases, documents in the form prescribed by law on the legal transaction or by final decisions. Parties are required to submit these certifications to the Office of Justice.

Evidence for Registration

• For limited real rights: The same conditions apply as for property acquisition through registration or off-book acquisition (Article 48 (1) GBV). If a plan extract is required for the land register, the parties must clearly depict the local situation in the plan extract. This is necessary if the exercise of the easement is limited to part of the property and the local situation is not clearly described in the evidence (Article 199 (1a) SR). For the registration of an easement, a ground charge, or a lien, official certification is generally required. For the establishment of liens, official certification of the creditor's signature is not necessary.
• Transformation of a paper mortgage certificate into a register mortgage certificate: This is evidenced by a written contract and the presentation of the paper mortgage certificate (Article 50 GBV).
• Statutory lien: The documents required to establish the lien demand must be presented. The owner must approve the demand as the lien sum. It thus requires a demand to be secured and agreement that a builder's lien is to be registered. A written proof is necessary, and simple written form suffices.
• Builder's lien: A fundamental requirement for registration is that the lien sum is recognized by the owner, judicially determined, or approved by the owner. If the owner provides adequate security for the demand, no registration or dismissal of a corresponding application should occur. The contractor must be fully secured, with unequivocally sufficient security (cash deposit, deposit of a savings book, pledge of goods or securities, guarantee, surety, etc.). In case of disagreement between creditor and debtor over the lien sum or security, provisional registration can occur. In such cases, the judge notifies the lien, prompting the Office of Justice – Land Registry Department to act based on a judicial decision. If the judge makes erroneous statements (about the amount of the lien, the property, the authorization of the passive legitimate), the application should be rejected, as the Office of Justice – Land Registry Department cannot make corrections on its own.
• Statutory lien in the case of building rights and condominiums: Upon cancellation of a building right, the landowner must compensate the former building right holder for the buildings that fall back. If the compensation is not paid or not guaranteed by a bank guarantee, an indirect statutory lien on the property burdened with building rights is envisaged. This provisional registration must occur within three months from the date of termination of the building right due to lapse of time. The procedure for registering a builder's lien should be analogously applied to the statutory lien for securing the building right rent. As an indirect statutory lien, the community lien only becomes a tangible security upon registration in the land register, with the provisions for the builder's lien correspondingly applicable for both definitive and provisional registration.
• Recognition of the lien sum by the owner, its judicial determination, or approval by the owner, is also a prerequisite for registering a compensation claim instead of the canceled building right, a lien to secure the building right rent, and a lien to secure the contributions of the community against condominium owners.

Rejection of the Application

If the legal requirements are not met, the application must be rejected (Article 546 SR; Article 62 (1) GBV). The rejection must be in writing, providing reasons and legal remedy instructions. The journal must refer to the rejection order. The rejection is subject to a fee. If an appeal against the rejection order is filed, this should be noted in the main book (Article 62 (4) GBV). If the appeal authority issues a favorable decision, the journal entry becomes valid as if no rejection order had been issued. The journal entry is thus legally valid, with effects retroactive to the day of entry. If the appeal is dismissed, the annotation must be removed by the office.

Practical Handling

The Office of Justice – Land Registry Department is not allowed to refuse the receipt and registration of an intended application. Due to the strict legal framework, the office cannot permit correction or improvement orders. To avoid a fee-bearing rejection by order, the Office of Justice – Land Registry Department is prepared to accept applications without signature. After preliminary internal checks, parties are invited by the office for the formal signing of the application. This approach reflects the office's commitment to a citizen-centric service.

Source: Factsheet on the registration of entries in the Land Register (AJU/ g70.011.04)

Executive Summary:

• The registration of property rights in Liechtenstein is governed by the Land Register Ordinance (GBV) and the property law (SR).
• Registration applications must originate from the property owner and satisfy three conditions: an application, proof of disposal right, and a legal basis for the registration.
• The application must be clear, comprehensive, unconditional, and specify each right individually.
• Official authentication of the applicant's signature is necessary, with super-certification or apostille required for foreign authentications.
• Documentation must include detailed information about the acquirer, whether a natural person, legal entity, or partnership.
• The registration process in Liechtenstein's property law system is closely tied to the journal (Tagebuch), where each application is meticulously recorded.
• The Office of Justice – Land Registry Department plays a crucial role in reviewing property registration applications, assessing various aspects like form, content, identity, right of disposition, and legal basis.
• The legitimacy of the application, especially regarding the identity of the applicant and their right to dispose of the property, is rigorously scrutinized.
• Representatives submitting applications must provide unequivocal evidence of their authority.
• The Office of Justice – Land Registry Department also verifies its jurisdiction in cases where an authority submits an application.
• Comprehensive regulations govern the evidence required for property transfers, including constitutive and declaratory acquisitions.
• Official certification of signatures is mandatory, with super-certification or an apostille possibly required for foreign certifications.
• The Office of Justice – Land Registry Department plays a pivotal role in reviewing applications, ensuring legal compliance and accurate registration.
• Practical handling by the Office of Justice – Land Registry Department aims to facilitate the process for applicants, emphasizing a user-friendly approach.