ILN: BUYING AND SELLING REAL ESTATE - AN INTERNATIONAL GUIDE

[BUYING AND SELLING REAL ESTATE IN THE NETHERLANDS]

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Various types of registered immovable property rights The Dutch Civil Code distinguishes four main immovable property rights which confer full ownership or a limited right in rem to the purchaser. These rights are: Property right The property right (ownership right) is the most comprehensive immovable property right one may acquire, free and unencumbered with any limited right belonging to other (third) parties. The owner of the immovable property is in the position to sell and dispose of the immovable property, to encumber the immovable property with limited rights in rem such as leasehold or

the mortgagee is not bound by this condition in a situation of a forced sale. However, after the execution sale the new leaseholder is again fully bound by the leasehold conditions. Apartment right The apartment right is a distinct share in an immovable property with its appurtenances, giving entitlement to the sole use of a certain part of the immovable property. The immovable property is divided into apartment rights by way of a notarial division deed, containing a division plan and rights and obligations of the owners of the apartment rights. The application of apartment rights is widely used as to legally structuring immovable property, whether residential or commercial or otherwise. The notarial division deed contains, as required by law, the establishment of an owner association. All apartment right owners are members of this owner association by operation of law. The objects of the owner association are to manage the immovable property and the general interests of the joint owners directly relating to the immovable property. An apartment right may be encumbered with limited rights in rem such as leasehold or mortgage. Right of superficies The right of superficies ("opstalrecht") is a limited right in rem and provides the holder the right to own or to acquire constructions and structures in, on or above immovable property which is owned by a third party. The right of superficies may generally be compared with leasehold, but a distinctive contrast is that the leaseholder may use and hold the immovable property itself while the holder of the right of superficies has the ownership and use of

mortgage. Leasehold

Leasehold ("erfpacht") is a limited immovable property right in rem and provides the leaseholder the right to hold and use the immovable property which is owned by another person or legal entity. The rights and obligations of the leaseholder are generally limited by law and can be specifically limited by the leasehold conditions which are concluded between the owner and the leaseholder. The following items are usually determined by the leasehold conditions: - duration of the lease (temporary, permanent, or perpetual); - ground rent ("erfpachtcanon"); - designated use; - (conditional) right of transfer; - (conditional) right of sub-leasehold. The leaseholder is entitled to mortgage the leasehold without the consent of the owner. Therefore, in case the leaseholder requires the written consent of the owner under the leasehold conditions to transfer the leasehold,

ILN Real Estate Group – Buying and Selling Real Estate Series

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