Immovable Property

Property General

Property includes land and buildings, movable items, and intangible property such as shares, debts, trademarks, copyrights, etc. There are three broad classifications: moveable, immovable and intangible.

Conflict of laws distinguish between movable and immovable property. Movables are divided into tangible and intangible property.

The former are physical objects, and the latter are in the nature of claims that must be asserted generally by court action.  While the former would include goods and other physical objects, the latter includes choses in action such as debts, goodwill, stocks and shares.

Law of Where Situate

One of the most universal principles in private international law is that the courts of the place where the land or  other immovable property is situated determine, ownership and title.

They determines such matters as the nature of the property rights, their transfer and inheritance. The principle is confirmed by EU Regulations.

The domestic court has no jurisdiction to deal with foreign land. It has no jurisdiction to deal with civil claims dependent  upon that title. An Irish court will not inquire into title matters in another jurisdiction and will look to that jurisdiction’s laws in relation to the status of the property concerned.

EU Regulations Confirm

The Brussels Regulation does not apply to claims relating to land and tenancies of land in another state. It is within the exclusive jurisdiction of the home state.

However, in proceedings which have as their object tenancies of immovable property concluded for temporary private use for a maximum period of six consecutive months, the courts of the Member State in which the defendant is domiciled shall also have jurisdiction, provided that the tenant is a natural person and that the landlord and the tenant are domiciled in the same Member State;

Classification Issues

A distinction is made between moveable and immovable property. Moveable property generally includes any rights to land or buildings.  How the classification works will depend on the law of the country concerned and where the property is situated.

An interest in land, including freehold and leasehold interest, legal and beneficial interest, and all manner of estate, interest, rights and licences, are classified as immovable property.

Fixtures are part of the property, but fittings are not.  Under common law, certain items and things closely associated with the land or building were deemed immovable. This includes things as the keys of a house, title deeds, and fish in a pond.  These are generally dealt with in accordance with the law of the place and are deemed immovable.

An interest in a mortgage of land is an immovable.  Although a beneficial interest under a trust is in some respects in the nature of an equitable claim against the trustee, a trust of land is dealt with as an immovable.  This is notwithstanding that for the purpose of rules on conversion and some other purposes, it is deemed movable as if they have already been converted into money.

Transfer of Land

The capacity of a person to take and transfer land will depend on the law of the place.  Jurisdictions may have differing rules regarding legal capacity.  For example, there may be differences in the capacity of corporations, or the age of minorities may differ.

The law of the place determines the formalities for land transfer.  The local law may regard particular requirements as essential, or specified but not mandatory.

The essential validity of the transfer is dealt with by the law of the place. Rules as to what estate and interest exist, perpetuity rules, restrictions on transfers etc. are determined by the law of the place. In civil jurisdictions, there are various restraints on owners transferring immovable property, or a certain proportion of it, to the detriment of their heirs.

Law Governing  Transfer

The law governing transfers of property and rights of property will often arise under a contract. The law that governs the contract is not necessarily the one that governs how the property is passed. The law distinguishes between questions relating to the contract and questions relating to the property.

In the case of immovable property, lands, buildings, and associated rights, the law where the property is physically situated must always govern questions of transfer and creation of rights. Issues such as the capacity to transfer are usually governed by this law. The law will apply to leases, the creation of mortgages, rights, and easements over the property.

It is possible that an order may be made to pursue a contract to transfer land in another country. In this case, the party to the contract might be obliged personally by the court to perform it. However, the Court cannot order the direct transfer of the property.  If the transfer would be impossible under the law where the property is situated, the law of the country that is governing the contract would not apply it.

The capacity to transfer and the form required for the transfer of foreign land is governed by the law of that jurisdiction.  However, it may be binding in equity domestically between the parties even if it is ineffective to give good title in the foreign jurisdiction. There may be an equity binding under domestic law.

However, as regards third parties, such a transfer has no more effect than the local law allows it.  Therefore, third parties acquiring interests by the local law are not affected by such equitable rights unless they are so affected under local law.  Where, however, they take the property subject to an obligation to satisfy another’s equitable claim, they will be bound.

Rome Convention/ Regulation

Generally, a contract for the transfer of land must comply with the law of the place concerned.   However, the Rome Convention provides that if the format of a contract complies with the requirements of the law of the place of contract or other law applicable under the Convention rules, it is binding notwithstanding that it does not comply with the law of the place where the land is situated.

In the absence of a choice of law, the Rome Convention provides that the essential validity of the contract is to be governed by the law of the country of which the contract is most closely connected.  This will generally be the place where the land is situated.  The same rule applies at common law in non-Convention cases.

Validity of Transfer

Where local law absolutely forbids the assignment of an immovable, this should be recognised in Ireland.  Equities cannot be enforced in this case in respect of the property or its proceeds. The burdens to be borne by foreign immovable property are in the absence of a contract or personal equity to be determined by the local rule.

An assignment of an immovable, which gives good title under the law of where the immovable is situated, is recognised in Ireland irrespective of the domicile and the position of the parties.  Equity in the assignment of an immovable in Ireland may be invalid unless it complies with Irish law.

Where the local law where the goods are situated prescribes special formalities for validity, an assignment made without those formalities is not recognised.  It seems likely that for an assignment to be valid in Ireland, the assignor must have the capacity to make the assignment and the assignee’s capacity to receive it according to the law of their respective domiciles.

This seems to be the case wherever the assignment may be made. Where under the local law, a bona fide purchaser for the value of immovable obtains good title, this is recognised by Irish law.

Contract  and Property

A contract between two parties may relate to foreign land. An obligation which relates to land need not necessarily be governed by the place where the law of the place where the land is situate.

At common law, a domestic court may exercise jurisdiction in relation to a claim based on a personal obligation, notwithstanding that  claims-based on  title are subject to the exclusive jurisdiction  of where the immovable property is situate.

A  contract may be made domestically to enforce the sale of land in another jurisdiction. It may be governed by domestic law. Equally, a trust may be constituted under and governed by domestic law which includes foreign property.

Where the claim is to enforce a contract or equitable obligation/trust it may be enforced against a party personally, notwithstanding that it relates to property abroad.

Claims for breach of contract and breach of trust may be enforced by way of personal obligation.  The court has no jurisdiction to make orders directly enforceable in the foreign state, but it may make orders enforceable against the particular party concerned.

Mortgages

Where a mortgage of foreign immovable property has been validly made under domestic law, the domestic courts will compel the mortgagor to pay off the mortgage debt out of the proceeds of the sale, notwithstanding that it does not comply with the law of the place where the asset is situated or that a mortgage of that type is unknown in that jurisdiction.

A mortgage will not be enforced against a third-party transferee of the foreign land, even where he takes with notice of the mortgage, unless he is bound by an obligation under the local law or by the local law itself to satisfy the claims of the mortgagee.

Enforcing v Foreign Land

The Irish courts may order the performance of a contract relating to a foreign land where the local law of the place where the asset is situated allows that order to be carried into effect and performed.  The courts will act on their own principles in the exercise of jurisdiction over contracts made in Ireland and in administering equities between the parties within that jurisdiction by personal order.

A contract to grant a mortgage on foreign land which conforms with Irish law is enforceable in the mortgagor’s bankruptcy. Whether however any such right creates an interest in the foreign land depends, on that foreign jurisdiction’s rule.

Irish courts may grant relief in the case of fraud or inequitable dealings affecting foreign immovable property.  A conveyance of a foreign immovable procured by fraud may be set aside.

An Irish court may order an account of rents and profits of foreign immovable property against persons liable to account for the same.  In a suitable case, a receiver may be appointed.  The court cannot put a receiver in possession of the foreign immovable.  However, a person who impedes the receiver may be subject to orders based on contempt of court.