Editorial

Sjef van Erp

The new Succession Regulation:The lex rei sitae rule in need of a reappraisal?

Sjef van Erp: Editor-in-Chief, Email: s.vanerp@maastrichtuniversity.nl

The leading private international law rule in the area of property law has alwaysbeen that the lex rei sitae applies: the law of the place where the property islocated. A close connection exists between this rule and what might be called“classical” property law. By “classical” I mean the law as it was developedespecially in legal literature by the end of the 19th century, building on existingcustomary law, Roman law (particularly relevant on the Continent of Europe),statutes and case law. This was the heyday of the nation-state, colonialismwith itstendency to focus on a nation’s home law as a supreme legal system and to beimposed on the colonies, nationalism, civil law codification and common lawstare decisis. Property law was, furthermore, still very much land law, in otherwords fixed on rights regarding a physical immovable thing and, in spite of theFrench Revolution, in that respect still of a feudal nature. In this intellectualclimate the lex rei sitae rule did what it should do: demarcate where one nationallegal system ended its claim to application and another national legal systembegan to claim application of its own property law. Thus, legal systems becamewatertight compartments and their markets were strictly national.

Europe today shows a very different approach to property law. Market inte-gration is no longer aimed at establishing one market between the “mothercountry” and its colonies, but is aimed at creating a common and internal marketwithin Europe itself. Furthermore, property law is no longer strictly limited torights in remwith regard to physical objects, but is also concerned with areas suchas licenses (e.g. emission rights) and virtual property. The digital revolution (Ineed only refer to the “Digital Agenda for Europe”) is having an enormous impacton transfer of rights in land, as increasingly land registries are digitalised and e-conveyancing is gaining terrain.1 What we see is, what in US legal literature is

1 On the Digital Agenda see http://ec.europa.eu/digital-agenda/.

DOI 10.1515/eplj-2012-0009 EPLJ 2012; 1(2): 187–190

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called, a “dephysicalisation” (in French legal literature the term used is: “déma-téralisation”) of property. This all must have an impact on the lex rei sitae rule,given its focus on physical, immovable property.2

That such a development, indeed, is going on, albeit almost in a repressedway, can be seen when looking at Regulation (EU) No 650/2012 of the EuropeanParliament and of the Council of 4 July 2012 on jurisdiction, applicable law,recognition and enforcement of decisions and acceptance and enforcement ofauthentic instruments in matters of succession and on the creation of a EuropeanCertificate of Succession. The regulation shall apply from 17 August 2015.3 Uponfirst reading recital 18 of the regulation seems to contradict this, as it states: “Therequirements for the recording in a register of a right in immovable or movableproperty should be excluded from the scope of this Regulation. It should thereforebe the law of the Member State in which the register is kept (for immovableproperty, the lex rei sitae) which determines under what legal conditions and howthe recording must be carried out and which authorities, such as land registers4 ornotaries, are in charge of checking that all requirements are met and that thedocumentation presented or established is sufficient or contains the necessaryinformation.”

First of all, the recital mixes up the lex registrationis and the lex rei sitae. Thelaw applicable to the registry does not necessarily have to be the law of the placeof the object. Why could not one European land registry be created to register,e.g., euro-mortgages, to be established in Vienna? Reference can be made to theInternational Registry of Mobile Assets, held in Ireland, and the future Interna-tional Registry for Railway Rolling Stock, under the Cape Town Convention onInternational Interests in Mobile Equipment.5 Secondly, article 1(2)(l) of the Reg-ulation states: “2. The following shall be excluded from the scope of this Regula-tion (…) (l) any recording in a register of rights in immovable or movable property,including the legal requirements for such recording, and the effects of recordingor failing to record such rights in a register.” Not a word on lex rei sitae in theactual text, quite understandable also given that the text addresses rights inmovable property, which may include interests in mobile equipment under theCapetown Convention, an international treaty joined by the European Union!6

2 Cf. (also for a critical analysis) Turner, Peter G., Degrees of Property (January 1, 2011).University of Cambridge Faculty of Law Research Paper No. 01/2011. Available at SSRN:http://ssrn.com/abstract=1735953 or http://dx.doi.org/10.2139/ssrn.1735953.3 Official Journal L 201/107 of 27.7.2012.4 Probably “land registrars” are meant.5 More information can be found on the website of Unidroit: www.unidroit.org.6 Cf. http://www.unidroit.org/english/implement/i-2001-convention.pdf.

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Furthermore, the Succession Regulation is based on the primary rule that thehabitual residence of the deceased shall be the applicable law, wherever theassets are located.7 According to article 23 (2)(e) that law shall govern “the transferto the heirs and, as the case may be, to the legatees of the assets, rights andobligations forming part of the estate, including the conditions and effects of theacceptance or waiver of the succession or of a legacy;”. This seems to me clearenough language.

The exception for immovables with regard to the requirements for enteringthe change of ownership in the registry and the legal effects thereof should,therefore, be seen as exceptions to the general rule and be interpreted strictly. Ifunder the applicable law ownership passed to the heirs, the requirements of thelex registrationis have to be fulfilled for entering this into the register, but owner-ship passed and in my view the lex registrationis only decides what it means if thisis not registered, which can only be its effects vis-à-vis third parties in good faith.This seems to contradict recital 19 of the Regulation: “The effects of the recordingof a right in a register should also be excluded from the scope of this Regulation.It should therefore be the law of the Member State in which the register is keptwhich determines whether the recording is, for instance, declaratory or constitu-tive in effect. Thus, where, for example, the acquisition of a right in immovableproperty requires a recording in a register under the law of the Member State inwhich the register is kept in order to ensure the erga omnes effect of registers or toprotect legal transactions, the moment of such acquisition should be governed bythe law of that Member State.” This is, however and first of all, no longer areference to the lex rei sitae, but to the lex registrationis. Furthermore, the textitself of the Regulation does not reflect what the recital states, which raises thequestion what has priority: the text or the recital? Recitals are meant to explainthe text, not amend it and the latter, it is submitted, appears to be the case.

Finally, the limited role of the lex rei sitae can be seen when looking at article31 on adaptation of rights in rem. Given its universal application, the applicablelaw may know types of rights in rem which are unknown in other legal systems.Therefore article 31 states: “Where a person invokes a right in rem to which he isentitled under the law applicable to the succession and the law of the MemberState in which the right is invoked does not know the right in rem in question, thatright shall, if necessary and to the extent possible, be adapted to the closestequivalent right in rem under the law of that State, taking into account the aimsand the interests pursued by the specific right in rem and the effects attached toit.” It is no longer the lex rei sitae and its numerous clausus that decides as to

7 See articles 4 and 21 Succession Regulation.

The new Succession Regulation 189

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which rights in rem can be recognised, but the applicable law according to theRegulation. This is yet another reason why article 1(2)(l) regarding the applicablelex registrationis should be interpreted restrictively and can certainly not just beequated with the lex rei sitae.

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