Saarbrücken Higher Regional Court, decision of 23 May 2019 - 5 W 25/19

Central standards: §§ 19, 22, 29, 35 GBO

(Land register correction due to a vindication legacy)

Official guidelines:

1. following the entry into force of Regulation (EU) No. 650/2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession (EuErbVO) as interpreted by the European Court of Justice (v. 12.10.2017 - C-218/16, ZEV 2018, 41), the land registry is no longer authorised to deny a proven legacy of vindication under French law its effect in rem.

2. a European Certificate of Succession submitted by the legatee generally constitutes sufficient proof of inaccuracy within the meaning of § 22 GBO, which can be used to prove the legal status. However, as with other national certificates of inheritance, the land registry has a right of examination if doubts arise.

For the reasons:

II The appeal is admissible and leads to the annulment of the contested decision.

1. vindication legacies, statutory usufructuary rights and division orders in rem that can be evidenced by a European Certificate of Succession (ENZ) had no effect in German land register proceedings. The legatee could not bring about a correction to the land register simply by submitting the ENZ; there was no inaccuracy. The 18th recital of the EU Succession Regulation and Art. 1 para. 2 letter k, letter l of the EU Succession Regulation were responsible for this. The prevailing view to date has been that the nature and registration of rights in rem are excluded from the scope of the EU Succession Regulation. German property law should apply, as should the lex rei sitae. The previously prevailing view did not affirm any land register inaccuracy and assumed that the act of fulfilment had to be submitted to the land registry, i.e. the conveyance before a German notary in the case of vindication legacies to real estate (Wilsch in BeckOK GBO, Section 35 marginal no. 40). The land registry followed this view with its decision of 6 March 2019.

By contrast, the ECJ decision of 12 October 2017 - C-218/16 (ZEV 2018, 41 - Kubicka; see also Weber DNotZ 2018, 16; Dorth ZEV 2018, 11; Wilsch ZfIR 2018, 253; Leitzen ZEV 2018, 311) establishes that the EU Succession Regulation is to be understood in such a way that the legacy by vindication is also fully effective according to the law of succession in those legal systems that only recognise the legacy under the law of obligations. The ECJ justifies this with Art. 23 para. 1 of the EU Succession Regulation, with the uniformity of the law applicable to the succession as well as with the 37th recital of the EU Succession Regulation. The aim is to prevent a division of the estate, whereby the law of succession takes precedence over the law of property. According to the ECJ, the scope of application of Article 1(2)(k) of the Succession Regulation is limited to the existence and number of rights in rem. However, transitional arrangements are not covered by Art. 1 (2) (k) of the Regulation. According to the ECJ, the provision does not provide any basis for recognising the legacy of vindication. Preference must be given to the law of succession. As a result, the legacy of vindication has unrestricted effects in rem from the moment of succession. Nothing to the contrary can be inferred from Art. 1 para. 2 lit. l of the EU Succession Regulation, which, according to the ECJ, only refers to procedural law, but not to the way in which the right is acquired. For land register practice, the ECJ judgement means that a conveyance no longer has to be declared. The vindication legacy has a direct effect in rem, so that the correction procedure pursuant to Section 22 GBO can be followed. The land registry cannot demand conveyance. The inaccuracy in the land register can be rectified by means of proof of inaccuracy, in this case an ENZ (see also Art. 63 para. 1 of the EU Succession Regulation). There is no problem with § 35 GBO, as the correct procedure is to proceed in accordance with § 22 GBO. What is required is not proof of inheritance, but proof of incorrectness. It is not the proof of universal succession that is required, but a special singular succession (Wilsch § 35 GBO para. 40-40d).

Insofar as it is assumed in the literature, despite the ECJ's decision, that substantive and formal law diverge in land register proceedings, this cannot be accepted. The distinction between inheritance and property law was already hotly disputed when the EU Succession Regulation was being drafted. In addition to the view outlined above that the acquisition of the rights in question takes place outside the land register and only a land register correction pursuant to Section 22 GBO is required, it is still sometimes argued that - as in the case of a legacy of damnation - a conveyance pursuant to Section 925 BGB together with registration authorisation is required. In some cases, it is assumed that a conveyance is to be waived, but a land register correction is to be demanded on the basis of a correction authorisation of the heir pursuant to Sections 22, 19 GBO. This divergence between substantive and formal law in land register proceedings is intended to be the consequence of the formal consensus principle that characterises German land procedure law, which is intended to considerably relieve the burden on German land registries. The land registry should not have to check the validity of the substantive transfer of rights, but only the correctness of the procedural declarations and certificates. It is admitted by this view that according to § 22 Para. 1 GBO a land register correction can also take place without authorisation according to § 19 GBO, however the proof of succession according to § 35 Para. 1 GBO must be provided. However, this provision only expressly provides for proof of „succession“. Neither the wording of this provision nor the history of its origins cover an interpretation according to which a direct change of ownership based on a legacy of vindication effective under the foreign law of succession, proven by submission of an ENZ, would also be covered. An analogous application of § 35 para. 1 sentence 1 GBO to a legacy of vindication under foreign inheritance law is ruled out. The explanatory memorandum to the Act on International Inheritance Law and on the Amendment of Provisions on the Certificate of Inheritance and on the Amendment of Other Provisions proves that the German Bundestag has deliberately spoken out against the application of this provision to legacies by vindication without, however, declaring it „unlawful“ (BT-Drs. 17/4201, 58). It is derived from this that, as long as land register procedural law has not been changed, there is no way around the fact that even in the case of a vindication legacy that is materially valid according to German legal understanding under foreign inheritance law, a conveyance (Section 925 BGB) together with registration authorisation (Section 19 GBO) must be submitted to the land registry office by the heir to the legatee (Litzenburger FD-ErbR 2017, 396271)

This view no longer appears tenable following the ECJ's decision and would, in practice, render the decision-making principles and the effect that the ECJ ascribes to the ENZ null and void. In the view of the ECJ, the vindication legatee should be able to legitimise himself directly as the holder of rights vis-à-vis the land registry by submitting an ENZ. This is also not contradicted by the reasoning of the German legislator for Section 35 GBO, because it acted in disregard of the significance of the EU Succession Regulation. Rather, Sections 19, 22, 29 and 35 GBO can be interpreted in accordance with the EU, so that in addition to the succession, the individual succession by reason of death is also proven by an ENZ (Dorth ZEV 2018, 11; Weber DNotZ 2018, 16 with the relevant note that the ENZ must be suitable for proving a legacy of vindication to be recognised if it is already suitable for proving the succession in accordance with Section 35 GBO).

For this reason, the land registry may not deny a proven vindication legacy its effect in rem. Insofar as a usufructuary right arises by operation of law under French law, no further registration authorisation may be required, which could also no longer be granted by the beneficiary (see also Weber DNotZ 2018, 16).

2. another question is how to prove the incorrectness.

In principle, a valid ENZ constitutes proof of incorrectness which can be used to prove the legal status. According to Art. 63 para. 2 letter b, 69 para. 2 sentence 2 EU Succession Regulation, the ENZ serves as proof of a legacy of vindication or a division order with effect in rem. The function as an „effective document“ should mean that the ENZ must be accepted as proof in all member states within the scope of its evidentiary and presumption effect pursuant to Art. 69 para. 2 of the EU Succession Regulation for the purpose of registering the estate assets (Dutta in MüKoBGB, 2018, Art. 69 EuErbVO para. 30; J. Schmidt in BeckOK, Art. 69 EuErbVO para. 57).

For these reasons, the view must be rejected that, even in the case of an ENZ, the land registry must examine whether the legal system concerned permits an acquisition with a direct effect in rem and whether the transfer of rights has actually taken place in the specific individual case (Döbereiner GPR 2014, 42; Litzenburger FD-ErbR 2017, 396271; Wachter ZErb 2017, 358), which cannot be done without a legal opinion on foreign inheritance and property law. This view is not compatible with Art. 69 of the EU Succession Regulation.

On the other hand, it is not a consequence of the application of Art. 69 EU Succession Regulation, as is also argued, that the German land registry is not authorised to check the accuracy of the ENZ (Wilsch ZEV 2012, 530). This seems too far-reaching because the ENZ does not formulate an irrefutable presumption in favour of the legatee. It is true that Art. 69 para. 5 of the EU Succession Regulation states that the certificate constitutes an effective document for the entry of the estate in the relevant register of a Member State. However, Art. 69 para. 2 of the EU Succession Regulation expressly stipulates that the ENZ only has a presumption of validity.

As with other national certificates of inheritance, the land register offices have a right of examination if doubts arise (Grziwotz in MüKoBGB, 2017, Section 2365 marginal no. 27 on the legal situation with a German certificate of inheritance).

It should also be noted that prior to a land register correction, those whose rights under the land register may be impaired by the corrective entry must be granted the right to be heard (Demharter, GBO, 31st edition, § 1 para. 69, § 22 para. 49). In the present case, this means that the heirs in whose co-ownership share the usufructuary right is to be registered must be granted the right to be heard, even if - due to the simultaneous application - they are not yet registered as co-owners in the land register. Their co-ownership share is affected by the registration of the usufructuary right.

3. it should also be noted that in the ENZ the vindication legacy pursuant to § 28 S. 1 GBO must be correctly designated. German land register law is not affected in this respect (Art. 1 para. 2 lit. l EuErbVO; Wilsch ZfIR 2018, 253 [260]; Böhringer ZfIR 2018, 81 [83]; Kleinschmidt LMK 2018, 403371). However, the land registry is required to issue an interim order if the designation requirement pursuant to section 28 sentence 1 GBO is not satisfied in the ENZ. 1 GBO is not satisfied (Wilsch § 35 GBO margin no. 40-40d; Weber DNotZ 2018, 16; Ludwig, FamRB 2018, 64).

This designation requirement is not observed in the submitted ENZ. There, the asset assigned to the branch (5/8 full ownership and 3/8 usufruct) is only described as follows: „in the real estate assets in ... (Germany), ..., consisting of a one-room flat with bathroom and kitchenette“. This is not sufficient according to § 28 S. 1 GBO is not sufficient.

4 For these reasons, the contested decision was to be cancelled. The Land Registry must make a new decision on the application for registration in accordance with the legal opinion set out above.