CONVEYANCE OF REAL ESTATE,
The Role of a Civil Law Notary
By: Lars de Vries LLM, Candidate Civil Law Notary
The Civil Law Notary
A civil law notary is a public officer appointed by the Government to ensure the validity of certain legal acts the legislator finds of such importance that the engagement of a legal professional is mandatory.
Among legal acts that can only be performed by executing a deed before a civil law notary are the conveyance of real estate, encumbering immovable properties with mortgage rights, the incorporation of limited liability companies, the establishment of foundations and associations, the making of a last will and testament and many more.
A civil notary is a university law graduate who is an expert in family law, succession law, corporate law and property law.
Impartiality is an important aspect of the task of the civil law notary, who by law is required to take into consideration the interests of all the parties to a legal transaction.
The original deed executed before a civil law notary is state property and it will therefore always remain in safekeeping of that civil law notary or the successor thereof. The civil law notary is only authorized to issue authentic copies of the original deed.
Conveyance of Real Estate
An important task for which the services of a civil law notary are engaged is the conveyance of real estate.
That task is carried out in close cooperation with the Land Registry (Kadaster). Parties may execute their own sale and purchase agreement, although the civil law notary is always more than willing to assist with drafting up such document.
However, for the actual transfer of title it is mandatory to engage the services of a civil law notary.
How the system works
Examination of Sale & Purchase Agreement
- The civil law notary will first thoroughly examine the executed sale and purchase agreement and check if the parties have made proper agreements regarding all relevant issues.
- Should that not be the case, then the civil law notary will contact the parties and suggest amendments.
Title Search
- After examining the Sale and Purchase agreement, the civil law notary performs a title search with the Land Registry to verify who is inscribed as owner, and to find out if there are any mortgages, attachments or other restrictive rights burdening the property concerned.
- Sometimes it will be necessary to also check other registers such as: - the Registry of Births, Deaths and Marriages; - the Central Registry of Testaments, in case of decease of the original owner; - the Register of the Chamber of Commerce and Industry in case a party to the agreement is a legal entity; - the Bankruptcy Register which is held by the Court, if deemed prudent.
- In case the property is encumbered by mortgages or attachments, the civil law notary will contact the banks or the mortgagee/initiator of the attachment to find out the amount required to cancel the mortgage or attachment.
Closing Costs
- Upon establishing that the seller indeed is fully authorized and competent to perform the sale and purchase and the transfer of title, the civil law notary will prepare a draft deed of conveyance and provide a specification of the amounts to be received by seller and to be paid by buyer.
- The buyer then has to deposit the purchase price and the transfer costs (= transfer tax 4% of the purchase price + additional costs of more or less 1.5 % of the purchase price) in the escrow account of the civil law notary.
The Closing
- The civil notary will only execute the deed of conveyance when:
(i) the aforementioned funds have been received in the escrow and
(ii) another check with the Land Registry confirms that the juridical status of the property remained unchanged compared with the previous check.
Registration
- Upon execution of the deed of conveyance, the civil law notary will cause an authentic copy of that deed to be inscribed in the Public Registers at the Land Registry. In accordance with the law, transfer of title occurs at the moment of inscription in the Public Register concerned.
- The Land Registry will then send an extract to the civil law notary, which extract will state the new juridical status of the property.
Pay Out
- The civil law notary checks the status of the property at the Land Registry as it is stated in the aforementioned extract and it is only after the civil law notary is convinced that the buyer has acquired the property free of mortgages, attachments or other restrictive rights, that seller will receive payment of the proceeds from the sale.
- Although the civil law notary and the Land Registry strive to expeditiously process the executed deed of conveyance, it may take a few days before the civil law notary receives the extract of the Land Registry stating the new juridical status of the property. As a consequence thereof the seller will receive the proceeds from the sale a few days after executing the deed of conveyance.
A Fail Safe system
The beauty about the system of conveying real estate on the Netherlands Antilles is that it is (nearly) 100% fail safe.
Seller has the guarantee that the funds are available for pay out, the moment that the deed of conveyance is executed and buyer has the guarantee that seller will not be paid out until it is sure that buyer has acquired the property free of mortgages, attachments or other restrictive rights.
The system is so fail safe that in our jurisdiction there is simply no need for “title insurance”.
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