The land and mortgage register is an official set of documents maintained by the court competent for the location of the real property. Land and mortgage registers are maintained in order to establish the legal status of real estate. One of the main principles of keeping land and mortgage registers is a presumption, according to which a right disclosed in the land and mortgage register is entered in accordance with the actual legal state. This principle justifies the presumption that: 1) the registered right exists; 2) it belongs to the entity indicated in the entry; 3) the content of the right is consistent with the entry; 4) the right has priority resulting from the entry.
The above presumption is dictated primarily by ensuring security of legal transactions in real estate by ensuring reliability of land and mortgage registers. The land and mortgage register consists of four sections marked with Roman numerals I, II, III, IV. Section I of the land and mortgage register comprises section I-O “Designation of real property” and section I-Sp “Inventory of rights connected with ownership”. Section II discloses the right of ownership and perpetual usufruct. Section III is used to disclose limited rights in rem (except for mortgages), restrictions on the disposal of real property or perpetual usufruct, as well as personal rights and claims against the real property (except for claims concerning mortgages). Section IV records mortgages and claims relating thereto.
In order to ensure security of real estate transactions it is desirable that land and mortgage registers disclose the full legal status of real estate, updated on an ongoing basis as changes occur. It should be emphasised that the presumption of conformity of entries with the actual state extends only to the legal state of the real estate, which is disclosed in sections I-Sp, II, III, IV, but does not extend to entries in section I-O, which contains factual data regarding the designation of the real estate.
In fact, there are situations when an entry in the land and mortgage register is inconsistent with the actual legal state. The inconsistency of the content of the land and mortgage register with the actual legal state may have various forms, and may consist, in particular, in the lack of disclosure of a right, the lack of entry of existing encumbrances or limitations of a right, an incorrect entry of a right, or finally the disclosure of a non-existent encumbrance or limitation. Therefore, it cannot be automatically assumed that every land and mortgage register reflects the current legal state of the real estate.
In the event that the legal status of a real estate disclosed in the land and mortgage register is not consistent with the actual legal status, then the only way to remove the inconsistency is to institute an action for reconciliation of the land and mortgage register with the actual legal status. The legal basis for such an action are the provisions of the Act on Mortgage and Land and Mortgage Registers. A request for reconciliation of the content of the land and mortgage register with the actual legal state is subject to examination by a civil court. Action for removal of discrepancies may be brought if:
1) an existing right is not registered in the land and mortgage register, e.g. a second spouse has not been registered as a co-owner of the real estate, despite the fact that the real estate was purchased during the course of the marriage, one of the partners of a civil partnership has not been registered as a co-owner;
2) the right is registered in the land and mortgage register incorrectly, e.g. incorrect amount of share in co-ownership of the real estate in fractional parts is entered, another spouse is registered as a co-owner of the real estate, despite the fact that the real estate belongs to the personal property of one spouse only; or
3) in the land and mortgage register a non-existing encumbrance or restriction is entered, e.g. mortgage established on the real estate being a joint property of a spouse without the consent of the other spouse is entered, life-tenancy is entered whereas the real estate has been encumbered with life-tenancy servitude of dwelling.
A court judgment in a case for reconciliation of the content of the land and mortgage register does not automatically correct an erroneous entry. Only on the basis of a positive verdict, stating the discrepancy between the legal status of the real estate as disclosed in the land and mortgage register with the actual legal state, the competent land and mortgage register court makes a corrected entry in the land and mortgage register. Therefore, there is a need for cumulative, successive proceedings of both courts, and their joint result is a final reconciliation of the content of the land and mortgage register with the actual legal state.
Reconciliation within the meaning of Article 10 of the Act on Mortgage and Land and Mortgage Registers does not include rectification of real estate designation, e.g. when it appears from the land and mortgage register that the real estate is undeveloped, while in fact it is developed or the wrong area of the real estate is entered in the land and mortgage register. Rectification of faults in entries in Section I-O takes place under a simplified procedure pursuant to the provision of Article 27 of the Act on Mortgage and Land and Mortgage Registers. According to this provision, on the basis of data from the land and building register, at the request of the real estate owner or perpetual usufructuary, the designation of the real estate is rectified in the land and mortgage register.
Rectification of the real estate designation is made in the course of non-court proceedings. The rectification is made by the land and mortgage register court by making an entry. When considering the application to change the designation of the real property in the land and mortgage register, the court ex officio checks the data contained in the application and the designation of the real property disclosed in the land and mortgage register against the data of the real property cadastre (land and building register). As opposed to rectification of an erroneous entry of the legal status of real property, in this case there is no need to obtain a prior court ruling confirming the erroneous entry in the land and mortgage register, as the application for rectification is immediately examined by the land and mortgage register court.
