NETHERLANDS Law and Practice Contributed by: Coco van Zuiden, Marijn Bodelier, Sabine Schoute and Simone Wijngaard, Greenberg Traurig, LLP
The most comprehensive right in rem in real estate is ownership. This right encompasses the power to possess, use, encumber and transfer the real estate, with due observance of the law. Other rights in rem are derived from and “encumber” the right of ownership and are known as “limited rights”. Such limited rights include leaseholds, servitudes/easements, rights of superficies, usufructs and mortgages. 2.2 Laws Applicable to Transfer of Title See 1.1 Main Sources of Law . 2.3 Effecting Lawful and Proper Transfer of Title Under Dutch law, the involvement of a civil law notary is mandatory for a variety of legal transac - tions, including the creation and transfer of rights in rem in real estate. A notary is both a legal practitioner and a public official with several pre - scribed duties and is required to be impartial, which means that they must act in the interest of all parties to a transaction and also consider possible third-party interests. The ownership of real estate is transferred by the execution of a deed before a civil law nota - ry, followed by the filing of a certified copy of the deed in the public register maintained by the Land Registry Office. Rights in rem derived from ownership are created and transferred in the same way. Before the deed is executed, the notary is required to investigate whether the owner (or the transferor or party creating the relevant right) has the power of disposal over the real estate and whether any mortgages (or other limited rights) are vested therein. This is done by, among other things, reviewing the owner’s/transferor’s “chain of title” and by checking the land register. If the
land register shows any inconsistencies, these must be further investigated by other means. The registration process set out above offers the buyer an appropriate level of security. In the Netherlands, the Land Registry records all important information concerning real estate. It is impossible to transfer property without regis - tration, so title insurance is not common in the Netherlands. 2.4 Real Estate Due Diligence It is common practice for real estate due dili - gence to cover the legal, tax, environmental, technical and commercial aspects of the sub - ject of sale. The scope of the due diligence usually depends on the investment type and value, the current state of the subject of the sale and the require - ments of the purchaser in that respect. A “standard” legal due diligence comprises a review of the following, among other things: • title documentation; • leases; • environment plans; • environmental permits; • soil/environmental surveys; • legionella surveys/management plans; • construction agreements; • warranty certificates; • insurance documentation; and • maintenance contracts. The results of the various legal, tax, environmen - tal, ESG, technical and commercial reviews are recorded in due diligence reports drawn up by the purchaser’s respective advisers.
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