ACQUISITION OF REAL PROPERTY IN EU

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ACQUISITION OF REAL PROPERTY IN EU

• WITH SPECIAL EMPHASYS TO NEW MEMBERS STATES

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1. Member states are free to set up a system of
property ownership, but   although the system
of property ownership continues to be a matter
for each Member State under Article 222 of the
Treaty, that provision does not have the effect
of exempting such a system from the fundamental
rules of the Treaty (see Case 182/83 Fearon v
Irish Land Commission 1984 ECR 3677, paragraph
7)- Konle (C-203/97)
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2. EU law controls when a legislative scheme
interferes with the basic freedoms   it is
common ground that national legislation on the
acquisition of land must comply with the
provisions of the Treaty on freedom of
establishment for nationals of Member States and
the free movement of capital.- Konle
(C-203/97)   In the case Commission v. Greece
(C-305/87) the Court found Greek scheme of
limiting the acquisition of real estate of
non-nationals, in respect of real property
situated in its border regions, the Hellenic
Republic has failed to fulfill its obligation
under the Treaty
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Ø"It follows that access to housing and ownership
of property, is the corollary of freedom of
movement for workers and is for that reason
covered by the prohibition of discrimination Øth
e right to acquire, use or dispose of immovable
property on the territory of a Member State is
the corollary of freedom of establishment.
ØSimilarly, with regard to freedom to provide
services, access to ownership and the use of
immovable property is guaranteed by the Treaty
in so far as such access is appropriate to enable
that freedom to be exercised effectively
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3. ECJ regularly sticks to the rational and the
jurisprudence of free movement of
capital Whatever the reasons for it, the
purchase of immovable property in a Member State
by a non-resident constitutes an investment in
real estate which falls within the category of
capital movements between Member States. Freedom
for such movements is guaranteed by Article 73b
of the EC Treaty (now Article 56 EC) (see Case
C-302/97 Konle v Austria 1999 ECR I-3099,
paragraph 22).- Alfredo Albore (C-423/98)
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4. Member States have the right to take all
requisite measures to prevent infringements of
national law and regulations or such measures as
are justified on grounds of public policy or
public security, but any such measures shall not
constitute a means of arbitrary discrimination or
a disguised restriction on the free movement of
capital (General exceptions or justified
obstacles)
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ØKolne (C-302/97), from 1999, prohibits o
concrete schemes of prior authorization for real
estate acquisition for the purpose to control the
use of real property (if it is used for secondary
residence), only prior declaration (as in
financial transfers) is not however sufficient
leaves the door open for prior authorizations
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ØAlfredo Albore (C-423/98), from 2000, prohibits
procedures that requires of prior authorisation
based on opinion of the military authority in
areas important for the defence in Italy for real
property acquisition if it is limited to
non-nationals. External security, when there are
real specific and serious risks, is a justified
cause to limit the freedom of capital movement.
It has to be done without discrimination
according to the principle of proportionality -
by an appropriate and necessary measure to
achieve the legitimate end
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ØHans Reisch (C-515/99), from 2002, to achieve
regional planning objectives authorization prior
to acquisition is not necessary, harsh sanctions
and other ex post facto legal instruments are
sufficient ØDoris Salzmann (C-300/01), from
2003, restated the principles from the earlier
two cases, adding that to achieve town planning
objectives, prior authorisation involves
discretion which is prone to discrimination
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Ø     Margarethe Ospelt (C-452/01), from 2003,
allows a prior authorisation scheme to restrict
the acquisition of agriculture and forestry land
because it is necessary to assure the continued
farming of the land. No discretion is guaranteed
by objective criteria and availability of legal
remedy. The requirement that the land must be
farmed by owners themselves was an undue
limitation of the free movement of capital.
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5. Some member states notwithstanding the
obligations under the Treaties on which the
European Union is founded, may maintain its
existing legislation regarding legal areas such
as secondary residences, agriculture and forestry
and for a period of time from the date of
accession. (Specific exceptions or Derogations)
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ØBeck (C-355/97), from 1999, the existing
legislation in the case of Austrian (Tyrolienne)
regarding acquisition of secondary residence for
non nationals can be changed after accession and
remains covered by derogation if it is in
substance identical to the previous legislation
or limits existing obstacles on freedoms from the
Treaty. Setting of new procedures or new
obstacles cannot be treated as existing
legislation
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Ø     Transitional periods range from five to
seven years, Poland has a twelve years in the
area of agricultural land and forests
acquisition ØAuthorization procedures for
secondary residence can be introduced by most of
new member states (except Slovenia), but only
under conditions basically defined by case law of
ECJ - objective, stable, transparent and public
criteria. These criteria shall be applied in a
non-discriminatory manner Ø Agriculture land
and forests acquisition can be limited in a
discriminatory fashion - most evidently in
Poland Ø Most favoured national treatment
limits the standstill clause