Creation and conveyance of real
property rights on Blockchain
Technology: A conciliation between real
property principles and Blockchain
functions?
Javier Ceba Vega
Supervisor: Selma de Groot Master Thesis
L.L.M. European Private Law – University of Amsterdam June – 2018
Abstract
Blockchain Technology represents a development in the transfer of rival values in a safe, transparent, quick and cost-free new method. Its modality also allows the representation of any tangible good in the digital world to facilitate the creation and transfer of property rights. Although it also allows the digital representation of immovables, the already-existing real property systems in Civil Law countries depart from pre-established rules to limit the number of property rights, determine the legal consequences of publicity, require the conditions to transfer a property right and protect third parties. This means that the attractiveness of this new technology to reduce transaction costs, make information reliable and reduce the time of transactions can be diminished by a disruptive effect in the legal framework of real property. The present paper aims to examine the alternative implementations of Blockchain Technology to outperform certain rules while adhering to the principles of real property Law and examine its adaptation to the different models of conveyance in Civil Law systems. It is also the purpose of this paper to draft certain recommendations to be considered while introducing a Blockchain-based system of conveyance of real property rights.
Index
Chapter I: Introduction...4
Chapter II: Real property rights in Civil Law systems and the functioning of Blockchain Technology (‘Propaedeutic’)...6
Chapter III: The starting of blocks: safeguarding the principles of ´numerus clausus´ and transparency (‘Genesis’)...12
Chapter IV: Transferring real property rights: dealing different models of title acquisition (‘Exodus’). . .22
Chapter V: Conflicting property rights: conciliation with priority rules (‘Leviticus’)...29
Chapter VI: Recommendations for the implementation of BCT in transferral of real property rights (‘Numbers’)...33
Chapter VII: Conclusions (‘Deuteronomy’)...36
Chapter I: Introduction
Since the arrival of Blockchain Technology (BTC) in 20091, it has threatened to revolutionize many
economic sectors by introducing the benefits of this ground-breaking technology in many fields. Its original implementation in the financial sector by its inventors aimed to reduce the role of financial intermediary institutions while making transfers cheaper, safer and faster. These goals are achieved by creating a ´peer-to-peer´ distributed ledger recording cryptographically all the transactions that nobody could control individually but everybody could verify and trust due to its immutability. This new system allows, among other things, to easily proof and transfer a property title over certain values represented in a digital wallet.
The main rationale behind BCT was to sort out some financial market inefficiencies and solve the double-spending issues by bringing new opportunities and solutions2. Despite the uncertainties of
benefiting from it, real property has been one of the firm candidate areas to introduce BCT due to the potentials on security in title transactions and costs reduction that it could bring. In this regard, there are two sound reasons to speculate with the implementation of BCT and transfer of real property rights; firstly, the pre-established system of land registries and legal checks offer a yardstick to compare the performance of future alternatives. It also offers a broad range of implementation opportunities where BCT could take over certain amount of transaction functions depending on the possible scenarios. Secondly, real property struggles with high transaction costs that are thought to remain immutable. Although immovables are easy to find, they are difficult to discover due to the possible existence of undisclosed information that makes legal description costly. In fact, little time has passed until we witnessed the first real property transaction vested through cryptographic terms in BCT: In September 2017 an apartment located in Ukraine was sold through BCT after being represented digitally as a ´coloured coin´3 in exchange for a certain amount of cryptocurrencies4. This
case referring to a real estate transaction raises many questions: can the implementation of BCT in
1 Nakamoto, S. (2008) ‘Bitcoin: A Peer-to-Peer Electronic Cash System’. Available from https://bitcoin.org/bitcoin.pdf. 2 Tapscott, A., Tapscott D. (2017) ‘How Blockchain Is Changing Finance’. Harvard Business Review. Available from:
https://hbr.org/2017/03/how-blockchain-is-changing-finance.
3 The concept ´colored coin´ refers to virtual codes representing goods of the offline world (e.g. bonds, shares, retails,
etc.). Unlike the regular cryptocurrencies, these coins are ´colored´ with specific attributes and information regarding the real object they want to represent, turning them into tokens with an infungible nature. This technique allows the representation of almost anything. For more information, consult: Rosenfeld, M. (2012) ´Overview of Colored Coins´, available from: https://bitcoil.co.il/BitcoinX.pdf.
4 Heaven, D. (2017) ‘Need a home? Put a blockchain on it’, New Scientist. New Scientist, 14 October 2017, Vol. 236
real property do without (or substitute up to a certain point) the real property regulations? Is it actually possible to reduce the transaction costs or, on the other hand, property Law is performing functions that BCT cannot substitute and thus, its costs are unavoidable? Is security guaranteed by BCT or it transfers all the security problems to the digital sphere bringing even less trustworthiness? How can such technology interplay with the principles of publicity and transparency granted by the land registries and protect property rights through codes? Would the State ultimately give in its monopoly on real property regulation and limitation of rights and allow a distributed system to monitor real property rights?
Despite the doubts are many, this paper aims to analyse whether the implementation of BCT can improve the principles and rules governing the conveyance of real property rights in Civil Law systems. In order to engage with this question, special emphasis is put on three scenarios: the maintenance of the ´numerus clausus´ and transparency principle, the possible adaptation to different property transfer models and the priority rules in case of conflict between different titles. This work will also draft some prescriptive considerations to be regarded while engaging with future conceptual and practical regulations aiming to integrate BCT in real property rules. In order to answer our question, this study will summarize in chapter II the main tenets of real property Law in Civil Law systems and a succinctly explain the BCT functions (´Propaedeutic´). Chapter III will explore the models that BCT can offer to maintain (or ameliorate) the principles of ´numerus clausus´ and transparency (´Genesis´). Chapter IV will reflect on how to introduce BCT into the different Civil Law models of title acquisition and what would be the different handicaps for each system (´Exodus
´). In Chapter V two examples of conflicting property rights will be presented and dive into the
possible alternatives of priority solution while implementing BCT (´Leviticus´). Chapter VI will present some proposals to be considered in a prospective introduction of BCT in the realm of real property transfers (´Numbers´) and lastly, Chapter VII will conclude with the main findings (´Deuteronomy´).
Chapter II: Real property rights in Civil Law systems and the functioning of Blockchain Technology (‘Propaedeutic’)
What is property Law about?
Why do we have property rights in contrast with obligational rights? Property Law deals with the entitlements and rights of individuals over goods in contrast to rights and entitlements among individuals studied by the Law of obligations. According to the scholarly of economics, the outset of property Law can be traced back to the theory of scarcity of resources which justifies specific rules not only to protect certain entitlements over limited goods (especially land), but also a public intervention to regulate with mandatory rules the creation, modification, transfer and destruction of entitlements56.
Those circumstances justify the stronger effect and preference of property rights over obligational ones in case of conflict, which is accompanied by the following principles: First, property rights have an ‘erga omnes’ effect which means that they can be opposed against everybody and not only ´vis á
vis´ certain individuals, as is the case of obligational rights. Any factual or legal relation of a third
party with an object that contradicts a property right would be sufficient to activate the effect of the property right against anybody in such a situation. Secondly, property rights are exceptional, which means that obligational rights are the rule and certain justifications are needed to create a property right. The far-reaching consequences of property rights in the legal and economic system makes them acceptable only if a reason exists. Finally, property rights are characterized by a set of mandatory rules that constrain the freedom of private parties to determine the content of the rights. All the Civil Law systems share four common rules stemming from Roman Law7: the ´nemo dat,
portior iure´ rule or incapacity to dispose from a right beyond its content; the ´prior tempore portior iure´ rule or preference of the older property right over the younger one; the priority of a limited
right over fuller right provided the former have been created with the consent of the fuller right holder; and the protection rule or right to claim the good from anyone who has the object under their sphere of influence.
5 Van Erp, S., (2012) ´Cases, Materials and Text on Property Law´. Oxford; Portland, Or.: Hart Pub. 2012., p. 38. 6 This original justification is still valid nowadays for the immovable property rights and the need to assure a public
order. However, some authors highlight that scarcity cannot justify property Law in certain fields where that problem is not reproduced anymore. See as an example: Faraci, D., (2014) ´Do Property Rights Presuppose Scarcity?´, Journal of Business Ethics, Vol. 125, No. 3 (December 2014), pp. 531-537.
7 Extended explanations on this topic can be found in: Van Erp, J. (2006) ´European and National Property Law: Osmosis
Before these principles and rules can be applied, a relationship has to overcome two filters to be categorized as a property right; these are the ´numerus clausus´ and the transparency requirements. The ´numerus clausus´ rule is the main manifestation of the property rights exceptional consideration, which means that parties are not free to classify a relation as a property right8. It is the
legislator the only authority entitled to recognize and expand the number of property rights that can be affected by certain protections (e.g. The acquisition of goods by third parties) and limitations (e.g. The possibility to transfer a good ´a non domino´). On the other hand, the requirement of transparency is an elemental condition for the ´erga omnes´ effect of property rights: it is essential that any property right can be recognized as such by anybody else. The recognition by third parties is achieved by means of its specificity regarding the boundaries of the object, its legal content and the publicity of the right. This publicity is achieved by registration in the case of immovable goods. As will be explained in Chapter III, in some Civil Law systems registration not only achieves the publicity purpose, but also can determine the constitution of a property right, as is the case of ownership and security rights9.
Before introducing the code system in the following section, it is important to emphasize that real property Law encloses many considerations regarding factual circumstances and outcome rules fruit from a balancing between the principles of public faith and certainty of economic transactions on the one hand, and title protection on the other. This means that any technological implementation that aims to simplify or substitute legal rules by more efficient computational codes need to take into consideration the possibility to maintain the principles resulting from a thorough legal reasoning, allow the exercise of legal gatekeeping controls to avoid incompatibilities with property Law and, if possible, increase the standard protection of these principles.
Structure and functions of Blockchain Technology
Blockchain is a disruptive technology that combines a ´peer-to-peer´ system and a distributed network between nodes to generate alternative solutions to many transaction issues. This computational system was ideally devised by an anonymous user who nicknamed himself Satoshi Nakamoto and proposed in a white paper an alternative method to grant transparent and safe cash transfers in real time reducing the dependency on gate-keeping intervention and middleman costs10. 8 Akkermans, B. (2008) ´The Principle of Numerus Clausus in European Property Law´, Maastricht University, 1 Jan.
2008, p. 566.
9 Van Erp , 2012, p. 66. 10 Nakamoto, 2008, p. 8.
Although the initial implications of this distributed system were to overcome financial and cash flow issues, scholars and pundits have identified many sectors where BCT could be implemented11. This
working paper does not aim to offer a thorough explanation of the BCT technicalities12.
Nevertheless, it is crucial to understand the essence of this computerized system and the new solutions that bring to old problems, which can be represented with the following example:
Money is an asset that we regularly exchange in daily transactions either with notes or electronic transfers by means of bank accounts. Using a bank account allows us to represent digitally a wallet. Yet this system of recording numbers and transactions is controlled by centralized networks in the hands of financial institutions which cannot validate the transfers automatically due to the huge amount of operations to be checked. As a result, these transfers take among 5 and 7 days to be validated and these clearance and ledger-keeping activities have a cost for the bank, which is charged as a financial fee to the user. Moreover, in case of commercial transfers the parties need to appoint a third party that temporarily holds any payment as a result of the lack of trustworthiness among them. These conditions increase the costs, delay the transactions and require the intervention of intermediary institutions.
How BCT overcome these problems? The initial idea to depict is the distributed ledger in which the system operates; this ledger is a recording of all the transactions that occurs between all the participants and it remains publicly accessible to all of them instead of being managed and owned by a centralized institution. These participants (also called ´nodes´) exercise collective control over the ledger with none of them being able to exercise individual power. Everybody can have access to the whole recording of transactions at the same time that the identity of its participants remains anonymous due to the cryptographically-encoded writing method. In this publicly-distributed ledger, all the assets (monies in our example) are ´tokenized´ into new cryptocurrencies which represents the number of units that each user owns in their digital wallets. Every time a transaction occurs between two participants, the sender has to proof their ownership through a key address. By introducing the transaction into the Blockchain system and a public key encryption (input), the sender generates an output in the form of a hash, which is an aleatory cryptographic code. The receiver can verify this transaction through a mathematical algorithmic function which consists on introducing the cryptographic code of the transaction and a private key to verify that the transaction actually
11 Many of these implementations are highlighted by Swan, M. (2017) ´Blockchain; Blueprint for a new economy´, O
´Reilly, Sebastropol.
12 A more developed explanation of BCT for non-computer designers can be found in Drescher, D. (2017) ´Blockchain
corresponds to the public key of the sender13. Once the transaction is concluded and sent to the
distributed network, the Blockchain system confirms (or refuses) the transactions using a group consensus mechanism called ´Proof-of-Work´. This mechanism enables the maintenance of a single undisputed record of the transactions by issuing a mathematical problem to be solved by the other computers participating in the distributed ledger (the so called ´nodes´). This computational problem, which is difficult to solve, allows a consensus protocol to easily verify the transactions. All the nodes would have to invest computer resources to solve the mathematical problem and once solved, the operation is inserted into the public ledger as a new ´block´ which contains a time-stamped signature of the verified transaction and a header with the code of the previous transaction. This connection with the prior block links all the transactions in an immutable chain which makes it practically impossible to modify since the whole block of chains (i. e. All the transactions) would need to be hacked and tampered from scratch14. This system is updated every 10 minutes and all the nodes
would automatically recognize the verified transaction immediately. In order to compensate the investment of computational resources, a little award of cryptocurrencies is given to the node that first solved the mathematical problem (also known as ‘miners’)15.
13 The public and private keys are used to encrypt and decrypt the information flow respectively. Borrowing the metaphor
coined by Drescher (2017), the usage of these two keys can be compared with a mailbox; the public key would represent the address to which a message is sent while the private key is the tool that allows the owner to open the mailbox and withdraw the content.
14 Hoffmann, E., et. Al. (2018) ´Supply Chain Finance and Blockchain Technology, the case of reverse securitisation´,
Springers, p. 35 – 42.
Figure created by the author based on the graphic depicted in Hoffman, 2018, p. 38.
This computational system reaches different outcomes that can be explained with the following four features16:
Firstly, BCT achieves a system of trustworthiness by avoiding mistakes and granting that all the public information recorded in the ledger is certain. The hash-based algorithms that make the distributed ledger work ensure that the information is authenticated and time-stamped, reflecting not only the transaction itself, but also the specific moment where the transaction happens. This mechanism allows parties to bypass the intervention of trusted intermediaries that have been essential hitherto to grant confidence between the parties involved.
Secondly, BCT is characterized by its security. All the transactions and information stored in the public ledger in the form of cryptographic data remains immutable due to the subsequent connection of the hashed blocks. This record confirms the integrity and immutability of data by reflecting a clear chain of transfers and ownership capable to track the different operations and legal titles in certain moments. This system avoids the possibility to introduce external inputs into the network through its validity filter of confirmed transactions and makes it practically impossible to hack the information stored in a single or various computers since the record is kept by all the nodes participating in the distributed network system. This distributed system has no point of failure and in case of a hack or computer security weakness the rest of the nodes can take over the activity17.
16 Würst, K; Gervais, A., (2017) ´Do you need a blockchain?´ ETH Zurich, p. 2.
17 Some technical problems have been signalled by the experts, but many of them remark that these technical problems
Thirdly, BCT grants a high level of efficiency by reducing the costs of transaction as mentioned above. This technological system allows the representation of any value into tokens using cryptographic codes while all the participants in the network can transfer any title by using the public and private keys. All the transactions are confirmed and validated in real time without the need to incur in extra activities like post-transaction confirmation, clearing and settlement costs, due diligence programs or information-gathering.
Lastly, BCT supposes a high level of transparency by allowing participants to have access to the whole data recorded in the ledger in real-time. Surprisingly, neither of the nodes knows each other and no personal data is stored in the public ledger. However, the participants are granted access to trusted data, which provides confidence on the transactions and the objective information rather than the parties themselves. This should enhance the willingness of parties to enter to transactions since any problem of information enrichment is avoided.
Although it seems that BCT can substitute some of the developments in the different stages of real property transfer, some other rules and principles of property Law may still require a legal gatekeeping control that cannot be substituted by a ´peer-to-peer´ system. The next chapter aims to analyse the principles of ´numerus clausus´ and transparency in property Law and explore the possibilities of BCT implementation by adapting its functions and allowing legal controls.
Chapter III: The starting of blocks: safeguarding the principles of ´numerus clausus´ and transparency (‘Genesis’).
Numerus clausus ´ and limitation of property rights
While recording for the first time the tokens representing immovable goods in the chain of blocks and the property titles governing them, the first issue that needs to be addressed is the possible maintenance of the ´numerus clausus´ principle. As seen above, this is one of the two prior filters in all legal orders to recognize any property right as such and it refers to the idea that not only the number of property rights are restricted but also the content of them remains outside of the party autonomy that defines the Law of obligations. It allows a high level of legal certainty since third parties can predict and foresee the consequences of the property rights while dealing with the goods in the market. There are many scholars who have justified the maintenance of the ´numerus clausus´ principle from an economic perspective arguing that it is necessary to prevent the potential existence of other prospective rights that could eclipse ownership and diminish the marketability of land because that burden would ultimately reduce the transferability of immovables18.
In this sense, not only can BCT efficiently help to keep a standard menu of property rights, but also reduce the information costs incurred by any party by simplifying a title code in automate basis. Standardization of property rights has been a necessary measure taken by legislators and land registrars to set a cap on information costs and grant a high level of commercial certainty19, but BCT
can outperform the conventional standardization by a modular system20 that reduces clearance
hurdles and simplifies a massive literature of deeds while tracking the titles that encumber the land. To achieve this, the first step is to represent the land existing in the offline world into a token. These tokens are basically coins that are ´coloured´ with specific attributes and features defining the immovable good, which are therefore called ´coloured coins´21. This furnishing process of tokens
allows the representation of practically any asset. However, in order to be legitimately accepted by Blockchain, the nodes need to satisfy additional requirements that may lead to extra burdens while
18 Rudden, B. (1987) ‘Economic Theory v. Property Law: The Numerus Clausus Problem’, Eekelaar, John, and Bell,
John (Eds.), Oxford Essays on Jurisprudence, 3rd edition, Oxford: Clarendon Press 1987, p. 239.
19 Akkermans, B. (2015) ´The Numerus Clausus of Property Rights´, M. Graziadei and L. Smith, eds., Comparative
Property Law: Global Perspectives, Cheltenham: Edward Elgar, Maastricht Faculty of Law Working Paper No. 2015/10, p. 12.
20 Fairfield, Joshua A. T. (2015), ´BitProperty´, Southern California Law Review, 2015, Vol.88(4), pp. 847 – 848. 21 Rosenfeld, M. (2012) ´Overview of colored coins´. Available from: https://bitcoil.co.il/BitcoinX.pdf
running a node. The limitation of property rights becomes necessary to avoid excess of inputs that may crash the protocol and make the outputs not correspond with the inputs22; in other words, if the
hash options are not limited, it may become impossible to track and identify the chain of titles every time they are transferred.
In order to limit the excess of information and avoid a possible contradiction of outputs regarding the property titles, the solution would be to define the inputs in advance before starting to create the tokens from the outset. In this sense, the idea would be to ´colour´ the coins not only with the features and the physical characteristics of the land, but also to define a colour for each property category and a sub-colour for any specific right so that the computing system would recognize easily the title created or transferred and the (in)compatibility with other titles, making information easy to trace. The following code of colours for each category with sub-colours for every single right is given below as an example:
Category Sub-category
Code 1# = Ownership rights (Red) Code 1.1# = Full ownership (Pink) Code 1.2# = Co-ownership (Magenta) Code 1.3# = Bare ownership (Salmon) Code 1.4# = Trust (Orange)
Code 2# = Security rights (Green) Code 2.1# = Hypotheque (Turquoise) Code 2.1# = Pledge (Bordeaux) Code 2.1# = Charge (Cyan) Code 2.1# = Title retention (Brown) Code 3# = Rights of use (Yellow) Code 3.1# = Use (Burgundy)
Code 3.2# = Habitation (Green yellow) Code 3.3# = Usufruct (Dark yellow) Code 3.4# = Servitude (Grey)
Code 3.4.1# = Praedial servitude (Light grey) Code 3.4.2# = Way-leave servitude (Dark grey) Code 3.4.3# = Water servitude (Black)
Code 3.5# = Superficie (Flesh pink) Code 3.6# = Emphyteusis (Olive green) Code 4# = Acquisition rights (Blue) Code 4.1# = Pre-emption (Sky blue)
Code 4.2# = Refusal (Purple)
This mechanism could substantially facilitate the gate-keeping functions of notaries and land registrars while qualifying and verifying a right and thus lowering significantly the transaction costs. At the same time, the network would prevent non-property rights having access to the coin
description and blurring the distinction between personal and property rights23. Although the
Blockchain system offers to keep an efficient standardization of the ´numerus clausus´ principle, it encounters two major issues that need to be addressed: first, the incapability to adapt to the flexible content in those rights where the regulations are more relaxed, and second the possibility to accept the creation and modification of new property rights.
Regarding the first issue, some scholars have underlined the existing tension between the strict regulatory rules of property Law and the flexible transactional rules of those legal branches governing the acquisition and creation of property rights, such as contract, family and succession Law24. As usual, property titles need an initial legal act that generates the circumstances to transfer
those titles. Contract, family and succession Law usually provide certain conditions and arrangements that are essential for the existing functioning of property Law and transfer of titles. The possibility of parties in those legal fields to introduce certain agreements and the strict boundaries of property Law are sometimes balanced by relaxing the internal rules of property rights and allowing parties to establish certain conditions into the property title (e.g. By defining the particularities of the servitude, the (i)revocability of a trust, the extension of the benefits to be perceived by a usufruct or distributing the aliquot part among co-owners). Although it is not the purpose of this paper to study the legal acts that generate the property titles, it is important to underline that there would still remain a descriptive information of the property right introduced in the ´coloured coins´ that is not strictly a code and it would have a negative impact while running the nodes if the information is excessive as described above. That would also have two legal consequences: the first one is that the physical description of the asset would be mixed with the legal description of the title, bringing some confusion and requiring the intervention of legal experts to exercise a due diligence analysis in each transaction. The second legal consequence is the negative impact on legal certainty while limiting the information of the coins to prevent any breakdown of the running nodes or the hashed blocks produced. The less precise the information is, the more doubts generated while exercising a right. Since its existence, Blockchain protocols have been amended by computer designers to overcome technical problems and allow a more efficient performance25. It is clear that the descriptive input 23 That is not to say that obligational rights cannot have access to the Blockchain, but these rights would remain outside
the description of the ´coloured coins´ as smart contracts that are automatically performed. In fact, one of the main confusions brought by one of the first white papers on smart contracts has been the incapacity to understand and distinguish between property and obligational rights due to the lack of legal expertise of his author. See, for example: Szabo, N. (1997) ´Formalizing and Securing Relationships on Public Networks´, First Monday, Sep. 1997. Available from: http://ojphi.org/ojs/index.php/fm/article/view/548/469.
24 Akkermans, 2015, p. 9.
25 See the guideline of ´Programming the Blockchain in C#´ available from https://
problem would need more examination while amending the protocol, but by the time this informational problem is not sorted by developers, the only temporary solution available is to extend the standardization process to the descriptive inputs of the ´coloured coins´. In this sense, introducing a digital form that frames the input information and limits the number of characters would help to keep the information concise and not very extensive26.
The second issue concerns the rise of new rights embodied in property forms in several Civil Law systems such as timeshare rights and trusts. This is a strong argument for those scholars that claim a more flexible application of the ´numerus clausus´ principle to grant a secure development and adaptation to new factual situations27. The system of codes that we drafted above would prevent a
domino effect of new property rights being recognized without the prior registration in the protocol. In cases such as the French legal system where the judiciary has also recognized new property rights not enacted by the legislator in the civil code it adds an extra degree of flexibility that clashes with the Blockchain automation process. This clash between the rigidity of Blockchain codes and the renewal of the property rights menu can only be addressed by updating the Blockchain protocol to make sure that new ´colours´ are introduced. This means that certain legal gate-keeping functions would not be totally erased but modified and anticipated to prior stages before any title can be transferred. Notaries and land registrars would be required to step into the breach while controlling the network protocol and it raises the question whether notaries or registrars should be in control of the Blockchain nodes and use a private distributed ledger instead of granting access to any user. This issue would be addressed in the following section.
Transparency and reliability of the information stored
Apart from the ‘numerus clausus’ principle, transparency is the second filter that needs to be crossed to acknowledge a property right as such. In order to have an ‘erga omnes’ and binding effect against third parties it is essential for a property right that those third parties have the opportunity to be thoroughly informed about the existence and the content of such rights. As pointed out by some scholars, the mandate to make available a minimum degree of the physical and legal information regarding the object is narrowly related to the essence of ensuring the rule of Law28. That 26 The benefits of modular information (i.e.: The packaging of information about property in a way that remains
constrained and clear inputs and outputs) are highlighted by Fairfield, 2015, p. 848.
27 Van Erp, S. (2003) ´A Numerus Quasi-Clausus of Property Rights as a Constitutive Element of a Future European
Property Law?´, Vol. 7.2 Electronic Journal of Comparative Law, June 2003.
requirement not only involves the mere availability of information, but also making sure that a certain level of clarity and accuracy is reached to enhance trust to the outside world29.
From an economic perspective, establishing certainty and information allowance over real property titles also ensures an efficient performance of the market; making trusted information available increases the transferability of titles by creating confidence and also facilitates access to capital markets by ensuring the entitlement and other legal aspects over goods intended to be collateralized. Nevertheless, immovable goods are not like any other assets we deal with on a daily basis: their complexity, uniqueness and the legal characteristics turns information gathering into a difficult task30.
The prior process of research and information compiling before a real transaction takes place entails a costly and time-consuming activity that cannot be avoided if the unknown contracting parties want to prevent any risk in the transaction. In this sense, land registries are core institutions while complying with the transparency principle; they ensure that all the important information referring to a plot of land or building is published and accessible to anyone whereas it attempts to eliminate uncertainties and possible information asymmetries among the parties that can be detrimental to ensure trustworthiness31. Yet perhaps the most important function of land registries is to ultimately
achieve a preventive justice that would avoid ‘ex post’ costs incurred by misinformed parties while solving their disputes in court proceedings, causing therefore many social costs32.
Although land registries significantly improve disclosure of information, no registry system can guarantee that this information is fully accurate because otherwise the full amount of the transparency costs would be transferred to the State, including possible liabilities in case of mistake33. However, there are two main publicity systems of real property rights in the continental
Europe that differ from the scope of public faith protection and the level of trustworthiness
29 Akkermans, 2015, p. 7.
30 Arruñada, B. (2007) ‘Market and institutional determinants in the regulation of conveyancers’ European Journal of
Law and Economics, 2007, p. 93.
31 Arruñada, B. (2012) ´Institutional Foundations of Impersonal Exchange´, The University of Chicago Press, 2012, 38. p
58.
32 Limmer, P. (2013) ‘Property Transactions and Certainty of Title Transfer’, European Property Law Journal, Vol. 2,
Issue 3 (Dec 2013), p. 397.
33 Martínez Velencoso, L. (2013) ‘Transfer of Immovable and Systems of Publicity in the Western World: An
guaranteed: On the one hand, title registration systems like the German model ensure that the right is transferred once the inscription of such title has access to the land registry, requiring the declaration of express consent of the title holder affected by the new title before the registrar (apart from the prior contract entered by the parties). This inscription process substitutes any act of delivery (‘traditio’) and ensures that no contradictory titles can exist in the registry at the same time that it requires a more active role of registrars in their legal gatekeeping functions. This system mirrors a better accuracy of the information registered and a more synchronized correlation with the real world. On the other hand, deed registration systems like the French, Italian or Belgian allow more flexible access of deeds affecting property rights to the land registry. This means that the land registry does not guarantee that any title registered is a true title, restraining its functions to the mere publicity of those documents that have been recorded concerning a plot of land. That leaves land registries in those systems to the residual function of making them useful only when a person acting according to the information registered invokes their right against third parties34 (i.e.: Third party
protection). Even though the title registration system may appear to grant a higher level of trust over property rights, it is important to highlight that the transaction costs related to transparency are not significantly diminished in one publicity system in comparison with the other; whereas deed registration systems suppose lower registry costs and the assumption of more risks and uncertainty that are absorbed within the private market, the title registration systems incorporate higher service fees for the publicity system offered by the State35.
Initially it would seem that BCT functions and the transparency principle in property Law have common grounds; both are designed to ensure a high level of trust, make all the information available between unknown parties and reduce transaction costs. Yet BCT may face few challenges while implementing its functioning process in three different stages: firstly, there may be some controversies when trust is generated by keeping control of the information by a single authority and not by the whole participants of a distributed ledger. Secondly, the different registration and publicity systems may react differently to the implementation of BCT functions (or even reject it). And finally, it might be the case that, although BCT can substitute land registry functions in certain publicity systems, its functions are inoperative when it comes to the transaction process.
34 Martínez Velencoso, 2013, pp. 164 – 167.
35 Arruñada, B., (2003) ‘Property Enforcement as Organized Consent’, Journal of Law, Economics, and Organization,
Regarding the first issue, BCT and land registration mechanisms have different methods to build up a trust system. A Blockchain distributed ledger system can successfully guarantee that a property title hold by a single person is not contradicted by any other title36 and increase the registration speed
avoiding slow calification processes that could keep misguiding information not updated for a longer time. However, publicity in Civil Law systems are known by their third-party protection rules in case of title conflicts and some institution should eventually guarantee that digital codes in the distributed ledger actually represent the immovable goods of the offline world in case of a conflict. In this regard, while introducing all the physical and legal description in the genesis blocks as part of the Blockchain ledger, it is essential to ensure a public gate control that can determine how this information is registered. Furthermore, there may be lots of problems regarding the private keys that represent assets and are essential to encrypt future transactions; think for example what would happen if a title holder loses the key or passes away causing an impediment to unlock the title. But these matters could be much worse if a transfer or a title is established (or reversed) by a court decision, requiring the active role of the key holder to introduce the information in the Blockchain since otherwise the data would remain immutable. They could simply refuse to obey the court decision or even modify the descriptive information of the asset to commit a fraud. This would be bound to diminish any trust created by a public distributed ledger with no institution in control. Instead of creating a public distributed ledger, a private or permissioned Blockchain ledger could be established to solve this problem. This would restrict access to a closed number of nodes or ´miners´ that can introduce information and hash new blocks on the ledger and ensure that the system remains centralised and controlled by a single organisation37. A private distributed ledger would make sure
that certain information is corrected and private keys are recoverable at the same time that the information could be publicly consulted.
The question that follows is who should be in control of this system; some scholars argue that in case that a private distributed ledger is implemented, it should be controlled by land registries while justifying a limitation of its purpose to mere publicity issues38. Other authors claim that such a
system could be jointly controlled by registrars and notaries acting as nodes39, whereas other authors 36 Vos, V. (2017) ’Blockchain and Land Administration: a happy marriage?’; European Property Law Journal. Volume 6,
Issue 3 (Dec 2017), p. 297.
37 Hoffman, 2018, p. 42.
38 Nogueroles, N. and Martinez García, E. J. (2017) ‘Blockchain and Land Registration Systems’; European Property
Law Journal. Volume 6, Issue 3 (Dec. 2017), p. 307.
39 Verheye, B. (2017) ‘Real estate publicity in a blockchain world: a critical assessment’; European Property Law
completely reject any implementation of this system for its impossibility to allocate the risks40. In our
opinion, the notaries should be the preferred candidates in control of the Blockchain network by running the network nodes. This is mainly justified by two sound reasons: firstly, any transaction deemed to be registered for a publicity purpose always requires the prior intervention of a notary who clearly designates the deal in detail avoiding unambiguity in preliminary negotiations. Notaries play a key role in achieving public faith protection in their prior intervention by examining the transaction under the Law of obligations and assessing the title and capacity of the parties to dispose. Notaries have acquired a considerable relevance in all civil Law systems by preventing that parties with no-technical expertise could be put into a weaker position during the clearance proceedings, making their involvement in real property transfer compulsory to carry out a control of legality41.
Secondly, BCT is called to solve transferability issues and go beyond the mere publicity and information allowance. If a Blockchain system is kept under the control of registrars and solely implemented to overcome certain processes, then its potential would be restrained to simply improve the transparency principle while it can also reduce other clearance and transaction costs. These arguments would motivate a system where notaries would take up a more active role in the process with new tasks such as keeping the private keys for transferral purpose and granting public access to the Blockchain information, but also it would significantly reduce other tasks such as information compiling and ensuring their legality. However, as it will be explained in the next chapter, some conveyance systems may encounter difficulties to relinquish certain controls to the benefit of the notaries.
On a second stage, it may be the case that the different publicity systems (title registration or deed registration) would have a different response to a Blockchain implementation. ´A prima faciae´ it would seem that the impossibility of incompatible registered rights and the title acquisition by registration makes title registration models more attractive for a BCT implementation because the trust that can be brought by Blockchain is equivalent not only in terms of publicity but also regarding title acquisition. Deed registration systems would be disrupted by a new system that can ensure title rights and not only remain passive by means of publicising the deeds registered. This would raise the question whether deed registration systems are actually guaranteeing trust because the passive role of the registrars shifts any legal control responsibility to the private parties who have to remain
40 Thomas, R. (2017) ‘Blockchain’s incompatibility for use as a land registry: issues of definition, feasibility and risk’;
European Property Law Journal. Volume 6, Issue 3 (Dec 2017), pp. 387–391. The author keeps an sceptical approach to Blockchain implementation on land registry systems in common Law systems where the property Law tenets are considerably different from the Civil Law systems.
particularly proactive in the information seeking process. Although this issue is not the goal of the current research, it is important to highlight that BCT can be implemented in any system regardless of the publicity mechanism; title registration systems would likely be more benefitted in many functions with the implementation of a private distributed ledger, whereas deed registration models could be kept as an extra source of publicity for the sake of third party protection, allowing the parties to simply check the information stored on Blockchain or on the other hand contrast it with the land registry information. In fact, BCT would guarantee a better accuracy of titles and ensure a better level of preventive justice in the latter system. In other words, BCT would be ´absorbed´ by title registration systems while in the deed registration systems it would represent an extra layer of information publicity that could coexist with the land registry system.
Borrowing the proposal from Verheye (2017), the information recorded on the Blockchain ledger could be publicly available through access on an internet platform containing a digital package with all the data stored regarding each immovable. Nevertheless, this free access may bring many privacy and publicity controversies in different jurisdictions because it may be the case that a vested interest should be proven before getting access to such a sensitive information regarding private data and solvency of the title holder42. Even though this issue is neither part of our research, limiting access to
the information can be achieved by allowing only the notaries to hold the public keys that decrypt the Blockchain data and establish an interest control before offering this service4344.
Lastly, the third issue concerns the possibility to implement BCT beyond publicity goals. As it has been stated above, some systems may find Blockchain functions inoperative when it comes to the transfer process because they depart from a different protection scope of public faith rather than legal reality. Furthermore, the State would be reluctant to give way on its publicity function control through land registries paying a dim view to the possible control in terms of effectiveness that could be exercised by notaries. However, if a Blockchain-based ledger can grant more efficient means of publicity without allowing incompatibility of titles and trust is already generated by the prior notary intervention, at least it would seem that there is no good argument to oppose a Blockchain-based ledger implementation on title conveyance. Furthermore, the third party protection rules could be maintained in deed recording systems, although its implementation would be reduced to certain
42 Under Austrian Law the register would be open to anyone (Paragraph 7 Grundbuchgesetz) whereas under German Law
it would be restricted to those who have a prior legitimate reason to access the information (Paragraph 12 Grundbuchordnung).
43 More information regarding the privacy issues in BCT can be consulted in Swan, 2017, p. 442. 44 Nogueroles, 2017, p. 311.
specific cases. In fact, the introduction of a private ledger in real property transfers would contradict the ´peer-to-peer´ model that gave birth to Blockchain because the original idea was to impede any centralised control over the network. The model proposed in our research would subordinate the functions of BCT to the tenets of property Law, making the last principles prevail over the former.
Chapter IV: Transferring real property rights: dealing different models of title acquisition (‘Exodus’)
Three different models of immovable transfer
BCT permits a new method of transferring value on an internet-based technology system, especially when rights affect intangible and not conflicting goods (e.g. Intellectual property rights). However, when it comes to tangible assets ‘tokenized’ in the digital sphere it may find some contradictions with the classic idea of physical transfer of goods; the need of different stages of consent in some legal systems and the requirement of physical delivery of the asset is not possible to occur on the digital sphere. It seems that it can get more complicated when it comes to immovable goods and the different existing systems of transfer in Continental Europe. However, in many countries titles over immovable are conveyed through information systems that record entrances determining who the title holder is45. Even the old-dated property Law rules governing physical goods accept abstract
representation of the transfer when it comes to rights ‘in rem’. If BCT can reduce the information costs, grant undisputed legitimacy and trust over the titles recorded, property Law is deemed to be attracted by this system. Yet, the reaction of the different transfer models can be more ‘allergic’ than others leading to different alternatives on BCT implementation.
In comparative terms, real property rights can be acquired according to the legal dispositions of different branches of Law46, but the classical ‘inter vivios’ transfer is conditioned to different
requirements according to three main systems in Civil Law countries. In the first place, consensual systems (like the model largely implemented in France47) determines that the ownership passes
automatically to the new acquirer as a result of entering into a contract that imposes the obligation to the seller to make the transfer. This model totally disregards any obligation of physically handing over the possession of the estate because consensus is the only requirement to make a title transfer effective; the simple agreement of the parties is enough to recognize the buyer as the new holder of a property right48. The existence of a single act means that the transfer of the real property right
45 Fairfield, 2015, pp. 811 – 812.
46 Transfers motivated ‘mortis causae’, family Law dispositions or merging of companies, ‘inter alia’, have different
particularities and therefore are not treated in the present work.
47 The consensual transfer under the French model is established in the article 1804 Code Civil, declaring that the mere
agreement passes the right and therefore the land registry should remain as a publicity institution.
48 Graziadei, M., Smith, Lionel D., (2017) ´Comparative property law: global perspectives´, Cheltenham, UK: Edward
depends on the validity of the contract49. Although the title is automatically reversed to the former
holder in case of voidness or voidability, the consequences can differ if different threads of conflicting property rights are found at stake. The French system requires an automatic reversion of the title in case the consent of a contract is not expressed in due terms; nevertheless, if the thread of transactions is found to be longer with several intermediaries, the protection of the acquirer in good faith trusting the publicity of the land registry would prevail. Any new technique implementation under the consensual system aiming to prevent possible conflicting titles stemming from null chains of transaction would need to respect the single source of transfer by agreement and the protection of third parties.
Secondly, ‘traditio’ systems are characterized by a double stage requirement to fulfil the transfer. The contract or agreement among the parties is required to motivate the transfer (´causae traditionis ´), but unlike the consensual systems, the title has not passed to the new acquirer yet and a second act of delivery is required (´traditio´). This second act can be symbolically represented by requiring the transaction to be recorded in a notary deed (as is the case of the Spanish system50) or going a step
further and require the registration of the notary deed containing the transaction in the land registry (as is the case of the Dutch system51). These two acts keep a close connection among each other,
which means that in case of invalidity of the contract, the transfer is not considered to have been passed and the title would automatically revert to the transferor like in consensual systems. However, the party concerned would have to exercise the ‘rei vindicatio’ as an extra action in order to recover the possession of the immovable. Under these systems legal gatekeepers like notaries and land registrars are more involved in the process of transfer, reducing the possible existence of conflicting titles. Any implementation of a Blockchain-based conveyance model would have to maintain a division between these two acts and allow alternatives for title reversion in case of invalidity of the contract. In any case, the proposal of setting a private distributed ledger under the control of legal gatekeepers would facilitate the delivery requirements established in ‘traditio’ systems.
The third model is the abstract system which goes one step further in the treatment of the contract (or ‘causae traditionis’) and the delivery (or ‘traditio’). This model also requires a double act to accept a transfer as a valid transaction. But instead linking both acts, each one is ‘abstracted’ and treated
49 In case of voidability the title would revert back to the seller with retroactive effects whereas in case of voidness the
title would be considered as never been transferred to the new acquirer.
50 This requirement is established in article 1462 Código Civil. 51 This requirement is established in article 3:89 Burgerlijk Wetboek.
separately. A reference of this model is the German system which requires a double agreement: first, the agreement between the parties is needed to enter into a contract and secondly the parties must express the consent once more before the land registrar while registering the notary deed as a representation of the delivery52. As a result of this split between the two acts, the voidness or
voidability of a contract would have no effect on the transfer, which means that if the seller wants to claim an immovable back the action must be based on unjustified enrichment53. In this case a
transferral system based on BCT would have to diligently keep the abstracted acts independent from each other and prevent that any legal gatekeeper exercising prior control can substitute it in one simplified act.
Instrumental adaptation of BCT in each system
It seems that BCT would have a different implementation in each transfer system in order to make a transferral more efficient in terms of safety and time without causing disruptive effects. Adapting BCT to the tenets of each system would contribute to the idea of regarding technology as a complementary tool subjected to the rules resulting from legal reasoning54 and not as a replacement
of Law due to the evident limitations of technology to substitute legal gatekeeping functions. The referrals of BCT as a ´deux ex machiae´55 or ´code as Law´56 must be dismissed outright because it
only enables the validation but not the validity of the transfers; validation occurs when the system formally verifies any transfer of value under security standards that can be trusted whereas validity requires a thorough legal check to confirm the substantive requirements of Law57. BCT can securely
grant the terms of a transaction and the time where it takes place while adding new blocks on the chain, but it does not guarantee the validity of the contract that motivates the transaction. Furthermore, the role played by public officials vary depending on their gatekeeping functions in each transferral system: registrars play a key role in German system since registration is a requirement for transfer while notaries do so in French system where they are essential actors in
52 The requirements of the conveyance based in two agreements (agreement on the transfer and on the entry in the land
registry) is established in sections 873 Burgerliches Gesetzbuch ‘et subsequens’.
53 Graziadei, 2017, pp. 156 – 157. 54 Nogueroles, 2017, p. 304. 55 Verheye, 2017, p. 450.
56 De Filippi, P.; Hassan, S. (2016) ´Blockchain technology as a regulatory technology: From code is law to law is code´,
First Monday Journal, Vol. 21, N. 12, 5 December 2016. Available from:
http://firstmonday.org/ojs/index.php/fm/article/view/7113/5657
gathering registered and non-registered information concerning the legal status of the estate. This means that a BCT implementation in real property rights transferral can diminish the role of the latter to the detriment of the former or ´vice versa´ depending on the implemented model.
Regarding the consensual systems like France, the intervention of notaries remains crucial in order to exercise a prior check of all the relevant information affecting the legal status of the immovable and the capacity of the parties to transfer or acquire goods. Land registries remain as a publicity institution for registered deeds without any ultimate assumption of validity and for the single purpose of protecting third parties. The introduction of a Blockchain system with notaries in control by means of a private distributed ledger could be reasonably assimilated by those systems for different reasons: first, setting up a ‘permission-based’ Blockchain with a notary-node basis would avoid the need to undergo a cumbersome check of all the relevant deeds, included those which have been recorded in public documents but not registered yet. If notaries disposed of a unified and immutable register with all the transactions recorded in public documents, it would significantly facilitate research tasks with speed processes while guaranteeing security and exclusivity of the title. Second, the land registries as public institutions aiming to protect third parties would be maintained although their utility may come into question. Consensual systems are combined with ‘deed registration’ models where land registries remain with a merely formal and passive role of publicity58. If they cannot guarantee a high
standard of the mirror principle (i.e. Not reflecting the actual legal status of immovables) and a new register with more accurate information can protect third parties more efficiently, the State would be compelled to redefine it. In any case, a Blockchain model would not clash with the publicity and third-party protection principles of consensual systems since land registries would still be playing a role when parties decide to agree on a transfer in a private document and conceal if from the spotlight. Finally, notaries are better positioned than land registrars in consensual systems while intervening in the agreement between the parties. They can avoid the double sale issue more effectively and reduce its moral hazard because the lapse of time between the issuance of a notary deed and the verification of the hashed transaction on the private distributed ledger would be insignificant. This would considerably enhance the ‘prior tempore’ principle and prevent problematic effects caused by a delayed registration proceeding of a notary deed in the land registry. When there is no required intervention by a State official for the effective transfer of a property right, BCT would find more opportunities to be implemented in a notary-based private distributed ledger59. 58 Nogueroles, 2017, p. 307.
59 This adaptation of a BCT in real property transfers also includes those ‘traditio’ systems where registration is not
required for the delivery, as is the case of Spain. The immediate registration of the agreement into the notary-based Blockchain would englobe the symbolic ‘traditio’ with a real time publicity more effective than land registries.
A notary-based private distributed ledger would not collide with the rules of transfer by consent while allowing a more efficient system of publicity and title protection. Figure created by the author.
On a second stage, those ´traditio´ and abstract systems where registration is required to fulfil the conveyance can be analysed together. These models enclose a different logic by refusing the transfer of an immovable as an exclusive part of the private sphere of the parties. On the opposite, the State intervention is required to overcome information problems and grant a low level of court disputes (i.e. ´Ex post´ costs). The involvement of land registries as a second requirement for the transfer also grants flexibility to rectify inaccurate and misleading information in case of mistake. Nevertheless, the introduction of a private distributed ledger in these transfer models call for the land registrars to be in charge instead of the notaries as represented in the former model for the following reasons: first, if registration in these systems operate as a ´statutory magic´ by means of conferring immediate title60, a Blockchain based on a notary-node network would make no sense because the transaction
would not be fulfilled yet. In those systems the registered title holder is always to be protected because it is conceived as an absolute title. Therefore, the exam of validity prior to the Blockchain encryption should be moved to the registration process where control over property rights is strictly separated from the disposal capacity assessment exercised by notaries. Second, a Blockchain-based land registry would reduce the transaction costs where is more needed: a transfer system like the German which is more concerned with the idea of avoiding the existence of conflicting titles requires arduous controls to detect hidden charges, double sales, prior rights, etc. By introducing a registry-node network those functions would be reduced to the simplicity of entering an input to the system and check if it replies an incompatibility and why. Lastly, the guarantee that no possible double chain
of title transactions exists at the same time that data rectification is possible makes it more compelling for the land registration institutions. BCT is defined by its immutability of data and alteration can only occur if most of the node resources are controlled by a single person. A private distributed ledger eclipses all the risks of a ´peer-to-peer´ system where decentralization means no control by any part. But at the same time enables registrars to coordinate every time rectification is required; the rectification control would grant even more security because it requires many registry nodes involved to validate it.
A registry-based private distributed ledger would respect the rules of title registration systems and reduce the transaction costs where is more needed. Figure created by the author.
Those alternative models proposed would overcome the concerns of some scholars that criticise the impossibility to introduce a BCT transfer model in title by registration systems due to the lack of
validity performance of the transaction61 and the clashes of the ´peer-to-peer´ distributed ledgers with
the State officials´ control62. The introduction of a private distributed ledger would subordinate a
Blockchain network to legal controls with notaries and land registrars exercising their gatekeeping functions as nodes. Apart from ensuring that the legal property rights on a ‘coloured coin’ are kept and no fraud is committed, this would also reduce the conveyance costs for obvious reasons of automatic performance of a legally secured system, refusing the statements of those academics who maintain the opposite63. In the next chapter two scenarios on conflicting rights are exemplified for
each acquisition model to analyse whether BCT could overcome certain practical limitations.
61 Nogueroles, 2017, p. 310. 62 Thomas, 2017, p. 381. 63 ‘Ibid’, p. 386.
Chapter V: Conflicting property rights: conciliation with priority rules (‘Leviticus’)
Apart from the conceptual issues, consensual systems on the one hand, and double-act systems requiring registration on the other encounter different practical problems derived from their respective conveyance requirements. In the previous chapters the main recommendations for the introduction of BCT within the different transfer models have been sketched adapting a ´peer-to-peer ´ network with distinct institutional gatekeepers in control (i.e. notaries or registrars in control). Despite the reduction of potential collision of titles, the proposed models would still be confronted with classical conflicts between property rights that needed to be addressed by the judiciary; to pick up two examples, the consensual model epitomized by the French system may still have two fork chains of transactions derived from a private transfer not recorded in a notary deed, whereas registration models like the German system would still face conflicts with the existence of different securities over immovables not subjected to contractual obligations. This final chapter aims to explore if there may be further considerations for Blockchain when problems are not fully engaged by legal rules. Special consideration is put on the double sale issue under the consensual systems in France and the multiple collateral conflicts under transfer-by-registration system in Germany.
Regarding the consensual systems, the introduction of BCT could decrease but not avoid the total number of conflicts between contradicting ownerships; although notaries would find convincing reasons to track all the notary deed transfers on Blockchain, this would ultimately depend on the autonomy of the parties, who may find different reasons to avoid recording the sale on a notary deed. This mere consensus to make the transfer effective creates a weakness into the system and offers an opportunity of fraud that has been partly addressed by the legislator with the third-party protection rule (i.e.: Making valid private agreements not enforceable against third parties if they remain unregistered). Regarding the French system, in 2016 a presidential Decree reforming the Law of obligations introduced a relevant amendment to the third-party protection rule64: the new article 1198
of the Code Civil sets out that, in case of a double sale of an immovable, the rule of preference would favour the party who first registers their right in the land registry after recording it into a notary deed. This is still not protecting the ‘prior tempore’ principle altogether, but it seems that the French system is settling a quasi-requirement of registration to ´consolidate´ an ownership title and make it effective against third parties. Be that as it may, the problem in practice is still not solved because in a private sale of land parties often postpone the recording on a notary deed for different reasons (e.g.: Solvency requirements, payment or effectively grant the possession of the immovable), which
64 ‘Ordonnance no 2016-131 du 10 février 2016 portant réforme du droit des contrats, du régime général et de la
