OnDecember 20th, 2012 apaneldiscussionconcerningtheroleofanotaryin real estate transactions and the problem of the registry(the Unified state registry of rights to real estate objects and transactions therewith) credibility took place.AT Lawyers’ senior associate Ilya Aleshchev has taken part in it.
According to Art.8.1.ofthedraftCivilcodeoftheRussianFederation (furtherreferredtoas – «theCivilcode»), incases provided by law or agreement of the parties, a transactionthat gives rise toappearance, changeor termination of rights toproperty, that have to be registered by the state, shall be certified by a notary.
Inaccordancewithp.1 Art.163 ofthedraftCivilcode,notarizationofatransactionmeans review of legality of the transaction, and rights of a party on itssettlement.
OneofthemostcrucialquestionsofamendmentstotheCivilcodewas a proposal to implementmandatory notarization of real estate transactionsfor reinforcement of the data of the registry credibility.
Theadherentsofmandatory notarization of real estate transactionsprove their legal position as follows:
- Transactionswithrealestateobjectsshallbesupportedbyaprofessionalparticipanttotherealestatemarketwhowillberesponsibletothepurchaser of a real estate object for possible withdrawalof an object in case if it does not notify him on correspondent risks, the presence of which can lead tovindication of the object,and a notary can act as such professional participant;
- Participationofanotarycanbeanadditionalwarrantyof the fact that the transaction is “clean”, because a notary can review the transaction and parties thereto;
- Possibleresponsibilityofanotaryfor non-information of the purchaser onrisky circumstances of the transaction.
Theiropponentsprove their legal position (lack of necessity in notarization) as follows:
- Notariescannotcrediblystatelegalcapabilityofaperson, review authorities of foreign organizations, so, they cannot warrant protection of any party to a transaction;
- Notariesarenotpreparedtoanalyzecomplextransactions because they do not have correspondent experience;
- Notary fees;
- Absenceofrealprotectionfromunlawful actions that can be provided by notaries;
- Absenceofdemandin notarization demonstrated by participants to real estate objects turnover;
- DuplicationofRosreestrfunctionsby notaries (function of transactions legal expertise).
ProblemsconnectedwithprovisionofproperprotectiontothepartiesbynotariesandwithduplicationofRosreestrfunctionsby notaries (function of transactions legal expertise) seem especially controversial. Theadherentsofmandatorynotarizationofrealestatetransactionsprovethatparticipationofanotarytoreal estate transactionscan reduce the number of «black schemes»,a notary can act as an additional competent controlling body between the parties because of the function of powers of attorney registry maintenance. Theiropponentsconsiderpossibilitiesofnotariesinsufficientforsuchcompetentreviews;this fact is confirmed by business practice.
ConcerningtheproblemofduplicationofRosreestrfunctionsbynotaries (functionoftransactionslegalexpertise) theadherentsofmandatorynotarizationofrealestatetransactionsrefer to the fact that notaries can record the will expression of persons, and Rosresstr employees check the existence of the ownership right of a person to a correspondent real estate object. Accordingtotheoppositelegalposition, inp.32 ofMethodicalrecommendationsontheprocedureofthestateregistrationofrightstorealestateobjectsandtransactionstherewithitisdeterminedthatinthecourseofRosreestr legal expertisethe validity of documents submitted by an applicant, existence of rights of the person submitting the documents is reviewed, andabsence of other grounds for suspension or refusal in state registration of rights is stated. Thiswordingisquitesimilartothe proposed wording ofp.1 Art.163 of the draft Civil code.
Theparticipantstothepaneldiscussionproposedthatitwouldbenecessarytoprovidea “connectionchannel” betweennotariesandRosreestrfor the purposes of information exchange, for legal expertise of transactions documentsand review of the parties’ authorities.
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