3.1 The Transfer of Immovable Property; the Dutch Procedure

Section 3:89 BW describes how the delivery of immovable property is effected; the delivery takes place through a notarial deed that has to be registered in the public land records. In practice, this requires the parties to the transfer (the buyer and the seller) to appear before the civil law notary in person. The notary will then explain the consequences of the transfer. Often, the notary also informs the buyer of the consequences of creating a right of mortgage on a property. Once done, the parties and the notary sign the deed of transfer. This deed of transfer is submitted to the public land records. Once the deed has been registered, the transfer is complete (see section 3:89 BW). As soon as the deed has been registered, the notary receives a confirmation of the registration (Bewijs van inschrijving). It must be noted that only the delivery requires the presence of a legal practitioner (i.e. the civil law notary). A contract of sale can be concluded without any legal practitioner being present.1 Once the deed of transfer is registered in the public land records, the transfer is complete. If necessary, this process can be completed within several days.

Also, the provided consideration, i.e. the payment of the purchase price, must go through the notary. Section 7:26 subsection 3 BW states:

Where a notarial deed is required for the transfer of ownership of the sold object, followed by the registration of that deed in the public registers which are kept for this purpose [i.e. when transferring immovable property, TJB], then the indebted purchase price must have been brought out of the control of the buyer at the latest at the moment on which this notarial deed is signed and it only needs to be brought under control of the seller after this deed has been registered.

In practice, civil law notaries adhere to this rule, by obliging the buyer to transfer the purchase price to the client account of the civil law notary at least one day prior to the transfer. The client account of the notary is a bank account held and controlled by the notary. However, money in the bank account does not belong to the civil law notary personally. Instead, the money is held in joint ownership by the clients that have transferred money to that account (see section 25 subsection 3 of the Dutch Notaries Act) (Wet op het Notarisambt). For this reason, the bankruptcy of the civil law notary does not affect the money of the clients in any way.2 By using the client account in the described manner, the civil law notary protects the interests of the seller. After the buyer has transferred the purchase price to the notary’s client account, the payment of the seller no longer depends on the willingness of the buyer. Instead, the notary releases the purchase price to the seller as soon as the transfer has taken place. In this context, the civil law notary acts as an intermediary.