3.2 The Baarns beslag-judgment in this Context; a Simultaneous Transfer?

In the Baarns beslag-judgment,1 the Supreme Court (Hoge Raad) of the Netherlands stated that notaries have a general duty to ensure that both parties to the transfer receive what is due to them. This entails, that (a) the seller receives the full purchase price and (b) the buyer acquires the full and unencumbered ownership of the property concerned.2 The civil law notary must see to it that parties to the transfer do not bear risks in this context that are, generally, avoidable.3 Naturally, this general duty encompasses the duty to ensure that the seller is not insolvent. As set out in subsection 2.3, a bankrupt seller is unable to transfer ownership of immovable property to a buyer. Therefore, an attempt to transfer an immovable by a bankrupt seller will result in the realisation of the risk that the buyer does not acquire the full and unencumbered ownership of the immovable property. Because the realisation of this risk is in the vast majority of instances avoidable (see subsection 3.3), the civil law notary has a duty to avoid the realisation of this particular risk.

Furthermore, in the Baarns beslag-judgment, the Supreme Court held that the payment of the purchase price and the transfer of the immovable property must take place simultaneously.4 As we have seen above, the transfer of the immovable property is completed as soon as the deed of transfer has been registered in the public land records. But what about payment? One possible approach would be to define payment as the moment when the notary releases the purchase price to the seller. However, it must be stressed that the moneys in the client account belong to the clients only. If the buyer and the seller are the notary’s only clients, either the buyer or the seller must be entitled to the money in the clients account. Therefore, another viable alternative would be to say that payment takes place when the seller becomes entitled to the purchase price (even though the money is still in the notary’s bank account). In line with this opinion, the Dutch Supreme Court has decided that payment takes place at the moment when the “seller may rightfully require the release of the purchase price from the notary”.5

Of course, this raises the question of when the seller can expect payment. It would make a lot of sense to argue that the seller may want the money to be released as soon as the deed of transfer has been registered, since this is the moment when the buyer becomes the owner of the immovable property. This would also be in accordance with the Baarns beslag-judgment; a simultaneous transfer of the immovable property and the purchase price. However, as the next subsection explains, due to bankruptcy and its consequences, this view cannot be upheld.