The Law of Property Act - Cornerstone of the Civil Law Reform
| Author | Priidu Pärna |
| Pages | 89-101 |
Priidu Pärna
The Law of Property Act - Cornerstone of the Civil Law Reform
Introduction
The Law of Property Act provides bases for the law of property. This act is considered to be the first step in the creation of the new Estonian civil law. The need to create firm bases for the state and its economy emerged upon regaining independence in 1991 and adoption of the Constitution in 1992. Land reform, started at the same time, brought pieces of land onto the market, however, the Civil Code of the Estonian SSR did not provide regulation for commerce of a piece of land. In order to regulate the commerce of immovables, in 1991, the Ministry of Justice engaged Peeter Kask, a lecturer from the University of Tartu, in drafting the Immovable Property Act. *1 However, the draft did not meet the increasing needs of society. The main deficiency of the draft was its weak regulative power and its being a framework act; another problem was that the draft treated both the norms in private and public law in one and the same act Å something characteristic of the Soviet legal order. A team under the guidance of Anre Zeno and Rein Tiivel which consisted of practitioners-students submitted an alternative draft. *2 At the same time, it was understood that it should be aimed towards the creation of a new comprehensive civil code. A principal commission of Civil and Commercial Code guided by P. Varul, a professor from the University of Tartu, started work in 1992. The draft of the Civil Code *3 which had been prepared under the guidance of professor Uluots for more than 15 years by the year of 1939, and could not be approved by the Riigikogu (Estonian parliament) because of the occupation, was taken as the model for the Code. The submission of this draft for the legislative proceeding of the Riigikogu was considered. A similar step was taken by the Latvians who effected the main parts of the Civil Code of 1938 with wording changes in 1992. The resolution of the Riigikogu concerning the continuity of legislation *4 that recommended to follow the acts which were in force before 1940 became the essential resolution of legal policy guiding the selection of sources. Estonia preferred to elaborate new drafts since the draft of the Civil Code had neither been adopted as law nor applied in practice. Societyâs need did not afford time to elaborate a comprehensive civil code and it was determined in favour of its adoption by books. The first law was determined to be the Law of Property Act in order to create a foundation for the emerging immovable property commerce. The complementation of the drafts of Zeno-Tiivel by provisions on movables was started by Villu Kõve and Priidu Pärna. The Government of the Republic submitted the draft to the parliament in February 1993 *5 and the draft was passed on 9 June 1993 as the result of an expeditious proceeding. *6 During the proceeding period, the draft was further processed by the expert group guided by Professor Varul. The Land Register Act was passed in the autumn of 1993 *7 and upon entry of the Law of Property Act into force on 1 December 1993, land registries commenced work.
The Law of Property Act follows the draft of the Civil Code both in its structure, content and abstract wording. The draft of the Civil Code was an advancement of the Baltic Private Law Code *8 (1864), that was based upon the legal family of Middle Europe and applied until the occupation, followed primarily the Swiss Civil Code while modifying the part of property law. *9 While compiling the draft of the Law of Property Act of 1992/93, the Civil Code was advanced primarily on the basis of the German Civil Code *10 although the codes of, for instance, the Netherlands and Louisiana were also analysed. Professor G. Brambring and Dr. S. Erber-Faller *11 delivered an expert opinion on the draft through the German Foundation for International Legal Co-operation. Still a claim can be made that the centuries-old tradition of rules of property law that follow the customs and understandings created with time are in effect again in Estonia. The phenomenon of the Law of Property Act is in the fact that it set the direction for all subsequent civil law acts and their sources. The passing of the Law of Property Act was a step of extreme importance in restoring the property relationships in private law. *12 The Law of Property Act was novel notwithstanding its traditional solutions since lawyers had not been in touch with the majority of the main instrumentality of property law for 50 years. Therefore, even today, the application of the property law may end up being problematic. For certain, the text of the law reflects the lack of knowledge and the chaotic nature of the period.
Definition and classification of things is the issue of general provisions of civil law, however it is located in the Law of Property Act on practical grounds. Namely, the General Part of the Civil Code Act *13 was passed only in 1994, i.e. after the entry of the Law of Property Act into force, and it was necessary to regulate the objects of rights of the Law of Property Act â. things â. in order to establish real rights. Regulation of things in the Law of Property Act has a broader meaning that exceeds the need of the property law and establishes objects for the law of obligations, family law and succession law as well. The new draft of the General Part of the Civil Code Act also regulates things and therefore the first part of the Law of Property Act is subject to repealing. *14
The main deficiency of the applicable Law of Property Act is that it is concentrated solely on things and does not establish the place of things in the system of subjects of the civil law. We do not find a general definition of things and classification into things and rights.
A thing is a corporeal object (section 7). All things that fill space in the physical sense may be treated as things. An aggregate formation has no meaning. Things are objects that have a spatial scope, are perceivable by senses and are located under the discretion and supervision of people. Things that cannot be spatially defined such as open air, flowing water, sea, cannot be considered to be things but rather as common benefits. However, the Act violates this principle. So, section 9 regards things which due to their nature cannot be owned by anyone and may be used by everyone as common things. Declaration of ground water to be owned by the state is also questionable (section 134).
The main classification of things is their division into movables and immovables (res mobile, res immobiles). This division is the starting point for the separate treatment of real rights and is expressed in differences in the creation, scope and extinguishment of a right and distinct rules of form of transactions. Commerce of movables is determined by provisions on possession, commerce of immovables â. by provisions of land register. The Act follows the principle of numerus clausus regarding immovables â. the Act provides an exhaustive classification of movables. Immovables are plots of land together with their essential parts (section 8). Things which are not immovables are movables. A special classification of movables is accessories, which serve the principal thing and are related thereto through a common economic objective and their corresponding spatial relationship (section 18). The rights and obligations whose object is the principal thing extend to the accessory as well unless otherwise provided by parties. Provisions concerning immovables may be applied to certain movables with higher commercial value. Pursuant to the Law of Ship Flag and Registers of Ships Act *15 , vessels with a length of more than 12 metres may be one such exception. By law, provisions on things may be applied also to rights. Such exceptions are the right of superficies of frequent commerce (section 241) and the forms of divided common ownership resulting from the Apartment Ownership Act *16 : apartment ownership (section 1) and apartment building lease (section 24). Property is defined through an aggregate of things, rights and obligations belonging to a person and it is important primarily in relationships of family and succession law (section 30).
A thing and its essential parts are not an object of different rights and obligations (subsection 15 (2)). This refers primarily to commerce in property law, not establishment of rights in the law of obligations. Essential parts of a thing are component parts which are permanently attached to the thing and which cannot be severed from the thing without the thing being destroyed or changed in character. This treatment is sort of narrow since it is important that the essential parts themselves are not destroyed upon severance. The essential parts of a plot of land are things permanently attached to it such as constructions, forest, other vegetation and unharvested fruit, and the real rights relating to the plot of land which belong to the actual owner of an immovable (section 16). A building erected on the basis of a real right (a servitude, a right of superficies) as well as buildings attached to a plot of land for a temporary purpose (on the basis of a right in commercial lease) are not essential parts of a plot of land. Pursuant to section 13 the Law of Property Act Implementation Act *17 , a significant exception is the commerce of buildings that are deemed to be movables until the entry of the plot of land under a building in the land register while returning or privatising it or while constituting the right of superficies for the benefit of the owner of the building. A building shall not be entered in the land register without land.
The provisions of possession and land register create the general part for specific real rights or...
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