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Por favor, get your bulldozer away from my villa: an analysis of the nascent European Land Registry Association's Cross-Border Electronic Conveyancing project.

I. INTRODUCTION

Imagine that the Spanish government, without providing you any warning or opportunity to contest, bulldozed the villa you spent your retirement savings on because a retroactive law deemed it illegal. (1) While this notion may seem ludicrous, thousands of people in Spain, particularly expatriates in luxury housing markets, face this very dilemma. (2) A pilot program of the European Land Registry Association (ELRA) aims to mitigate such disastrous effects resulting from European cross-border land transactions. (3) The Cross-Border Electronic Conveyancing (CROBECO) scheme allows buyers to draft bilingual contracts for the purchase of real property in foreign countries while simultaneously taking advantage of choice-of law provisions to incorporate clauses allowing buyers to seek redress in the courts of their native country. (4) Time will tell whether CROBECO, currently being tested in the Netherlands and Spain, with the potential to be expanded to other countries in the near future, provides an efficient framework for cross-border land transactions in the European Union. (5)

This Note will present the history leading to the introduction of the CROBECO scheme and analyze the strengths and weaknesses presented by its pilot testing. (6) Part II of this Note presents an overview of the Spanish housing market, in particular its meteoric rise and subsequent decline, and the so-called land-grab crisis. (7) Part III will summarize the history of land registries and cross-border property transactions in the European Union and will give an overview of the aims and mechanisms of the CROBECO project. (8) Part IV analyzes the progress made thus far by the CROBECO initiative. (9) Finally, Part V reaches a conclusion regarding the efficacy of CROBECO at facilitating European cross-border land transactions and increasing buyer Confidence. (10)

II. FACTS

A. The Spanish Housing Market

1. Rapid Growth

Like the housing markets in many other nations, the Spanish housing market enjoyed a period of near-unbridled growth from the mid-1980s until 2007. (11) New home prices, particularly in urban areas, were valued thirty times higher in the mid-2000s than they were in the last quarter of the twentieth century. (12) Low interest rates coupled with expatriates quick to use their retirement savings to build dream homes along the picturesque Spanish coast fueled much of the homebuilding activity in the early 2000s. (13) While construction firms profited enormously from the housing build-out, industry forecasters predicted that such phenomenal growth could not go unchecked. (14)

2. The Bubble Bursts

In 2007, the Spanish sub-prime mortgage crisis dealt the once-thriving property market in Spain a crippling blow, one the market is still struggling to recover from nearly six years later. (15) Sources estimate that housing prices have fallen anywhere from seventeen percent to as much as fifty percent from their 2007 peaks. (16) Now, nearly one million new and partially built homes, once so eagerly purchased by expatriates and wealthy Spaniards, stand unoccupied. (17)

The fact that Spain's homes are among the most overvalued in the world has impeded Spain's potential economic recovery. (18) Even Spain's perennially robust luxury markets, such as the Balearic Islands, have seen property values drastically decline in the wake of the sub-prime mortgage crisis. (19) Finally, perhaps one of the worst hindrances tarnishing the image of the Spanish housing market is the so-called illegal homes or "land-grab" scandal. (20)

B. Expatriates and the Land-Grab Crisis

1. Regional Government Corruption

The Spanish government originally enacted the so-called "land-grab" laws as benign legislation to generate low cost housing. (21) The current land-grab problem, centered in the region of Andalusia, stems from the widespread granting of construction licenses by local governments that did not first obtain the appropriate licensure permission from regional authorities. (22) Fearing overdevelopment, the higher regional governments initiated legal action to invalidate licenses granted at the local level. (23) Additionally, local governments now wield the power to bulldoze partially constructed or completed homes that run afoul of proper licensing procedures. (24) Currently, the Andalusian government estimates that over one hundred thousand illegally built homes exist in Andalusia alone, exposing homeowners to great risky Nearly thirteen thousand of these illegal homes are in Andalusia's picturesque Almanzora Valley, an area popular with British expatriates. (26)

2. The Bulldozing of Good Faith

As a result of the retroactive invalidations, thousands of homeowners, many of them expatriate retirees who purchased their properties in good faith, now live in jeopardy. (27) Some owners have already seen the fruits of their retirement savings quite literally bulldozed away. (28) Len and Helen Prior, looking forward to retirement, left their native Britain to build the Spanish retirement villa of their dreams. (29)

Thanks to unscrupulous builders who did not obtain proper permits before building their villa, the Priors watched helplessly as the home they poured their lives' savings into was demolished thanks to a retroactive land-grab law. (30) While Spain's highest court ultimately ruled that the demolition of the Priors' home was invalid and that the couple should receive compensation, the relief the couple sought has been slow to come to fruition. (31)

Other homeowners must live without essential infrastructure services, such as water and electricity, which they believed were guaranteed by their purchase agreements. (32) Andalusian authorities are working to have over eleven thousand homes in the Almanzora Valley re-declared legal. (33) Unfortunately, the remaining illegal homes, approximately one thousand in total, would still be subject to demolition, resulting in the economic and psychological devastation of the expatriates who inhabit this region. (34)

3. The Spanish Solution, or Lack Thereof

The uncertainty caused by the land-grab laws caught the attention of the European Parliament in 2009. (35) Faced with the threat of reduced or suspended funding to certain autonomous regions, such as Andalusia, the Spanish government sprang to action. (36) The Spanish government introduced, for a twenty-nine euro fee, an online service whereby potential land buyers could receive a certificate from the Spanish Land Registry to serve witness to the fact that the buyer purchased a property in good faith. (37)

The program, dubbed the Interactive Land Registry Information Service, is run by the Public Law Corporation of Land and Mercantile Registrars of Spain and has been fraught with problems. (38) For instance, a search for one Andalusian property turned up an accurate physical description but failed to mention that the government demolished it in 2008. (39) The program aims to allay the fears and increase foreign buyer confidence in Spanish property transactions. (40)

III. HISTORY

A. Pre-CROBECO Land Conveyancing in the European Union

1. Existing Land Registry Schemes and Principles

The European Union is currently comprised of twenty-seven countries, each possessing independent land registries and land conveyancing legal processes. (41) European land registry systems fall into one of two main categories, title registration systems and deed registration systems. (42) Deed registration systems are premised on the concept that titles to real property exist in law and are comprised of all prior transactions relating to a piece of land. (43) Title registration systems, on the other hand, are premised on the notion that title exists in the land register itself, rather than in law. (44) The deed system is prevalent in countries with Roman roots, such as Spain and France, whereas the United Kingdom and Germanic countries tend to have title registration systems. (45) Regardless of the type of land registry system employed, each member country of the European Union maintains a completely independent land registry system. (46)

The lex rei sitae principle is a classic property maxim. (47) In effect, the principle stands for the premise that the law that governs the land where real property is situated must necessarily be the law that governs the transfer or acquisition of that real property. (48) The CROBECO scheme aims to respect the classic transfer of property rights principles while offering buyers the option to apply the laws of other countries when contracting for rights not directly affecting the property transaction itself, which must be governed by the law of the jurisdiction where the property is located. (49)

2. Role of Registries

Simply put, land registries, whether they follow a deed or title registration scheme, provide interested parties with an orderly record of private land ownership. (50) Land registries and their respective processes for cataloging public information are legislative creations and thus vary widely from jurisdiction to jurisdiction. (51) Given the vast differences in public access to land registries, information regarding land parcels, and the registration systems themselves, it is no surprise that various groups, such as the European Union Land Information System (EULIS), formed in the European Union in an attempt to mitigate such differences and improve the ease and reliability of cross-border land transactions throughout the European Union. (52)

3. Creation of ELRA

In 2004, twelve European land registry groups banded together to form the European Land Registry Association (ELRA). (53) According to its mission statement, ELRA is dedicated to "develop[ing] and understanding the role of land registration in real property and capital markets." (54) Like EULIS, ELRA also seeks to increase the European community's knowledge of the processes of land registration systems in each European Union member state. (55) Despite its desire for increased cooperation and transparency among member European land registries, however, ELRA recognizes that EU community law does not supersede the traditional property law of EU member states. (56) It is in this spirit that ELRA developed the CROBECO project. (57)

B. The Introduction of CROBECO; Function and Objectives

1. Application of CROBECO

a. A Brief Overview of the Aims of CROBECO

CROBECO is a research initiative of ten ELRA member states whose aim is to streamline cross-border European property transactions. (58) The CROBECO scheme operates on the idea that while the lex rei sitae principle and differences among land registry systems must be observed, buyers ought to be able to use choice of law principles to their advantage when contracting for the purchase of real property. (59) By using the applicable choice of law provisions in a permissive and voluntary manner, CROBECO helps provide buyers with greater protection and increased confidence in cross-border land transactions. (60)

Simply creating a cross-border framework without a thorough understanding of cross-border transactions is not a feasible option because of the varying nature of land registration systems in various EU countries. (61) To that end, CROBECO pilot testing began between Spain and the Netherlands in 2010, with the possibility of later expanding to other countries. (62) ELRA's ultimate goal, after compiling observations from CROBECO test transactions, is to create a standardized cross-border conveyancing reference framework (CCRF) that will greatly reduce the stress and complications of cross-border land transactions in the European Union. (63)

b. Choice of Law and Language

One of the central features of CROBECO is the flexibility it affords buyers to apply choice of law provisions when contracting for the acquisition of real property. (64) European Community Regulation Number 593/2008 permits foreign buyers to apply the law of their home country to certain provisions in contracts. (65) Thus, while parties cannot contract for the law that governs the transfer of real property, they can choose the law regarding attendant provisions, such as provisions for redress should the transaction go awry. (66) Likewise, CROBECO also encourages buyers and sellers to draft bilingual contracts to ensure that the interests of both parties are duly represented and to minimize chances for misunderstanding. (67)

c. Provisions for Redress and Increased Buyer Confidence

One of the critical aspects of transactions following the proposed CROBECO scheme is that purchasers can choose the law applicable to their contract in such a manner that should anything go wrong with the transaction other than with the actual purchase and sale of a property, which must be governed by local law, the purchaser can seek redress and compensation in the courts of his home country. (68) ELRA hopes that this option not only appears attractive to foreign buyers, but will actually increase foreign buyers' confidence in cross-border transactions. (69) While ELRA did not explicitly design CROBECO with the Spanish land-grab crisis in mind, it is not hard to imagine the myriad of positive ramifications the program could have in the beleaguered Spanish housing market. (70)

d. Respect for the Lex Rei Sitae Principle

Regardless of the law chosen to provide redress in the event of a mishap, there remains one instance in which contracting parties cannot alter the governing law. (71) The lex rei sitae principle mandates that the law governing the transfer or acquisition of real property must be the law of the country where the property is situated. (72) Recognizing the importance of the locus of the property, CROBECO's proposed process enables parties to adhere to the lex rei sitae principle while tailoring other provisions to better suit their needs. (73)

2. Role of Registries and Individual States Under CROBECO

Choosing one land registry system or practice over another would be difficult, if not impossible. (74) CROBECO does not purport to alter any of the practices or responsibilities of existing land registries. (75) The ultimate power to register and legitimize deeds remains untouched under CROBECO; a registrar in a receiving country may elect to refuse to honor a contract governed in part by foreign law. (76) To prevent this scenario, registrars would be called upon to take several additional steps to ensure the acceptance of documents drafted in the buyer's home country. (77) Changes in the day-to-day operations of individual land registries, however, would be minimal if CROBECO ultimately furnishes a CCRF for use in EU cross-border transactions. (78)

3. CROBECO Pilot Phase and Early Findings

As previously mentioned, CROBECO's pilot testing, between the Netherlands and Spain, began in 2010. (79) The pilot program allows Dutch buyers to include Dutch redress provisions in bilingual contracts for real estate transactions. (80) Some of the concerns arising from the test phase thus far, as presented at the CROBECO Annual Conference in December 2011, in Tallinn, Estonia, are logistical in nature. (81) Specifically, the conference pointed out the need for so-called "helpdesks," which would be organized by each participating member-state, to aid in the organization, completion, and transfer of necessary documents. (82) Notably, England, a country whose expatriates have been heavily impacted by the Spanish land-grab crisis, expressed its desire to begin a CROBECO pilot program. (83)

IV. ANALYSIS

A. Why An Alternative System is Desirable

The European Union is comprised of twenty-seven member countries, each of which possesses a unique land registry system, with its own customs, processes, and laws. (84) As such, it is not surprising that errors and mishaps frequently occur with crossborder transactions, even when all parties involved are well-intentioned. (85) When one or more parties are not well-intentioned, the added complexities resulting from contracting in another language and under foreign laws can be disastrous. (86) Systems currently in place are not equipped to handle the exigencies that may arise in cross-border land transactions. (87)

1. Current Systems and Initiatives Do Not Effectively Deal With Cross-Border Transactions

According to the governing lex rei sitae principle, the law where a piece of property is situated must naturally govern the sale of the transaction. (88) As a result, vastly different sets of laws and norms apply to real property transactions in the European Union. (89) Confusion and potential for error are greatly heightened when buyers purchase real property in foreign lands because of language and cultural differences. (90)

a. Standard Contracts for Real Estate Purchases

Regardless of whether a country uses a title registration or deed registration scheme of land registry, the laws governing the sale must necessarily be those of the country where the property is located. (91) However, prior to the initiation of CROBECO, drafters of contracts for the purchase of real property did not think to manipulate choice of law provisions to sever the acquisition of the property and the provisions for redress, applying different laws to each. (92) Despite the fact that EC Regulation Number 593/2008 allows parties to apply different laws to different provisions of contracts, buyers of property in foreign countries are often left to seek redress according to the laws of the land where the property is situated, most likely because they were either unaware of the Rome I Treaty, or did not think it applied to their situation. (93)

b. The Spanish Government's Solution

The Spanish government attempted to soothe the fears of foreign buyers by creating an online land registry system where buyers could carry out due diligence and research a piece of property, paying twenty-nine euros for a certificate to prove they had done so. (94) Although aimed at allaying fears and increasing foreign buyer confidence in Spanish property transactions, the Spanish government guarantee does not seem to be functioning as intended. (95) The site is plagued with poor translations and grossly out-of-date and inaccurate property information. (96) It seems doubtful that this unreliable and inaccurate system can offer buyers, Spanish or foreign, any meaningful protection from unscrupulous builders or adverse government regulation. (97)

2. The Current System is Incapable of Protecting Purchasers

Actions taken by the Andalusian government, designed to rectify the problems created by dishonest builders, have instead caused the cost of the builders' actions to be borne by innocent homebuyers. (98) Cases like that of retiree couple Len and Helen Prior make the desirability of an alternative to the existing conveyancing processes painfully clear. (99) Considering that thousands of other Spanish homeowners find themselves in similar positions, it is apparent that current land conveyancing schemes must change. (100)

B. Necessary Outcomes from Alternative Land Conveyancing Schemes in the European Union

1. Increased Buyer Confidence

A critical effect of any new land conveyancing scheme must be increased buyer confidence and security in cross-border transactions. (101) As the stories of dozens of disillusioned homeowners have illustrated, even buyers in the best of faith can find themselves homeless and penniless when they are left without an opportunity to protest, or are unsure how to seek recourse in another country. (102) The existing principles of contract and property law as they are typically used in EU property transactions are unable to assuage buyers' fears because they do not adequately contemplate redress should a purchase go afoul. (103) Attempts by individual governments to protect and reassure buyers have also proved inefficient. (104)

2. More Efficient and Fluid Land Conveyancing in the European Union

Additionally, any new scheme or framework for cross-border land transactions in the European Union must promote more efficient and fluid land conveyancing. (105) Given the prevalence of electronic technology today, a system that efficiently leverages the Internet could go a long way to promoting more transparent and valid land transfers. (106) At the very least, an EU-wide directory of land registries and links to relevant sites would be an invaluable aid to buyers, as they are currently left to research the registry systems of foreign countries with no guidance. (107)

3. Respect for Existing Processes and Principles

Finally, any new scheme of cross-border transactions must respect the existing principles of real property law, as well as the cultural norms that vary greatly from country to country in Europe. (108) Professionals such as registrars and notaries play different roles in property transactions in different countries. (109) Likewise, property laws developed differently in different countries because of the historical circumstances that shaped the growth of a particular country and its attendant body of laws. (110)

C. Is CROBECO the Answer?

CROBECO has only been in the testing phase since November of 2010. (111) Because an ample number of "CROBECO deeds" have been registered in the interim, however, its effects may begin to be analyzed. (112) CROBECO seeks to provide both a promising framework by which to sell foreign property in the European Union and to provide helpful information about how buyers and professionals perceive real property transactions. (113)

1. How CROBECO Addresses the Core Concerns Listed Above

a. Buyer Confidence

CROBECO was designed with the express goal of increasing buyer confidence in immovable property transactions. (114) The Spanish land-grab crisis attracted the attention of not only land registry organizations including ELRA and EULIS, but also of the European Parliament, which authored a report on the topic in 2009. (115) As such, buyer confidence was and remains a central concern of the CROBECO drafters. (116)

CROBECO stands to increase buyer confidence in several critical ways. (117) Most importantly, buyers may include provisions for redress in a contract for the sale of land, and subject the enforcement of those provisions to the laws of the buyer's home country. (118) Likewise, CROBECO encourages the use of bilingual deeds for the transfer of real estate. (119) These two minor changes to the traditional cross-border property transaction framework greatly increase buyer confidence because buyers feel more secure knowing a deed is written in their native tongue, and because buyers are much more comfortable seeking redress in the more familiar courts of their homeland should a problem arise. (120) Reports from CROBECO's second conference indicate that the framework has been successful in accomplishing its objectives. (121)

b. Use of Electronic Systems

CROBECO also heavily advocates the use of electronic technology to increase the efficiency and fluidity of cross-border transactions. (122) First, CROBECO's system for transferring property takes place entirely online. (123) This transfer system makes cross-border land transactions far more efficient because communication between foreign countries is greatly expedited when such communication occurs online. (124)

Second, CROBECO advocates the use of the Internet to increase the understanding and efficiency of communications between registrars and other professionals in different countries. (125) With the addition of "helpdesks," as proposed at the 2011 CROBECO Conference, registrars would be able to work together to fulfill the requirements of registering documents in other countries. (126) CROBECO innovatively uses the Internet to respond to the concerns and needs of participating EU member states. (127)

c. Respect for Existing Systems

CROBECO also affords a great amount of deference to the existing principles of land transfer. (128) Specifically, CORBECO respects the classical property maxims such as lex rei sitae, as well as the cultural differences that spawned different land registry systems. (129) CROBECO also does not advocate for the change or expansion of the roles played by notaries, registrars, and other professionals in any country. (130) Thanks to its deference to existing norms, advocacy for buyers, and creative use of technology, CROBECO is a promising manner by which to reenvision cross-border land transactions in the European Union. (131)

2. Early Issues

The majority of issues that arose during CROBECO's pilot between Spain and the Netherlands are technical in nature. (132) Difficulties, such as how to file documents with the receiving land registry, as well as how to fill out additional paperwork required by the receiving country, are two issues of note. (133) CROBECO's proposal to combat these issues involves the creation of virtual helpdesks, to be incorporated into the central CROBECO online portal, making them easy to access. (134) Participating countries would be able to design their own helpdesks to suit the unique issues of property transactions in that country; access would be limited to professionals involved in the CROBECO project. (135)

The test phase has also indicated that clauses in the language of the receiving country, or alternatively in English, are needed. (136) To this end, CROBECO has offered to translate any phrases the home country wishes to make available in English. (137) CROBECO would then put this information on the professionals-only area of its site, further illustrating how CROBECO efficiently uses technology to facilitate cross-border transactions. (138)

3. Potential Weaknesses

CROBECO's voluntary nature may make it a less than-ideal manner by which to rework how cross-border property transactions are dealt with in the European Union. (139) Its success is dependent on the participation of member states; its aim is to supplement but not supplant the existing norms of property transactions. (140) As such, CROBECO depends on the relevant officials in a country to accept a bilingual deed that is partially based on another country's law for its enforcement. (141) Likewise, CROBECO operates under the assumption that both parties to a contract are amenable to the choice of law manipulations that the framework touts. (142) While this issue would likely not pose a problem on the national level, as a country's land registry would be participating voluntarily in a CROBECO program, it could cause more issues for foreign sellers who would not wish to sell property subject to redress provisions governed by the laws of another country. (143)

4. Room for Growth and Success

CROBECO's pilot phase already shows promise. (144) A year after its initiation, at least one more country, England, whose citizens have disproportionately felt the impact of poorly executed cross-border land transactions, indicated its willingness to join CROBECO. (145) The program's real success cannot be gauged, however, until more countries participate in the pilot scheme. (146)

The third and final CROBECO conference occurred in Brussels on May 31, 2012. (147) ELRA indicated that the CROBECO approach will be expanded to mortgage contracts as well as to property in Portugal, with the possibility of allowing British and Welsh buyers to participate in the future. (148) Regardless of ELRA's final recommendation on the feasibility of implementing a program like CROBECO on a larger scale, the CROBECO project will undoubtedly provide invaluable information to both homeowners and professionals looking to improve the ease and reliability of cross-border land transactions. (149)

V. CONCLUSION

Though differences between EU member states' legal systems and other concerns may preclude the European Union from creating a single generic draft framework for cross-border land transactions, a more streamlined system, such as that proffered by CROBECO, is necessary to protect buyers. While CROBECO is still in its infancy, it is a promising system that could alleviate some of the difficulties faced by foreign buyers in the European Union. Should CROBECO ultimately prove unsuccessful, it will no doubt provide useful information that can be used to develop more convenient and efficient electronic cross-border conveyancing schemes that satisfy the myriad of land transfer norms in various EU member states.

(1.) See Bill Bond, Bulldozing Expats Will Hurt Spain, Foreign Minister Cautions, THE TELEGRAPH (London, U.K.) (Mar. 8, 2010) (stating Spanish government retroactively nullified building licenses); Simon Edge, Last Stand of the Expats, EXPRESS (London, U.K.) (May 11, 2010) (summarizing episode of bulldozing).); see also Nick Meo and Fergal MacErlean, Expats Fear the Arrival of Spain's Fast-Track Demolition, THE TELEGRAPH (London, U.K.) (May 9, 2010) (outlining fears of expatriate homeowners). The regional government tore down Len and Helen Prior's 350,000 [pounds sterling] villa with no warning; Len subsequently suffered a heart attack. Bond, supra.

(2.) See Meo et al., supra note 1 (outlining fears of expatriate homeowners); see also Bond, supra note 1 (interviewing distressed homeowners). John and Muriel Burns, a British couple who purchased their dream home in good faith, now face the prospect of losing it. Bond, supra note 1. They have threatened to chain themselves to their home when the bulldozers arrive. Id.

(3.) See Scan O'Hare, EU Pilot Scheme Guarantees Legal Certainty When Buying Property Cross-Border, THE TELEGRAPH (London, U.K.) (June 15, 2011) (explaining necessity for and warm reception of cross-border conveyancing scheme); see also Ibrahim Mwathane, Let's Ease Cross-Border Transactions, BUSINESS DAILY (Nairobi, Africa) (June 6, 2011), available at http://www.businessdailyafrica.com:80/Opinion+++Analysis/-/539548/1175434/- /a16a32/-/ (noting incredulity at convenience of land transactions under scheme and possible application in Africa).

(4.) See European Land Registry Association, CROBECO (May 2011), available at http://www.elra.eu/?page_id=636 ]hereinafter CROBECO] (stating objectives of CROBECO project). In time, the European Land Registry Association (ELRA) hopes to provide a framework for cross-border transactions in the European Union that will increase the confidence of foreign land buyers by allowing them to seek aid in the courts of their own country should the transaction go awry. Id. The first property transaction under the CROBECO framework occurred on November 25, 2010. See Press Release, ELRA, CROBECO (Nov. 25, 2010), available at http://www.elra. eu/?m=201011 [hereinafter CROBECO Press Release] (outlining transaction). A Dutch buyer purchased a Spanish property while in the Netherlands with a contract using largely Dutch law. Id.

(5.) See CROBECO, supra note 4 (stating initial test phase involves Spanish property and Dutch buyers). A second CROBECO conference was held on December 1, 2011 in Estonia and the third and final conference was held in Brussels on May 31, 2012; ELRA welcomes any feedback from the project thus far. Id. ELRA hoped to have a cross-border conveyancing reference framework prepared for approval at its general assembly meeting in May 2012, but it appears more time is needed until such a framework will be created. Id. The Board of the Land Registry of England and Wales announced at the 2011 conference that it decided to attempt to initiate a CROBECO pilot between England and Spain, with a possible later expansion to Portugal. See Press Release, ELRA, CROBECO Press Release (Dec. 1-2, 2011), available at http ://www.elra.eu/wp-content/uploads/file/Press % 20 Release % 20CR O B E CO. doc [hereinafter 2011 CROBECO Press Release] (indicating desire by English land registry board to begin CROBECO pilot).

(6.) See infra Parts II-V (illustrating and analyzing property transfers in European Union under CROBECO).

(7.) See infra Part II (describing Spanish housing market and current state of affairs).

(8.) See infra Part III (tracing need for and development of potential cross-border conveyancing system).

(9.) See infra Part IV (analyzing need for alternative scheme and efficacy of CROBECO pilot thus far).

(10.) See infra Part V (concluding some sort of cross-border conveyancing framework necessary for smooth cross-border real property transactions).

(11.) See Juan Ramon Rallo, Los precios de la vivienda y la burbuja inmobilaria en Espafia: 1985-2007 [The Costs of Living and the Housing Bubble in Spain: 1985-2007], 1, 2 (Mar. 4, 2008), available at http://juandemariana.org/pdf/080304burbuja.pdf (illustrating growth in Spanish housing prices from 1985-2007).

(12.) See Draft Version, Jose M. Bailen, Housing Market Dynamics in Spain, 1, 2, available at http://www.um.es/c/document_library/get_file?uuid=bbb83de0-efdd-4d9fb74e-d6c83281e2db&groupld=807682 (last visited Nov. 12, 2011) (stating extreme growth in home values). Spanish home values grew at a rate of about three and a half percent per year from the mid-1970s until 2005. Id.

(13.) See Bailen, supra note 12, at 5 (stating housing price increases from 1998-2005 associated with sharply decreased interest rates); Graham Norwood, Spain's Property Crash Casts a Long Shadow Over a Place in the Sun, THE GUARDIAN (London, U.K.), Apr. 2, 2011, at 6 (stating many expensive coastal properties purchased by northern Europeans); see also World News: Spain's Housing Bubble Bursts, NPR (Apr. 24, 2008) http://www.npr.org/templates/story/story.php?storyld=89905046 (interviewing developer who fondly recalled housing boom). Coastal areas, popular with tourists and expatriates looking to relocate, became blighted with extensive concrete construction. World News: Spain's Housing Bubble Bursts, supra.

(14.) See Charlemagne, Is Spain Heading for a Crash?, THE ECONOMIST, May 4, 2007, available at http://economist.com/blogs/certainideasofeurope/2007/05/is_spain_heading_for_a_crash (pondering viability of rapidly expanding housing market); see also World News: Spain's Housing Bubble Bursts, supra note 13 (indicating windfall developers received pre-2007).

(15.) See William Boston, Special to the Wall Street Journal, For Spain, Real Estate Outlook Appears Bleak, WALL ST. J., Jan. 5, 2011, available at http://online.wsj.com/ article/SB10001424052748703808704576061772298554068.html (noting investors, analysts, and Spanish Prime Minister agree economic decline not yet over).

(16.) See Norwood, supra note 13, at 6 (providing statistics on falling home prices). An official figure from the Bank of Spain says home prices have fallen seventeen percent since 2007, but real estate agents report actual selling price drops of twenty to fifty percent. Id.; see also David Roman, Spanish House Prices Tumble, WALL ST. J., Mar. 15, 2012, available at http://online.wsj.com/article/SB100014240527023046928045 77282790599220690.html (stating Spanish home prices decreased in value by 11.2% in fourth quarter of 2011). This decline is the sharpest decrease since Spanish statistics agency INE began tracking countrywide home prices in 2007. Id.; see also Tinsa Spanish House Price Index-11.Spc in March, SPANISH PROPERTY INSIGHT BLOG (Apr. 12, 2012), http://www.spanishpropertyinsight.com/buff/2012/04/12/tinsa-house-price_ index-11-Spc-in-march/(providing figures on fluctuation rates of Spanish home prices between 2002 and 2012). In March of 2012, Spanish home prices fell eleven point five percent from their March 2011 values, representing the largest one-month decrease in home prices since the Spanish housing crisis began in December of 2007. Id. The Tinsa index also reports that from December 2007 to the present, the average Spanish home decreased in value by twenty-eight point six percent. Id. In the same time period, homes along the Spanish coast have decreased in value by approximately thirty-five percent. Id. See Boston, supra note 15 (noting office rental rates in Madrid fell thirty percent since 2008 peak). The decline in real estate values is also visible in Spain's rental market. Id.

(17.) See Boston, supra note 15 (noting one million homes left un-purchased after sub-prime mortgage crisis); see also Norwood, supra note 13, at 6 (noting new home construction still occurring). Despite the anemic market, developers built almost 260,000 new homes in Spain in 2010. Id.

(18.) See Hong Kong Phew-Whee, THE ECONOMIST, Mar. 5, 2011, at 39 (ranking most overvalued housing markets in world). The Economist estimates that Spanish homes are overvalued by 43.7 percent. Id.; see also Rallo, supra note 11, at 3 (indicating Spanish homes overvalued approximately forty percent in 2007).

(19.) See Norwood, supra note 13, at 6 (noting Balearic Islands home prices down forty percent).

(20.) See id. (explaining briefly scandal whereby homes retroactively declared illegal).

(21.) See Geoff Meade, Spain Under Fire Over 'Landgrab' Laws, PA NEWS 16:41:08, Apr. 2, 2008 (stating original purpose of Valencian land-grab law to increase amount of low cost housing). However, the law has been contorted to force expatriates to pay for the construction costs of essential infrastructure allegedly included in property purchase prices, such as electricity and water. Id.

(22.) See Edge, supra note 1 (outlining corrupt local government practices); see also Turespana, Administrative Organs in Spain: Policy and Administration in Spain (2011), http://www.spain.info/en/sobre_espanha/politica-administracion/organos_administrativos.html (outlining Spanish system of government). Spain consists of seventeen autonomous communities and possesses one of Europe's most decentralized governments. Turespana, supra.

(23.) See Bond, supra note 1 (stating licenses nullified after regional governments sought court solutions).

(24.) See Edge, supra note 1 (explaining governments now have authority to bulldoze with one month's notice); see also Meade, supra note 21 (noting minimal changes). The laws were somewhat amended in 2005, but demolition of homes deemed illegal is still permitted. Meade, supra note 21.

(25.) See Se estima que hay 100.000 casas ilegales en Andalucia, DIARIO CORDOBA (Apr. 6, 2011), available at http://www.diariocordoba.com/noticias/temadia/se-estima-located que-hay-100-000-casas-ilegales-en-andalucia_629411.html (offering Spanish housing secretary's estimate of number of illegal homes).

(26.) See Abusos Urbanisticos Almanzora NO (AUAN), AUAN (2011), available at http://www.almanzora-au.org (stating Andalusian government reports 12,697 illegal homes in Almanzora Valley).

(27.) See Bond, supra note 1 (noting home faces demolition because original building permit should not have been granted); see also Comm. on Petitions, Report on the Impact of Extensive Urbanization in Spain on Individual Rights of European Citizens, on the Environment, and on the Application of EU Law, Based Upon Petitions Received, [paragraph] Ah, A6-0082-2009 (Feb. 2, 2009) [hereinafter Urbanization Report], available at http://www.europarl.europa.eu/sides/getDoc.do?language=EN&reference =A6-0082/2009 (stating good faith buyers unfairly facing demolition); Meo et al., supra note 1 (estimating 5,000 Britons in Almanzora Valley affected after buying in good faith); Sean O'Hare, Spain's Housing Secretary 'In Denial' About Expat Property Problems, TELEGRAPH (U.K.), Oct. 18, 2011 (noting British make up large proportion of Spanish property buyers); Meade, supra note 21 (adding German and Dutch expatriates also impacted). But see Urbanization Report, supra, at 14 (stating at least half of complaints concerning land-grab laws from Spaniards). While language barriers are always of concern when contracting in a foreign language, the high number of Spaniards registering complaints concerning the land-grab laws demonstrates that more than a linguistic misunderstanding is at issue. Urbanization Report, supra, at 14.

(28.) See Edge, supra note 1 (summarizing story of Len and Helen Prior).

(29.) See id. (describing Priors as retiree expatriates).

(30.) See id. (stating Len Prior suffered heart attack following demolition of his house). The Priors were unaware of any judicial proceedings against them until the order to demolish their house was issued, giving them no opportunity to oppose it. Id.

(31.) See Edge, supra note 1 (providing three year timeline from demolition to judgment). The Priors have yet to receive compensation, though they have been provided with temporary accommodations. Id.

(32.) See Edge, supra note 1 (noting at least 150 "illegal" homes without water and electricity); see also Meade, supra note 21 (cautioning expatriates now expected to pay for construction of infrastructure).

(33.) See Meo et al., supra note 1 (noting government plans to retroactively legalize majority of affected homes).

(34.) See id. (explaining negative consequences of home demolition). One couple has threatened to chain themselves to their villa in the event that bulldozers arrive. Id. The regional government minister added that the demolition would only still apply to "very illegal cases," leaving nine-hundred twenty homes at risk. Id. Any homeowner subject to express demolition would have a chance to plead his or her case before the demolition occurred. Id.

(35.) See generally Urbanization Report, supra note 27 (reporting findings on Spanish urbanization after petitions brought before European Union).

(36.) See Urbanization Report, supra note 27, [paragraph] 27 (threatening to cut off funding to regions and correct actions not compliant with EU legislation); see also O'Hare, supra note 27 (noting reforms alleged to offer higher security in property transactions).

(37.) See Registradores de Espana, available at https://buyingahouse.registradores. org (last visited Apr. 16, 2012)(explaining buyers can purchase Land Registry Extracts that are translated into English). The site disclaims that if discrepancies between the original Spanish text and the English translation arise, the Spanish version of the Extract, or property summary, controls. Id. The Land Registry Office in the jurisdiction where the property is located issues the Extracts for interested buyers. Id.; see also Scan O'Hare, Criticism for Property Service Run by Spanish Government, TELEGRAPH (U.K.), Oct. 14, 2011 (explaining buyers utilizing service theoretically granted judicial support). The fee also allows buyers to search for properties online and conduct due diligence. O'Hare, supra.

(38.) See O'Hare, supra note 37(stating English translations on site of very poor quality); see also O'Hare, supra note 27 (stating reforms do not resolve present uneasiness surrounding land transfers).

(39.) See O'Hare, supra note 37 (reporting full legal histories not disclosed). A search ran on another property did not indicate that fifty percent of the land was subject to grabbing by a developer who intended to use it to build, among other things, a parking lot. Id.

(40.) See O'Hare, supra note 27 (reiterating alleged reforms alleviate neither past nor present problems).

(41.) See European Union, How the EU Works: A Growing Union, http://europa. eu/about-eu/countries/growing-eu/index en.htm (last visited Nov. 14, 2011) (providing current number of EU member states); see also Position Paper, ELRA, CROBECO, available at http://www.elra.eu/?page_id=530 (Sep. 2010) [hereinafter CROBECO Position Paper] (acknowledging different land conveyance protocols in European Union); Hendrik D. Ploeger & Bastiaan van Loenen, Harmonization of Land Registry in Europe, Apr. 2005, 1, 2-6, available at http://www.fig.net/pub/cairo/ papers/ts_18/ts18_02_ploeger_vanloenen.pdf (outlining difficulties arising across different land registry systems).

(42.) See Ploeger et al., supra note 41, at 7 (illustrating major differences in EU land registration systems using Austrian and Dutch systems); CROBECO, supra note 4 (stating EU member states have deed or title registration systems).

(43.) See Jude Wallace, Session 5b. Registration tools, MODERN CADASTRE AND LAND ADMINISTRATION (2007), available at http://cadastreiran.ir/Data/Sites/1/pdf/cadastre-instruction/05b- Registration%20Tools.pdf (providing brief overview of deed system of land registration). The deed system requires that each prior transaction regarding the title must be proper in order for a present transfer to be valid, thus buyers in deed registration system jurisdictions must engage in extensive title research. Id.; see also BLACK'S LAW DICTIONARY 92 (2d pocket ed. 2001) (defining term chain of title). Chain of title refers to the ownership history of a piece of land, from its first owner to the present owner. BLACK'S. For the holder to have good title, every prior negotiation must have been proper. See Wallace, supra.

(44.) See Wallace, supra note 43 (outlining principles of title system). Unlike the deed system, which places a great deal of importance on the propriety of each transaction in the conveyance of a land parcel, the title system, or land registration system, as it is commonly called, registers transactions on the title itself. Id. Those buying real property in countries using the title system need only verify that the person purporting to sell the title is indeed the owner. Id.

(45.) See Wallace, supra note 43 (listing countries where different land registry systems used).

(46.) See CROBECO, supra note 4 (noting EU member states have distinctly different registry systems in place).

(47.) See BLACK'S LAW DICTIONARY 2673 (5th ed. 2004) (defining lex rei sitae). Translated from Latin, lex rei sitae means "the law where the property is situated." Id.

(48.) See CROBECO, supra note 4 (noting law of property's location governs acquisition transaction).

(49.) See CROBECO, supra note 4 (stating CROBECO will respect existing principles); see also infra Part III(B)(1) (explaining how CROBECO will interact with existing legislation).

(50.) See Wallace, supra note 43 (describing land register as tool to assist management of resources and administration of interests).

(51.) See CROBECO, supra note 4 (noting different legal registration systems); see also Ploeger et al., supra note 41, at 6 (explaining land registry information given to interested parties in different degrees). Some registries allow searches by owners' names, while others only allow parcel-based searches. Id. In terms of access, some registries give out parcel information to any interested party, while others require requesting parties to demonstrate the level of their interest in the property, and still others provide no overviews whatsoever to the public. Id. The Spanish land registry, in use in its current form since 1861, allows interested members of the public to research the legal status of parcels of land. See Europa, Land Registries in Member States--Spain (last visited Oct. 10, 2011), available at https://e-justice.europa.eu/ contentPresentation.do?plang--en&idCountry--es&idTaxonomy_-109&member=l&v mac=uaFvy6D1IMriMC4RPoFAhAL2AGxAZM-o3hv3wE6gSkESf51249bBAR5j9Y UN8_HYPMu3DtOXMSMBRZDWnjBNzwAAILQAAABv (providing overview of Spanish land register).

(52.) See Ploeger et al., supra note 41, at 1 (stating European Union Land Information System (EULIS) project objective). Initially, EULIS aimed to assemble the land registry information of eight EU member states into one convenient web location so prospective buyers could compare land registry system information across many countries simultaneously. Id. Ploeger also suggests the implementation of a "EuroTitte", a title that would be granted in one jurisdiction but recognized by all EU member states, which would be instrumental in facilitating the creation of a common European mortgage. Id. at 8-10; see also About Us, EULIS (2010), http://eulis.eu/ about-us/[hereinafter EULIS] (describing EULIS subscription-based land registry research database); One Vision, One Europe United Through Geographical Information, EuROGEOGRAPHICS http://www.eurogeographics.org/sites/default/files/Euro Geographics_introductory%201eaflet A4 2sided_v62.pdf (last visited Nov. 13, 2011) (detailing EuroGeographics association for EU mapping and cadastral agencies). EuroGeographics aims to ensure that EU map databases are harmonious. Id. Representatives of ELRA, EuroGeographics, and EULIS met in the summer of 2010 and reaffirmed their commitment to support each other's projects aimed at enhancing land administration in the European Union. Id.; European Land Related Organizations Agree to Cooperate to Enhance the Land Administration Systems in the EU, ELRA (July 14, 2010), http://www.elra.eu/?p=517 (summarizing meeting of various organizations concerned with land administration).

(53.) See What is ELRA?, ELRA, http://www.elra.eu/?page_id=8 (last visited Nov. 10, 2011) (summarizing founding of ELRA). Presently, ELRA is comprised of twenty-six land registry organizations from twenty EU member states. Id.

(54.) See id. (providing ELRA mission statement).

(55.) See What is ELRA?, supra note 53 (stating desire to promote understanding of land registry systems); see also EULIS, supra note 52 (explaining EULIS provides information regarding European properties to members).

(56.) See What is ELRA?, supra note 53 (noting respect for traditional property law).

(57.) See CROBECO, supra note 4 (enumerating principles CROBECO aims to respect).

(58.) See CROBECO, supra note 4 (giving reason for creation of project).

(59.) See CROBECO, supra note 4 (outlining CROBECO's process for land purchase); see also CROBECO Position Paper, supra note 41 (noting bilingual contracts key feature of CROBECO); infra Parts III.B.1.b. and c. (explaining how CROBECO utilizes choice of law principles).

(60.) See CROBECO, supra note 4 (stating greater confidence in ability to seek redress should increase buyer confidence).

(61.) See CROBECO, supra note 4 (stating different systems not amenable to immediate implementation of single conveyancing scheme).

(62.) See id. (explaining pilot project where Dutch nationals buy Spanish properties).

(63.) See CROBECO, supra note 4 (noting aim of project to develop CCRF). A working draft of the CCRF was presented in 2010. Id. The draft is available for viewing and open to comments on ELRA's website. Id.; see also CROBECO Position Paper, supra note 41 (stating ELRA hopes to develop common reference framework).

(64.) See CROBECO, supra note 4 (stating declaration of choice of law possible due to EC Regulations).

(65.) See CROBECO, supra note 4 (explaining what makes choice of law viable option). EC Regulation Number 864/2007 allows buyers to make the same choice of law decisions with respect to non-contract obligations. Id.; see also Regulation 593/ 2008, of the European Parliament and of the Council of 17 June 2008 on the Law Applicable to Contractual Obligations (Rome I), art. 3, 2008 O.J. (L 177) 6, 10 (EC) [hereinafter Regulation 593/2008] (stating contracts governed by law parties choose); Regulation 864/2007, of the European Parliament and of the Council of 11 July 2011 on the Law Applicable to Non-Contractual Obligations (Rome II), art. 14, 2007 O.J. (L. 199) 40, 46 (EC) [hereinafter Regulation 864/2007] (stating parties can choose applicable law before or after damaging event occurs); The Law Applicable to Contractual Obligations--The Rome I Regulation, EUROPA (last updated Sept. 22, 2008), available at http://europa.eu/legislation_summaries/justice_freedom_security/judicial_cooperation in civil_matters/jl0006_en.htm (summarizing EC 593/2008). While parties are free to contract using the law they wish, there are certain instances where this tactic cannot be used, such as with trusts, family relationships, and the actual sale of real property. The Law Applicable to Contractual Obligations--The Rome I Regulation, supra.

(66.) See CROBECO, supra note 4 (stating buyers may seek compensation in home courts). ELRA suggests that, if the scheme is applied, buyers could seek compensation in their native courts if the property was encumbranced by "unknown public limitations." Id.

(67.) See CROBECO, supra note 4 (stating project premised on bilingual deeds); CROBECO Position Paper, supra note 41 (noting deeds in home and foreign languages).

(68.) See CROBECO, supra note 4 (noting buyers' ability to seek indemnification in home country).

(69.) See id. (stating project should boost foreign buyer confidence and encourage foreign property purchases); see also Bram Akkermans, Crobeco (Cross Border Electronic Conveyancing) Conference, Brussels 25 November 2010, MAASTRICHT EUROPEAN PRIVATE LAW BLOG (Nov. 26, 2010), http://www.mepli.eu/category/conferenceproperty-law-crobeco/ (noting when followed, CROBECO guidelines will increase foreign buyer confidence).

(70.) See O'Hare, supra note 3 (noting project may encourage investors looking for properties). Likewise, the project will likely help Spain lure foreign buyers back into its less-than-tepid market. Id. MEP Diana Wallis of the United Kingdom also lent her vote of confidence to the fledgling CROBECO project, lauding the benefits of bilingual contracts. Id.; see also Spanish Property Buyers Given a Boost by New EU and Spanish Legislation, PEREZ LEGAL GROUP BLOO (July 8, 2011), http://www. perezlegalgroup.es/Blog/tabid/257/EntryId/26/Spanish-property-buyers-given-a-boostby-new-EU-and-Spanish- legislation.aspx (anticipating CROBECO will give Spanish housing market boost because people more comfortable contracting under own laws); UK MEP Praises EU Property Cross-Border Scheme, PARLIAMENT.COM, (June 16, 2011), http://www.theparliament.com/latest-news/article/newsarticle/uk.mep-praises_eu-property-cross-border-scheme/ (stating expectation of increased buyer confidence); CROBECO Press Release, supra note 4 (emphasizing increased buyer confidence in CROBECO transactions).

(71.) See CROBECO, supra note 4 (stating lex rei sitae governs acquisition of real property); see also CROBECO Press Release, supra note 4 (noting CROBECO transactions fulfill lex rei sitae requirements).

(72.) See BLACK'S LAW DICTIONARY, supra note 47 (defining lex rei sitae); see also ELRA Contribution to the Green Paper: Less Bureaucracy for Citizens: Promoting Free Movement of Documents and Recognition of the Effects of Civil Status Records 1, 2, ELRA, (Apr. 16, 2011), available at http://ec.europa.eu/justice/newsroom/civil/ opinion/files/ll0510/organisations/elra_en.pdf [hereinafter ELRA Contribution] (stating any standardized land transaction form must comply with lex rei sitae).

(73.) See Akkermans, supra note 69 (stating CROBECO does not change applicable law and respects lex rei sitae); see also CROBECO, supra note 4 (noting positive psychological effects for buyers despite inability to alter lex rei sitae).

(74.) See Ploeger et al., supra note 41 (predicting enormous resistance if land registries attempt to choose one system over another).

(75.) See CROBECO, supra note 4 (noting respect for existing practices).

(76.) See CROBECO Position Paper, supra note 41 (noting potential drawback to CROBECO could be registries' refusal to honor contracts).

(77.) See id. (stating buyers' registrars should attach affidavits verifying legality of contract under home country laws). CROBECO suggests the registrar from the buyer's home country then send the affidavit to the registrar of the country where the land is situated. Id.; see also CROBECO Press Release, supra note 4 (observing Dutch registrar would advise Spanish registrar).

(78.) See CROBECO, supra note 4 (stating CROBECO does not wish to change or expand existing responsibilities).

(79.) See CROBECO Press Release, supra note 4 and accompanying text (detailing first CROBECO transaction on November 25, 2010).

(80.) See CROBECO, supra note 4 (stating objectives and mechanisms of CROBECO project).

(81.) See generally EUROPEAN PROPERTY RIGHTS AND WRONGS (Diana Wallis & Sarah Allanson eds., 2011), available at http://www.elra.eu/wp-content/uploads/file/ Europe an % 20Property % 20Rights % 20and % 20Wrongs_Ms_%20Diana%20Wallis. pdf (discussing various property law issues in European Union as presented at CROBECO Conference); William Louwman, Presentation, Summary of CROBECO, at II CROBECO Conference (Dec. 1-2, 2011), available at http://www.elra.eu/wp content/uploads/file/4_%20Mr_% 20Wire%20Louwman_Report % 20CROBECO %20 Conference.ppt (summarizing conference and noting countries' indication of desire for respect of existing principles); CROBECO 2011 Press Release, supra note 5 (summarizing conference).

(82.) See Jesus Carny Escobar, Presentation, CROBECO Helpdesk, at II CROBECO Conference (Dec. 1-2, 2011), available at http://www.elra.eu/wp-content/ uploads/file/4_%20Mr_%20Jesus%20Camy_CROBECO%20Helpdesk.ppt (discussing how helpdesks in participating countries could smooth out conveyancing process).

(83.) See CROBECO 2011 Press Release, supra note 5 (expressing desire on part of English land registry board to begin CROBECO pilot).

(84.) See A Growing Union, supra note 41 (stating current number of EU member countries); CROBECO Position Paper, supra note 41 (recognizing breadth of different land conveyance systems in European Union).

(85.) See Edge, supra note 1 (explaining ordinance aimed at punishing dishonest builders may affect even innocent transactions).

(86.) See id. (noting illegal actions by construction companies source of problem).

(87.) See Meo et al., supra note 1 (illustrating consequences to expatriate homeowners under laws and conveyancing schemes currently in place).

(88.) See CROBECO, supra note 4 (stating acquisition of real property legally governed by law of land where property situated).

(89.) See A Growing Union, supra note 41 (stating twenty-seven EU countries at present); Ploeger et al., supra note 41 (noting differences between EU member country land registry schemes). Adding to the confusion, land registry systems fall into two major types, title registration and deed registration, which record land ownership in fundamentally incompatible manners. Id.

(90.) See Urbanization Report, supra note 27, at 14 (noting numerous complaints from foreign buyers who fell prey to schemes). It is also interesting to note, however, that about half of the complaints in Spain came from Spaniards, which suggests that language is not the only force in play. Id.

(91.) See CROBECO, supra note 4 (explaining lex rei sitae principle determines which laws actually govern acquisition of real property).

(92.) Id. (explaining how CROBECO provides for application of different sets of laws to different parts of contract).

(93.) See Regulation 593/2008, supra note 65, at art. 3 (stating parties can choose law to govern contracts in most circumstances); CROBECO, supra note 4 (explaining how redress and acquisition clauses may be severed and governed by different laws).

(94.) See O'Hare, supra note 37 (explaining Spanish due diligence research service for buyers).

(95.) See id. (noting aim of Spanish government property service to clarify safety of buying parcel). Completing the research process and purchasing the certificate would theoretically provide buyers with judicial support in the event their houses were later declared illegal. Id.

(96.) See id. (noting issues with system). One 2011 search on a house located in Almeria accurately described the home but failed to note that it was demolished in 2008. Id. Other buyers are upset after purchasing the "guarantee" certificates, only to find they do not reveal that the properties are indeed subject to land-grab ordinances. Id.

(97.) See O'Hare, supra note 37 (listing shortcomings of system). Although the Spanish government had good intentions when setting up the system, it cannot provide meaningful peace of mind to potential buyers unless drastic improvements are made to the quality and delivery of information provided on the site. Id.

(98.) See Edge, supra note 1 (stating express demolition ordinance leaves homeowners few or no options for recourse).

(99.) See supra Part II.B.2 (summarizing story of Len and Helen Prior).

(100.) See Edge, supra note 1 (estimating 5,000 other buyers similarly situated). While many homebuyers face demolition orders that would literally demolish their life's savings, still others must live without electricity or water, as builders falsely promised access to municipal utilities with the knowledge that the government would not grant them. Id.; see also Meo et al., supra note 1 (explaining fears of expatriate homeowners). Given the dozens of highly publicized cases, like those of the Priors and the Burns, it is unsurprising that buyers have such little confidence when buying property in Spain. Id.

(101.) See CROBECO, supra note 4 (stating buyer confidence key aim of CROBECO pilot); Akkermans, supra note 69 (noting CROBECO has potential to increase buyer confidence). Greatly decreased buyer confidence in a depressed housing market was one of the main reasons the CROBECO project was developed. See CROBECO, supra note 4 (explaining why project created).

(102.) See Edge, supra note 1 (recounting episodes where good-faith buyers lost homes); Meo et al., supra note 1 (noting permission to build should not have been granted); Bond, supra note I (noting retroactive nullification of building permits negatively affected good faith buyers).

(103.) See Urbanization Report, supra note 27, [paragraph] Ah (noting even good faith buyers face demolition). Those buyers who seek redress in the law of the country where the property is located must not only navigate a foreign legal system and the logistical obstacles it presents, but are also often forced to wait for redress which may or may not adequately compensate them for their loss. Id. See Edge, supra note 1 (explaining difficulty faced by couple seeking compensation in Spanish courts).

(104.) See O'Hare, supra note 37 (noting massive shortcomings of system initiated by Spanish government).

(105.) See Mwathane, supra note 3 (emphasizing need for more fluid cross-border transactions). Simpler and more efficient cross-border transactions in the European Union could pave the way for other transactions worldwide, because such a program has never been attempted elsewhere. Id.

(106.) See CROBECO, supra note 4 (emphasizing use of electronic methods key to success of program). Electronic communication is necessary due to the time-sensitive nature of land transactions, Id. See CROBECO Position Paper, supra note 41 (providing acronym). Highlighting the importance of electronic communications in the project, the "E" in the CROBECO acronym stands for "electronic." Id.

(107.) See Summary of CROBECO, supra note 81, at III (indicating need to update CROBECO website). In addition to professionals-only areas, there would also be areas for user groups to provide information from specialists. Id.

(108.) See Ploeger et al., supra note 41, at 7 (noting major differences between types of land registration systems in Europe); Wallace, supra note 43 (noting development of different land registry systems in different countries).

(109.) See CROBECO, supra note 4 (stating respect for different "responsibilities between registrars and conveyancers" in different countries).

(110.) See Wallace, supra note 43 (outlining development of deed and title systems).

(111.) See CROBECO, supra note 4 (indicating first draft of referencing framework presented in November, 2010); CROBECO Press Release, supra note 4 (indicating first transfer under CROBECO occurred on November 25, 2010).

(112.) See 2011 CROBECO Press Release, supra note 5 (indicating deeds have been registered under CROBECO framework).

(113.) Id. (summarizing second CROBECO conference). Information provided at the conference indicates that the essential framework of CROBECO is functioning well; however, some technical and practical issues must be addressed. Id.

(114.) See CROBECO, supra note 4 (indicating framework will support conveyancers and buyers); CROBECO Position Paper, supra note 41 (noting knowing protective clauses ahead of time will boost buyer confidence). See CROBECO Press Release, supra note 4 (indicating framework should boost cross-border property sales). According to research by ELRA, drawing the deed in the buyer's home country increases buyer confidence, Id.

(115.) See Urbanization Report, supra note 27, [paragraph] T (noting Parliament received many complaints from individuals and organizations concerning land-grab laws). The problem caught ELRA's attention, which realized foreign buyers expect to receive the same legal benefits and protections when contracting under the laws of another country as that they would expect to receive in their own country; however, this is often not the case. Id. See also CROBECO Position Paper, supra note 41 (indicating cognizance of problem).

(116.) See CROBECO, supra note 4 (indicating desire to increase buyer confidence); 2011 CROBECO Press Release, supra note 5 (stating CROBECO wants to "establish simpler and more confidence-inspiring process for EU citizens").

(117.) See CROBECO, supra note 4 (explaining how framework will increase buyer confidence).

(118.) See CROBECO Position Paper, supra note 41 (stating CROBECO allows buyers to apply protective clauses under own laws of home country).

(119.) Id. (stating bilingual deeds will be employed). The ability to write in one's own language is critical, because buyers feel their interests are more accurately represented and protected. Id.

(120.) See CROBECO, supra note 4 (indicating increased confidence from bilingual deeds); CROBECO Position Paper, supra note 41 (stating bilingual deed and choice of law provisions increase buyer confidence).

(121.) See 2011 CROBECO Press Release, supra note 5 (reporting increased buyer confidence). Dutch buyers have already expressed their preference for redress provisions drawn from Dutch law; they also feel more confident when using their own language when drafting deeds. Id.

(122.) See CROBECO, supra note 4 (indicating need for CROBECO transactions to be conducted entirely online).

(123.) See id. (noting all CROBECO transactions electronic).

(124.) See id. (noting expedited nature of online deed registration). The CROBECO system allows buyers and land registry professionals to communicate in real time. Id.

(125.) See Escobar, supra note 82, at II (indicating tool will be created for use of registrars).

(126.) See id. (specifying details surrounding creation of CROBECO helpdesks). Each country will be able to determine what information will be included on its helpdesk, though all helpdesks will have the same design. Id. Buyers or their agents will also be able to track the status of pending transactions. Id. Access to information on the helpdesks themselves will be limited to professionals, so as to not undermine their role in land transactions. Id.

(127.) See Escobar, supra note 82 (outlining how CROBECO website will be expanded to include helpdesks); Louwman, supra note 81 (indicating how CROBECO website will be updated). The new website will have three additional areas, including an area for professionals, such as members of ELRA and EULIS, an area to submit documents, and an area where registrars can exchange information with each other. Id.

(128.) See CROBECO, supra note 4 (indicating main principle of CROBECO not to change existing schemes). CROBECO explicitly states a new generic conveyancing system would make little sense, as property law developed differently in different EU member states over time. Id. Trying to supplant or replace them would be futile because some country would inevitably feel their laws and history were being deemed inadequate and overridden in the interests of simplicity. Id.

(129.) See CROBECO, supra note 4 (noting respect for lex rei sitae). Although CROBECO transfers respect the lex rei sitae principle, they nonetheless have important psychological benefits for buyers, who feel better protected by having redress provisions governed by their own laws. Id.; see also 2011 CROBECO Position Paper, supra note 5 (noting increased confidence despite buyer's home country laws only applying to some provisions).

(130.) See CROBECO, supra note 4 (indicating CROBECO does not wish to change existing responsibilities and duties of registrars). Leaving responsibilities as they exist presently is wise, because participation in CROBECO is voluntary; forcing registrars, notaries, and other officials to take on additional responsibilities could decrease overall willingness to participate in CROBECO or a program like it. Id.

(131.) See id. (stating respect for existing systems, responsibilities of registrars, and legislation).

(132.) See 2011 CROBECO Press Release, supra note 5 (noting practical problems observed after test phase).

(133.) See Louwman, supra note 81 (noting need for helpdesks and additional clauses provided by receiving country).

(134.) See Escobar, supra note 82 (outlining plan for development of country-by-country helpdesks).

(135.) See id. (commenting on creation of helpdesks). Because each country may provide the information for its helpdesk, it can be confident that it is providing the information needed by registrars and professionals in other countries to draft deeds that comply with the laws of both countries. Id. Access to the helpdesks will be limited to professionals. Id.

(136.) See Louwman, supra note 81 (indicating need for more standardized clauses to be provided by recipient countries). CROBECO consistently advocated for the use of standardized protective clauses that a receiving country can approve in advance, further increasing buyer confidence should they need to seek redress. Id.; see also CROBECO Position Paper, supra note 41 (explaining standard clauses would give right to indemnification or compensation).

(137.) See Louwman, supra note 81 (offering CROBECO's assistance in translating standardized protective clauses).

(138.) See id. (explaining how information would be integrated onto new CROBECO portal). Restricting access to professionals is an important feature as it prevents the undermining of the functions registrars, notaries, and other land transaction professionals play in their respective countries. Id.

(139.) See CROBECO, supra note 4 (indicating countries voluntarily participating in pilot phase).

(140.) See id. (indicating CROBECO will not supersede any processes currently in place). CROBECO respects existing legislation by allowing parties to use Regulation 593/2008 of the Rome I Treaty to apply the law of their native country to the redress provisions of a contract. Id. This just manipulates choice-of-law flexibility, however, and does not displace any laws currently in place. Id. Professor Guillermo Palao, of the University of Valencia, has been involved in several CROBECO deeds; he emphasized that CROBECO processes can be introduced without any change whatsoever to existing legislation. See 2011 CROBECO Press Release, supra note 5 (explaining experience of professionals with CROBECO processes).

(141.) See CROBECO Position Paper, supra note 41 (indicating potential drawback of CROBECO). Registrars in recipient countries can, and should, refuse contracts partially governed by foreign laws if they are not convinced of the binding power of such contracts. Id. As such, registrars in recipient countries will need to be more vigilant and dependent upon their fellow registrars in the country initiating deeds in cross-border transactions. Id. It is recommended that the registrar of the initiating country should attach a statement verifying the legality of the contract to aid his or her counterpart in the receiving country. Id. The proposed CROBECO helpdesks should help immensely in this regard. See Escobar, supra note 82 (explaining how interface will allow registrars to communicate with their counterparts).

(142.) See CROBECO, supra note 4 (stating bilingual deed makes provisions for redress subject to governance by laws of buyer's home country). Sellers, understandably, may not want the redress portion transaction to be governed by the laws of a foreign country. Id.

(143.) See 2011 CROBECO Press Release, supra note 5 (summarizing early reactions to CROBECO). The reaction to CROBECO thus far, however, has been mostly positive. Id. In a depressed housing market such as that of Spain, sellers may be more willing to stand behind the sale and subject themselves to the laws of another country for redress in order to secure sales. See Spanish Property Buyers Given a Boost by New EU and Spanish Legislation, supra note 70 (indicating increased confidence may stimulate housing market); Bailen, supra note 12, at 2 (explaining housing market dynamics in Spain).

(144.) See 2011 CROBECO Press Release, supra note 5 (indicating successful transfers already occurring).

(145.) See id. (indicating willingness of Board of Land Registry of England and Wales to begin promoting CROBECO pilot). The Board would like to facilitate transactions between England and Wales, Spain, and Portugal. Id. This move would go far in increasing buyer confidence, as British expatriates are the largest group of homeowners affected by the land-grab laws. See Meade, supra note 21 (stating British expatriates forced to pay for basic municipal services); O'Hare, supra note 27 (noting British expatriates make up disproportionate amount of Spanish property buyers).

(146.) See CROBECO, supra note 4 (noting pilot between Spain and the Netherlands). While other countries have indicated their interest in participating, CROBECO transactions are still only occurring between Spain and the Netherlands. See CROBECO 2011 Press Release, supra note 5 (indicating England's desire to participate).

(147.) See CROBECO, supra note 4 (summarizing third conference).

(148.) See id. (indicating desire to expand program). Per a 2010 statement, ELRA indicated its desire to vote on a final version of the framework in May 2012, but it did not appear a vote occurred. Id. Since there is still only data from the two pilot countries, however, ELRA may ultimately decide to wait until the program is tested in more countries to make a final vote. Id.

(149.) See CROBECO Press Release, supra note 4 (indicating ELRA to use CROBECO as research tool to develop cross-border property transaction reference framework).
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Author:Griffin, Christine E.
Publication:Suffolk Transnational Law Review
Date:Jan 1, 2013
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