XVII Congress in Lima, Peru 2010

The 17th International Congress of CINDER took place on the 11th and 14th October 2010. More than 300 professionals of 24 countries went to Hotel Sol de Oro, venue of the Congress in the City of Lima. Once again, the conference served to exchange experiences in Land Law.

The congress was organized by:

• Instituto Peruano de Derecho Registral
• Superintendencia Nacional de los Registros Públicos

The congress was opened by the Ministry of Justice, Rosario Fernández Figueroa, the President of the Instituto Peruano de Derecho Registral, Nelly Calderón Navarro;  the Superintendent, Alvaro Delgado and Secretary General of CINDER, Enrique Rajoy

They talked a lot about property law. It is surprising that, having the Land Registry, as it has, the function of assigning, delimiting and arranging the real property rights, this matter had never been discussed in a Conference. I suppose that the reason can be found in how weak our memory is; a weakness that explains why we sometimes forget that such things as progress or welfare do not exist by divine right or by chance but because there are certain institutions that create them. The amnesia of which I talk explains why legislators, sometimes and very often driven by the pressure of corporations or operators that only pursue their own interest propose or even adopt legal reforms that, under an appearance of harmlessness and modernisation, prove to be certainly harmful. We must remember that the institutions are the most serious thing which we have against such practice, the sole guarantee of existence of a true Welfare State of Law (_____Rule of Law).

Land Registries carry out entries that are true sovereign acts, entries that set-up the legal situation of real estate to the extent that they condition the judicial judgement that, in case of conflict, may be issued. As stated on the closing argument memorandum of the first subject matter, its existence means, on the one hand, the active and direct intervention of the State in the transfer system and implies, on the other hand, that whoever may have a legitimate interest may have access to know the referred legal situation. Lacking this intervention by the State in control, in assignment, there is only a situation of possession that makes it difficult for the good that is subject to transfer to convert into an economic asset, something that can only be obtained by contracting an assurance that makes the legal transactions more expensive and slows them considerably.

The lack of security in the ownership of the property jeopardises also the exercise of the social and political rights of citizens. We must not forget that, until the XIX century, until the industrial revolution transformed the economy of production into a credit economy and the social revolution transformed the subjects into citizens, that is, in persons with title to fundamental rights that the State is obliged to respect and protect, possession was more common that ownership. The welfare State of Law that arose from such revolution rightfully understood that the uncertainty, the provisional nature which this mere de facto situation (the possession) causes impedes both investments in the long term and the efficient reallocation of resources as well as the free exercise of human rights, in other words, it impeded its own consolidation. Its response was to create an institution to which it delegated its competence to establish the legal situation of real estate: the Registry.

The creation of the Registry was, therefore, an act of survival, of strength, of generosity of the Welfare State of Law. But its establishment and development is not easy. The Registry stands on three pillars: capacity, independence and the organization of a financing system that, on the basis of an objective liability, allows payment without delay of compensations arising from the damages caused by the errors that may be committed either when making an entry or when issuing the publicity on the legal situation of a certain good. This difficulty explains why, what are really just file storages have relatively often been presented as Registries, files that only process all kinds of information, both valid information and non-valid or contradictory information, a toxic and useless file for, in fact, it does not assign rights.

The Conference also analysed a most actual matter, the usucapio or acquisition prescription. It is of common knowledge that during the decade of the fifties began in Latin America and in other parts of the globe a process of emigration towards the cities that has intensified in the last years. This movement has given rise to many problems, among which the illegal settlements, that is, the illegal occupation of land. The phenomenon has become so huge that, nowadays, millions of persons are in such situation in the different cities of the world. On many occasions the land occupied are areas with an uncertain ownership that the occupying persons, that are aware of such situation, choose for the purpose of acquiring. The uncertainty of the legal situation of such land is the result from its lack of formalisation, as the Land Registry does not confer its ownership to anyone either because they are not registered or because the entries have scarce legal value and are just another means of proof to determine its ownership each time a dispute before the Courts arises. On other opportunities, it is the State and another of the entities of the Public Administration that have the ownership. With respect to them and in general, the rule of imprescriptible rights applies. However, legislations usually provide important exceptions. The solution with respect to the communal land, those the ownership of which has been conferred to a specific social group for the purpose of avoiding that, abusing of its innocence or inexperience, the group may be misled by someone for buying such land for a minimum consideration, is more complex. In some countries such as Brazil or Peru, this kind of legislation has tried to protect the aboriginal communities especially for the purpose of preserving its traditional way of life; in other countries such as Mexico, the protection has prevailed in favour of peasant communities through the establishment of the common land. In both cases, the result searched has not been obtained. Apart from the non-productivity of the land or the backwardness and definitive marginalization of the indigenous, the main problem has been the informal transactions of goods (and persons) that it has caused. The strictness of the regulation has favoured the appearance of mafias dedicated to the exploitation, speculation and also the misappropriation of land.

The different papers presented handled with the problems that this phenomenon causes which I have hereby only briefly explained. One of the subject matters that was most discussed was whether the usucapio against the Registry or contra tabulas should be admitted and, in this case, in which cases and under which requirements.

Many voices rose against those that were of the opinion that any kind of usucapio, whether ordinary or extraordinary, has to prevail over the assignment of the right that the Registry has made, which voices argued that ordinary prescription cannot be enforced against the protected third party that complies with all the requirements required by the Law in order to be respected in his acquisition and that, with respect to the extraordinary usucapio, it can only be admitted if one of the following two circumstances are met: 1. if, on the moment of the acquisition, he knows that the possessor has acquired the ownership of the land through usucapio; and 2., if he does not know it, he allows it during a certain period after registering the right in his favour.

The arguments of those that were in favour of the first opinion were mainly the following: the force majeure that the original means of acquisition have against the derived means, the idea that the consolidated possession is a “better” title than the “mere formality” and the moral conviction that the protection of the possessor has to prevail against the protection given to the owner.

The arguments of those in favour of the second opinion were, in their turn, the following:

1. In general that, from a social point of view, the recognition of the preference of the de facto situations against the legal reality, that is, against the assignment of rights made by the State can cause a “calling effect” that may multiply the phenomenon of the illegal occupations.
2. As regards the impossibility of the ordinary prescription contra tabulas, it was said that ordinary prescription cannot happen, as it cannot be understood that the acquirer (through usucapio) has possessed in good faith and as owner if the Registry assigns the ownership to another person as, otherwise, the entries in the Registry would not have erga omnes effects and the legal security would become more weak.
3. As regards the extraordinary usucapio, some understood that neither can this prevail, for it would mean giving preference to a hidden and non-registered title against the entries of the Registry, which would contradict the principle of opposability and of good faith and which would increase insecurity in real estate transactions; contracting would thus become more difficult with the subsequent increase in costs of transaction and financing and with the subsequent decrease in the value of the real estate and of the volume of the mortgage.

However, others clarified that, those legislations that, in order to protect his acquisition, request the good faith of the purchaser, should provide with an exception for the case in which he may know the fact of the usucapio, as, then, such good faith would not exist or that, in the case that he ignores it, he would allow the possession by the occupier for a specific term once the contract from which the right may derive has been registered.

Finally, I would like to thank all the attendants, for their presence, their effort and cooperation. Even if we sometimes tend to forget it, it is absolutely true that this presence, this effort and this cooperation are the base which supports CINDER, the base that allows it to be and to do the work of analysis, or study and of advice which is typical of it. I want to thank especially the Instituto Peruano de Derecho Registral (“Peruvian Institute of Registration Law”) and the SUNARP (“National Superintendence of Public Registries”) for their dedication, as well as all the members of the Organizing Committee of the Conference.