Conflict of collision resolution norms: Enforceability of tenancy as against a transferee of land

When title to land is transferred from one person (transferor) to another (transferee), a conflict may arise, if the transferor has leased a building on the transferred piece of land to a third person (tenant) before the transfer. In such cases, it has to be decided if the tenancy is enforceable as against the transferee.

There are provisions addressing this question in three statutes: the Code of Real Estate, the Act on Residential Leases and the Act on Commercial Leases. The Code of Real Estate is applicable to all transfers of land, the Act on Residential Leases is applicable to leases for residential purposes and the Act on Commercial Leases in applicable to leases for other than residential purposes. Consequently, the Code of Real Estate and one of the lease acts are often applicable at the same time. Furthermore, the provisions of the Code of Real Estate on one hand and the provisions of the lease acts on the other hand are often in conflict with each other. The purpose of the article is to resolve this normative conflict.

According to the Code of Real Estate, a lease is a registrable special right, and all registrable special rights established prior to a transfer are enforceable as against the transferee. A transferee can take land free of a registrable right only if he or she did not know nor should have known of the right at the time of the transfer and he or she applies for registration of title before the holder of the special right applies for registration of his or her right. However, according to the lease acts, it is not relevant what the transferee knew or should have known, but a lease is enforceable against a transferee if one of three conditions is met: the tenant has taken possession of the premises before the transfer takes place; if the contract between the transferee and the transferor contains a provision on the permanence of the lease agreement; or if the lease right has been registered.

A conflict of norms is often resolved by giving precedence to a more specific norm (lex specialis derogat legi generali) or to a later norm (lex posterior derogat legi priori). The conflict at hand should not be resolved applying one of these maxims mechani cally, but by looking into different situations in which these norms seem to be in conflict. In most cases, the norms can be reconciled by way of interpretation which takes into account the objectives of the norms and their historical background. In other cases, systematic reasons and policy considerations support giving precedence to the provisions of the Code of Real Estate.