Areas that have been taken outside forest boundaries because they were found to have lost their forest character, and which for the most part remain registered in the name of the Treasury, are referred to in practice as 2B land. The transfer of the relationships established over these immovables, sales carried out informally, changes in the holder of the right of use and the question of devolution following the death of the entitled person account for a considerable share of real estate disputes.
At the root of the problem there is usually a single misconception: treating the status of user as equivalent to ownership. When one adds to this the difficulty of establishing who actually holds the immovable, the question of who is to be regarded as the owner of the improvements on it, and how the procedure for conversion to a title deed operates, disputes arise that take time to resolve.
In this briefing note we examine the transfer of entitlement in 2B immovables, its passage to the heirs, the disagreements frequently encountered in practice and the proceedings to which they give rise.
The Concept of 2B Land
Immovables that were formerly regarded as forest but were taken outside the forest boundary because they were found to have lost that character for various reasons are described as 2B land. Ownership of such areas for the most part remains with the Treasury, while various disputes as to entitlement may arise in respect of those who actually use the immovable.
At the core of the disputes in this field lie the identification of the user, whether the conditions for entitlement have been satisfied, the procedure for conversion to a title deed and the demonstration of actual use.
The Legal Nature of 2B Land
The fact that they have been removed from the forest regime does not alter the ownership position of these immovables; in most cases the land registry record continues to stand in the name of the Treasury. For that reason actual use maintained over 2B land does not of itself give rise to a right of private ownership.
Although in practice the status of user and the status of owner are frequently used interchangeably, actually using a 2B immovable does not lead to the conclusion that one is its owner.
Exclusion from the Forest Boundaries
Where it is established that the forest character has been lost, the immovable is taken outside the forest boundaries following a series of administrative acts. The forest cadastre and the related administrative procedures set the framework of this process.
A decision to exclude land from the boundaries does not mean that the immovable automatically becomes the subject of private ownership. In a great many cases the immovable continues to be registered in the name of the Treasury.
User Status Against Treasury Ownership
While ownership of 2B land belongs as a rule to the Treasury, persons who hold the immovable in fact are characterised as users.
This concept denotes persons who have established factual control over the immovable and who, where the conditions are met, may assert entitlement. That status alone, however, does not produce the result of ownership.
Within this framework, the most heavily debated questions in practice are who is to be regarded as the owner of the improvements on the immovable, from what date the use has continued, how actual use is to be determined and who the user is.
The Boundary Between the Right of Ownership and the Right of Use
The most decisive legal distinction concerning 2B land is that the right of ownership and the right of use are not the same thing.
If the immovable is registered in the name of the Treasury, ownership continues to rest with the State; persons in the position of user may hold only certain limited rights and expectations over the immovable.
Indeed, the fact that entitlement has been established, that the improvements are regarded as belonging to a person, that there is a user record or that the immovable is actually being used — none of these confers a right of ownership on its own. Conversely, where the conditions required by the legislation are satisfied, it may become possible for users to purchase the immovable or to obtain a title deed in their own names.
Entitlement in 2B Land
In disputes concerning these immovables, determining to whom the entitlement belongs comes first. Who actually uses the immovable, how far back the use goes and to whom the improvements on it belong are facts that directly affect the outcome in practice.
Entitlement in 2B land is not equivalent to registered ownership; it denotes a special status conferred, within the framework of Law No. 6292 and the related legislation, on persons who satisfy certain conditions.
Who Is Recognised as an Entitled Person?
The entitled person is the person who is accepted as satisfying the conditions laid down in the legislation and as actually using the immovable. In practice this status is for the most part recognised in favour of those who have had actual use of the immovable for many years.
Even so, the existence of actual use alone is not regarded as sufficient for entitlement in every case. The administrative records and the particular circumstances of the specific case are assessed together.
Determining the User
Identifying the user is one of the most contested questions in this field. In making that determination, the buildings and improvements on the immovable, the date from which the use has continued, the form of the use, the past pattern of use and who actually uses the immovable are considered together.
In practice this assessment is carried out on the basis of cadastral records, aerial photographs, court-appointed expert examinations, witness statements and records held by the municipality and the administration.
Ownership of Improvements
Improvements denote buildings, structures, trees and similar elements subsequently created on the immovable. In 2B land, the question of to whom these elements are to be regarded as belonging may produce considerable consequences for entitlement.
It is frequently seen that persons who have erected structures on the immovable or created economic value assert various claims on the basis of ownership of the improvements.
Ownership of the improvements and ownership of the immovable are, however, separate concepts. The fact that the improvements belong to a person does not result in that person being regarded as the owner of the immovable.
The Weight of Actual Use
In the assessment of entitlement, actual use is among the most decisive of the criteria applied. By whom the immovable has been used over a long period, whether it has been cultivated and harvested, and whether there is a structure on it also carry weight.
In this context the state of factual possession, the use of the immovable for economic purposes, the factual control exercised over it and whether the use has continued without interruption are included in the assessment.
The Criteria Applied in the Assessment
When entitlement is examined, reliance is placed not on a single fact but on reading several items of evidence together. The principal criteria applied in practice are as follows:
- Acts of disposition carried out over the immovable
- User annotations in the declarations column of the land register
- Cadastral and other administrative records
- To whom the improvements belong
- The position under the user records
- The duration of the use
- The nature of the actual use
Where several persons assert rights over the same immovable, the weight of these criteria increases still further.
The Transfer of Entitlement
The question most frequently encountered in relation to 2B land is the transfer of entitlement to another person. Making immovables that are in actual use the subject of informal sales, leaving the right of use to third parties and transferring improvements are all widespread in practice.
Because the status of user does not coincide with the right of ownership, the legal nature of these transfers is assessed differently from sales of registered immovables. Informal sales, transactions executed before a notary and changes in the holder of the use are for that reason the source of a great many disputes.
Can Entitlement Be Transferred to Another Person?
Entitlement in these immovables does not carry the same legal force as a registered right of ownership. Accordingly, what changes hands between the parties is for the most part not the formal ownership of the immovable but the actual use, the status of user and the expectation of entitlement.
Various transfer transactions may be carried out between the parties; it should not be overlooked, however, that these transactions do not produce the result of a formal transfer of title.
Informal Sales
2B immovables for the most part change hands under informal sale agreements. Actual use of the immovable may be left to another person by means of agreements in simple written form, deeds of sale or similar documents drawn up by the parties.
These transactions do not have the character of a formal transfer of title, do not transfer ownership directly and, in the result, most often amount only to a transfer of actual use.
Because of this structure, it is a frequent outcome that a single immovable is transferred to several purchasers unaware of one another, or that a dispute arises over entitlement.
Notarial Instruments and Letters of Consent
In order to strengthen the sale relationship, the parties often have an agreement or a letter of consent drawn up before a notary. The fact that the transaction was executed before a notary does not, however, mean that ownership of the immovable has been formally transferred.
In practice, notarial instruments serve rather to show that the improvements have been transferred, to demonstrate that actual use has changed hands and to prove the intention of the parties.
The Transfer of the Right of Actual Use
The most widespread form of transfer in these immovables is the leaving of the use to another person in fact. It is a practice constantly encountered in the field for the person using the immovable to relinquish that use to another.
What matters here is the delivery of the immovable, the leaving of the use to the transferee and the passing of factual control over the immovable to the other party. Transfer of use and transfer of ownership are, however, different concepts; taking over actual use does not of itself lead to the conclusion that a right in rem over the immovable has been acquired.
The Transfer of Improvements
In 2B land, buildings, structures, trees and similar improvements on the immovable are also frequently made the subject of transfer transactions.
Since planted trees, agricultural structures, business premises and dwellings carry economic value, the transfer of improvements arises frequently in practice. Even so, the transfer of improvements and the transfer of ownership of the immovable are separate legal transactions. Dispositions made over the improvements do not mean that ownership of the immovable has also been transferred.
Transfers to Third Parties
Although transfer transactions relating to 2B land may in some cases be asserted against third parties, they do not have the character of a right in rem founded on a formal land registry record.
For that reason entitlement documents, administrative records, the state of actual use and the identification of the user become decisive. It should also be borne in mind that the entitlement assessment to be made by the administration may produce its effects independently of the informal transactions between the parties.
The Problem of Proof in Informal Sales
Although informal sales are frequently resorted to, proving these transactions before a court often creates serious difficulty.
The transfer of the same immovable to different persons, the inability to prove the sale price, actual use being contested and the absence of any written document are common causes of dispute. To guard against this, it is important that the position as to use be recorded, that delivery be effected in clear terms and that the transaction be reduced to a written document. In this respect such transactions present an appearance similar to the transfer of unregistered immovables.
Simulated Transfers
Transfer transactions by way of simulation are also frequently encountered in 2B land. Transactions intended to mislead third parties, sham transfers made within the family, the concealment of entitlement and the creation of the appearance of a sale where in reality there is none are assessed within this scope.
In disputes in which such allegations are raised, the courts consider the true intention of the parties together with the state of actual use.
The Devolution of Entitlement by Inheritance
The passage of entitlement to the heirs on death is one of the disputes most frequently seen in this field. Following the death of the person actually using the immovable, various disagreements may arise over the heirs’ use, whether they are to be regarded as entitled persons and the stage of conversion to a title deed.
What devolves upon the heirs is generally not a right of ownership founded on a title deed, but the position of user, the actual use of the immovable and the expectation of being regarded as an entitled person. The rules of succession law and the administrative processes therefore operate in an interwoven manner.
The Passage of Entitlement to the Heirs
When a person holding the status of user or entitled person dies, actual use and the position of entitlement may, under certain conditions, devolve upon the heirs.
What is decisive here is that the conditions for entitlement have been preserved, that the use is continued through the heirs and that the immovable continues to be actually used. Even so, passage to the heirs does not mean the transfer of registered ownership.
The Effect of Heir Status
When entitlement is assessed, the status of heir plays an important role. The heirs left behind by the person regarded as user may assert different claims as to the use of the immovable and to entitlement.
Conversely, merely being an heir is not regarded as sufficient for entitlement. Who holds the actual use, and the particular circumstances of the case, are examined in addition.
Where There Are Several Heirs
One of the most widespread problems in practice is that several heirs assert rights over the same immovable. If conversion to a title deed takes place, how the shares are to be determined, by whom the entitlement application is to be made, how the use is to be shared and who actually uses the immovable may all become matters of contention at this point.
In such disputes the fact of actual use carries decisive weight in practice.
The Function of the Certificate of Inheritance
In transactions relating to 2B land the certificate of inheritance is an important means of proof. This document is frequently resorted to in order to establish who the heirs of the entitled person are.
In entitlement applications, in administrative acts and in proceedings, the formal documentation of the position as to succession is of great importance.
Disputes Between Heirs
The contentions most frequently encountered between heirs are concentrated on how the division is to be made if conversion to a title deed takes place, in whose name the entitlement application is to be made, to whom the improvements are to be regarded as belonging, the enjoyment of the income derived from the use, and who actually uses the immovable.
Particularly where the immovable has been used for many years by a single heir alone, serious disagreements may arise with the other heirs.
The Legal Consequences of Transfer and Devolution
A change in the holder of entitlement in 2B land does not concern actual use alone; it also directly affects the stage of conversion to a title deed, the determination of entitlement and any ownership contentions that may arise in the future.
A change in the holder of factual control, use relationships established between heirs, changes of user and sales carried out informally may all lay the ground for a great many legal problems. In carrying out these transactions it must always be borne in mind that the status of user and the right of ownership are separate concepts.
The Effect on the Continuation of Entitlement
Transfers made, or passage occurring by way of inheritance, may directly affect the assessment of entitlement. Who in fact continues the use, and in which person control over the immovable is concentrated, come to the fore at this point.
Transfers made informally do not, however, in every case produce the result that entitlement is automatically accepted by the administration.
The Effect on the Conversion to a Title Deed
The transfer of entitlement or its passage to the heirs may create considerable consequences at the stage of conversion to a title deed. At this stage the manner in which the use has been continued, to whom the improvements belong, in whom actual use lies and in whose name the application is to be made are taken into the assessment.
Accordingly, informal sales and changes in the use may become the source of various disputes in the process of conversion to a title deed.
Enforceability Against Third Parties
Although informal sales and transactions transferring use may in some cases be asserted against third parties, it must not be forgotten that they do not create a right in rem founded on a formal land registry record.
For this reason the ownership of the improvements, the administrative documents, the state of actual use and the user records become decisive. Where several persons assert rights over the same immovable, the contentions may become still more severe.
The Consequences for the Right of Ownership
The transfer of entitlement, or its passage by way of inheritance, does not produce the result of a transfer of registered ownership. Ownership of the immovable continues in most cases to belong to the Treasury.
The expectation of entitlement, actual use and the status of user are, in this respect, concepts separate from the registered right of ownership. Nevertheless, where the conditions in the legislation are satisfied, entitled persons may be granted the opportunity to purchase the immovable or to obtain a title deed in their own names.
Loss of Rights Seen in Practice
One of the most frequent problems in this field is the loss of rights. The transfer of the same immovable to more than one person, contentions between heirs, errors in the identification of the user, simulated transactions, the inability to prove actual use and the absence of any written document may in practice lead to severe detriment.
For that reason obtaining legal support when carrying out transfer and use transactions relating to 2B immovables takes on particular importance.
Independent Legal Assessment
In disputes concerning 2B immovables the parties often assume the protection afforded by the document in their hands to be stronger than it is. Yet a deed of sale drawn up informally, or a letter of consent obtained before a notary, does not of itself bind the entitlement assessment to be made by the administration. In files of this kind the real element determining the outcome is whether actual use can be documented without interruption.
The second critical point is that the administrative process and the private law relationship proceed on separate planes. Even if the transfer between the parties is regarded as valid, since the administration’s own records will be taken as the basis at the stage of conversion to a title deed, the process must be constructed from the outset with both planes in view.
In drawing up a road map in a specific file, the following matters should be given priority:
- Establishing the commencement date of the use with aerial photographs, cadastral records and witness evidence taken together
- Having the ownership of the improvements separately determined, independently of the immovable itself
- Setting out expressly in writing, in the informal transfer documents, the fact of delivery and the price
- Where heirs are involved, obtaining the certificate of inheritance and clarifying in which heir the use lies
- Investigating in advance, from the administrative records, whether any other claim of right exists over the same immovable
- Evidencing, against the possibility of an allegation of simulation, that the transaction reflects the true intention
Independent Legal provides advisory services throughout the whole of the process, from the determination of entitlement in relation to 2B immovables to applications for conversion to a title deed and the conduct of the actions arising from them.