The Importance of the Disposal Right for Transactions with Ownership Right on Real Estate

The purpose of this paper is to explain the importance of the disposal right for valid and legally effective transactions with ownership right on real estate. The disposal right is a legal possibility (entitlement) of the holder of the right to dispose of this right in a certain way. Differently as a substantive right, which is included in every (proprietary) right as its essential element, without which such right cannot exist, a disposal right is not an essential element of every proprietary right. For a (precise) definition of a disposal right, included in a specific proprietary right, it is necessary to define the way in which its holder is entitled to dispose with this proprietary right. The way in which a holder of a proprietary right is entitled to dispose with this right refers to the type of legal consequences (impact), caused by such disposal. Ownership right includes the legal possibility of its holder (owner) to transfer this right to a new owner, to limit this right by establishing a derivative proprietary right, or to transform it. The disposal right of the transferor is not a legal prerequisite for validity of the contract by which transferor undertakes to dispose with a proprietary right nor is it a legal prerequisite for validity of a permit for land register entry. By issuing a permit for land register entry to the beneficiary the ownership right is transferred from the transferor to the beneficiary with relative legal effect only in relation to the transferor. The permit for land register entry shall come into full effect (also in relation to third parties, and not only in relation to the transferor) only from the moment of submission of the proposal for the appropriate land registry entry on its basis. This means that for the legal effects of the permit for land register entry it is irrelevant whether the transferor has been a holder of the ownership right at the time of issuance of a permit for land register entry to the beneficiary. For these legal effects it is only relevant that the transferor is a registered owner and by this (alleged) holder of the disposal right at the time of filing of the application for land registry entry in the land register or at the time of the entry, which it is proposed to effect the proposal if it is proposed in the order of the earlier registration.