Note of Dispute, Note of Controversy in the Real Estate Registry

Quick Overview

If the land registry contains an entry that does not reflect reality, you can challenge it by filing a note of dispute or a note of controversy. A note of dispute is primarily used when you claim that the registered right never came into existence or was registered incorrectly. A note of dispute is appropriate in a situation where the registered right originally came into existence but circumstances later changed—for example, after withdrawing from a purchase agreement. The note itself does not change ownership, but it protects you by alerting third parties to the dispute. In practice, it is usually necessary to simultaneously file a lawsuit to determine ownership.

Not sure whether to file a notice of dispute, a notice of controversy, or a lawsuit in your case? Have a lawyer assess the situation —in land registry disputes, deadlines, documents, and the precise wording of the petition are often decisive.

Discrepancies in the Land Registry

It may happen that the information in the land registry does not match the actual situation. For example, on the cadastral map, your property line may be shown one meter further to the left, while you’ve spent your whole life believing it’s one meter to the right—and a brick fence has stood there for several decades. Or perhaps you’re aware of this discrepancy because you built a pergola in your garden without a permit last year.

In any case, this discrepancy can cause major problems. In some cases, the situation can be resolved by entering a note in the land registry and taking other legal steps. Let’s take a closer look at this option.

In our legal practice, we often find that people don’t begin to address the problem until they want to sell the property, use it as collateral with a bank, or transfer it within the family. Only then do they realize that the discrepancy in the land registry is not just an “administrative trifle,” but an obstacle that can halt the entire transaction. A common mistake is to wait and rely on the land registry office to correct the entry on its own.

Note in the Land Register

In addition to registration and entries, a note is one of the ways to make entries in the real estate cadastre. It is used to record important information about a property that does not, however, have legal consequences. It is, therefore, a kind of notice that something is happening with the property that could influence decisions regarding legal actions involving it. There are many different types of notes; to correct discrepancies between the Land Registry and the actual state of affairs, “dispute notes” and “controversy notes” are used.

Dispute Note

A “dispute annotation” is applicable in situations where the information regarding a real right to the property recorded in the land registry does not correspond to the actual state of affairs. This refers to situations where a real right was registered in the past, but the actual circumstances have changed, and the information in the land registry no longer reflects reality. This usually occurs when a property has been sold and the contract was subsequently rescinded, or when, following a sale, the change of ownership is not reflected in the land registry,

Example: Ms. Novotná purchased a property from Mr. Král for an agreed-upon purchase price of 5 million crowns. The purchase agreement was signed, and the title was registered in the real estate cadastre, where Ms. Novotná became the official owner of the property. However, after the transfer of ownership, Ms. Novotná discovered that the property had hidden defects and therefore decided to rescind the purchase agreement.

Although the contract was rescinded and the legal effects of this rescission took effect, Ms. Novotná remains registered as the owner of the property in the land registry. This is because rescission of the contract does not automatically result in a change in the land registry—further legal steps are required for that.

If the other party cooperates, a note of dispute is not necessary. It is sufficient to resolve the issue through an out-of-court settlement and a so-called joint declaration regarding the creation, modification, or termination of a right to real property, which is filed with the cadastral office.

However, if the other party is uncooperative and refuses to sign the joint declaration, it is necessary to file a lawsuit with the court to determine ownership and subsequently file a motion to enter a note of dispute in the real estate cadastre. The note itself has no legal consequences (that is the purpose of the lawsuit), but it informs everyone that the real estate is the subject of legal proceedings.

At this stage, it is advisable to have the purchase agreement, the notice of withdrawal from the contract, and the application for the note be reviewed. An error in any one of these documents could result in the Land Registry rejecting the application or unnecessarily weakening your case in court.

Note on Disputed Status

A note of dispute is used in situations where a real right has never been registered in the land registry—for example, when the owner of a property listed in the land registry is not, and has never been, the actual owner.

Along with the note of dispute, you must also file a lawsuit to determine ownership. You have one month from the time you became aware of the error in the land registry to file this lawsuit—the date of the erroneous entry is considered the starting point (since ignorance of the law is no excuse).

In practice, however, if you were not informed of the registration of the real right, you have a three-year period, which began on the date of the erroneous entry. Even in this case, however, it is possible to resolve the situation through a mutual declaration without the need for a note of dispute or a lawsuit to determine ownership.

Time limits are often the biggest problem when it comes to notes of dispute. In specific cases, courts may assess the moment when the owner learned of or could have learned of the erroneous registration differently. Therefore, it is advisable to document when you obtained the land registry extract, who brought the error to your attention, and what steps you subsequently took.

Example: Mr. Dvořák owned a property that he had inherited from his parents. However, an administrative error occurred during the probate proceedings, and the property was mistakenly registered in the land registry under the name of another heir, Mr. Svoboda.

Several years later, Mr. Dvořák noticed that Mr. Svoboda was listed as the owner in the land registry, which did not reflect the actual situation, as Mr. Svoboda had never acquired the property. Mr. Dvořák was therefore not informed of the erroneous entry and only learned of the problem some time after the entry was made in the land registry. Since he was not informed of the entry, he has three years from the date the erroneous entry was made to file a lawsuit to establish ownership.

Action to Determine Ownership

Let’s take a closer look at how the aforementioned action to determine ownership, or declaratory action, works. The purpose of an action to determine ownership is to establish who owns a piece of real property, or to what extent. It is also used in situations where a dispute concerns a property boundary that can be objectively determined.

In such cases, at least one of the parties (the plaintiff or the defendant) must be a person registered in the real estate cadastre. If you’d like to file an action to determine ownership, simply contact us.

How to File a Note

An application to register a note can be sent by mail, delivered in person, sent electronically via email with an electronic signature to the address of the electronic filing office, or sent via a data box. It must be sent to the address of the relevant land registry office (i.e., based on the location of the property).

You can file the application by filling out the official form, which you can find directly on the Land Registry’s website. If the application was originally in paper form but you are submitting it electronically, you must have it converted to electronic form using an authorized conversion service. You can arrange this, for example, at the post office, a government office, or a notary’s office. You must then attach to the form the document on the basis of which the note is to be entered, and, if applicable, a power of attorney.

As soon as the Land Registry receives your application, it will mark the property in question with a seal no later than the following day, indicating that the rights to the property are subject to the change. It will then decide whether to grant the registration or not and remove the seal. If the Land Registry rejects the registration of the annotation, it will notify you of this decision along with the reasons for its decision.

Summary

Discrepancies between the real estate cadastre and the actual legal status can complicate sales, mortgages, building permits, and the transfer of property within a family. If the other party cooperates, a joint declaration and a request to amend the entry often help. If they do not cooperate, it is usually necessary to file a lawsuit to determine ownership and, at the same time, request that a note be entered in the land registry. A “dispute” annotation is typically used when the registered right originally arose but the legal status later changed—for example, after withdrawing from a purchase agreement. A “disputed” annotation is mainly used when you claim that the registered right never arose in the first place or was registered incorrectly. The note itself does not change ownership, but it alerts third parties that a dispute regarding the property is pending. Additionally, with a note of dispute, it is essential to monitor the deadlines; therefore, it is advisable to begin addressing the issue as soon as you discover the erroneous entry.