The European Union has a simple objective of creating a unified European community through increased development and cooperation between the member states, which comprise European countries. Under its Treaty of Union, in article 3, it is provided that the union shall allow free movement of people and capital across borders with the objective of strengthening the Union of the people’s EU member states. In this light, the development of a single market within the EU member’s states has stimulated development and economic growth in these countries. The member states have been guided by the preamble of the Union Treaty, which provides that “to facilitate the free movement of persons, while ensuring the safety and security if their peoples, by establishing an area of freedom, security and justice in accordance with the provision of these Treaty…”and “….desiring to deepen the solidarity between their peoples while respecting their history, their culture and the traditions”. It is this spirit that informed the creation of a single market despite the differences in the structure of each country’s economic organization.
Each country in the EU has its independent legal system through which it develops the rules of administration and governance of its different sectors. The legal system of a country informs its policies and defines the rules of engagement with other countries. This has been a major sticking point under the European community, where countries have different economic policies, as informed by their legal systems. The most affected area has been the area of property market and, particularly, the real property market, which includes the housing market.
The civil law system is based on the reception of Roman law and the establishment of a predictable and standardized model of rights and obligations that are used by courts. Then there is the common law, which is based on the historical decisions of the courts and tribunals and the interpretation of those decisions by judges. The third one is the bijuridical system, which refers to the combination of both the civil law and common law systems. In Europe, the overwhelming majority of the 50 countries use the civil law legal system with the exception of Cyprus, Malta, Ireland, and the UK. Real property law, therefore, enjoys almost similar rules of administration across Europe due to the adoption of the civil law systems in most of the countries (Hovenkamp, Kurtz, & Boyer 2001).
However, the United Kingdom of Great Britain will not sit well with the rest of Europe due to its unique setting, which makes it have different legal rules altogether. The UK comprises one state, four countries, and three jurisdictions. The jurisdictions are England, Wales, Scotland, and Northern Ireland. Each of these jurisdictions has its own courts, trained lawyers, judges, and independent legal systems, although they all rely on the common law legal system. The concept of real property, thus, becomes governed by two legal systems which have differing concepts concerning property. In tracking the development of real property, it becomes clear that it developed through the union and blend of feudal or tribal law on the one hand and Roman law on the other hand. Therefore, under the European Union, most countries have uniform real property law, with the exception of the UK (Bruce, Ely, &Bostick 1989).
The two types of legal systems have different understanding of the concept of ownership. In general, ownership refers to the all inclusive property right. However, under the civil law system, the division of ownership into different ownership rights is not recognized. Similarly, the civil law does not recognize the feudal theory, which is still held under the common law in the UK. Under this theory, only the crown can enjoy ownership in the legal sense of the word, and, thus, legally, the ultimate owner of land is the crown, and all the other owners just hold the land for the crown (Kurtz & Hovenkamp 2003). This holding is, therefore, what is referred to as the estate, and the most common type of estate is the fee simple estate.
Under the English common law, though not in Scotland, there is further distinction between legal and equitable estates and interests in land, which is not recognized under civil law. Under common law, whilst both legal and equitable estates may be registered, in the absence of registration, where they may not have been registered, a fundamental priority rule in favor of the legal estate applies. Legal rights bind the whole world, and equitable rights bind the whole world except those countries where there is a bona fide purchaser for value of a legal estate without notice of the equitable right. This is a fundamental provision of law under common law, and there is need for the civil law legal system to recognize and incorporate such a provision in its body of laws (Cunningham, Stoebuck, & Whitman 1993).
Similarly, another major distinction between the common law property market and the civil law property market is the existence of a trust. The common law recognizes the concept of a trust, while there is no equivalent of a trust under the civil system. Basically, a trust refers to a contract between two individuals for the benefit of a third party. It is the agreement between the owner of a property and the trustee, where the trustee agrees to hold the property of the owner on behalf of the beneficiary (Nelson, Stoebuck, & Whitman 1995). Thus, under the common law, the trustee becomes the legal owner of the property, while the beneficiary holds an equitable interest in the property. Consequently, therefore, this may result in a number of issues where a member of one country wants to buy property in the UK and is not conversant with the trust doctrine, as developed under common law.
This is commonly referred to as the numerous clauses of real rights and provides a critical departure between the common law and civil law legal systems. Numerous clauses essentially mean that the real rights are defined by law, and parties are not free to create the new one by contract. This is the position with which the legal systems under civil laws operate. The difference in common law is that the legal system has not capped the total number of property interest. Common law provides a strict rule about what constitutes a property right. Under the law, a property right is what binds the purchaser of land, an interest is compensable if it is removed or is assignability of the benefit sufficient. Thus, common law provides potential room for the recognition of new rights with in rem status (Hovenkamp, Kurtz, & Boyer 2005). This has then resulted from the recognition or creation of the proprietary estoppels, which basically means that someone who rely on the expectation about a right that is created by another person will become entitled to that right and a right of rectification of a document to make it conform to the preceding agreement among the parties.
In conclusion, the differing legal systems provide different rules, which affect the conduct of business in regards to the property market. The different conceptions in regards to the fundamental concepts of property, thus, result in difficulties in regards to the acquisition of property lawfully and the acquisition of a legal title to property. Similarly, the rules on which legal practitioners rely are different between the two legal systems, and this may also result in problems between the UK and the EU. For instance, under the civil system, it is quite appropriate for a lawyer advising a client on the purchase of land to render similar advice to the seller or the developer of the very property. This is contradiction with the common law system. Therefore, based n the above stated differences, the property market in the UK may not sit well with that of the European Union.