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Rights and registration

Rights

What types of holding right over real estate are acknowledged by law in your jurisdiction?

In Denmark, freehold and leasehold are acknowledged as holding rights over real property.

Properties subject to either freehold or leasehold interests may be:

  • traditional real property (a full plot with its unique title number including any buildings thereon);
  • owner-occupied flats or condominiums; or
  • buildings on leased land.

Such properties and the holding rights pertaining thereto are registrable in the Danish land register, which is available and operated digitally. 

Are rights to land and buildings on the land legally separable?

As a rule, it is not possible for a land owner to grant separable rights to the land and to buildings on the land. The land and the building are considered to be one legal entity.

However, it is possible to register a building on leased land on a separate sheet in the land register, provided that the owner of the land is different from the owner of the building (this will be fulfilled in case of a land tenant erecting a building on the leased land). It is a prerequisite for such registration (and for the pledge of the building as security) that the rights to use the land (typically by way of a written ground lease) are established and exist. It is customary that ground lease rights be registered in the land register.

Once the rights to use the land cease to exist (ie, when the ground lease is terminated – whether for breach, convenience or expiry at a pre-agreed date), the ownership rights to the building will (if not removed by the tenant at the end of the lease) pass to the landlord without any consideration being payable. That being said, it may be agreed in the ground lease agreement that consideration for the building should be paid by the landlord at the end of the lease and it will often also be agreed in the ground lease agreement that the landlord may demand the demolition of the building at the cost of the tenant.

Any security rights in the building granted by the tenant during their ownership of the building will not be protected at the end of the ground lease, since the landlord is free to demolish the building without any duty owed to the creditor having been granted security rights by the tenant.

A ground lease tenant may demand registration of their rights under the ground lease in the land register.

Once the land use rights have been established, the owner of a building on the leased land will similarly have a right to demand registration in the land register of their ownership right to the building and the landlord must loyally cooperate in that regard.

Once the registrations are in place, this will provide the basis for the rights to register security rights over the ground lease rights and the ownership rights to the building.

A key issue for any person to whom security is granted over rights under ground leases and buildings on leased land – apart from the remaining (non-terminable) period of the ground lease – is whether the pledgee has any cure and step-in rights, which the landlord is obliged to accept. Under Danish law, a landlord has no obligations towards third parties in terms of cure and step-in rights, but such rights are often agreed in ground leases.

Which parties may hold and exercise rights over real estate? Are there restrictions on foreign ownership of property?

Non-Danish citizens who have not previously been domiciled in Denmark for an aggregate period of at least five years can purchase real property in Denmark only with the permission of the Ministry of Justice. The same goes for companies and associations that are not domiciled in Denmark.

However, EU citizens, citizens of European Economic Area (EEA) countries and EU companies may purchase real property in Denmark without the ministry’s permission where certain requirements are met, but only if the property is intended to serve as a necessary permanent residence for the purchaser, or where the purchase is a prerequisite for operating the purchaser’s own business or supplying services. These more extensive rights follow from Executive Order 764 (18 September 1995).

Holiday residences may be purchased by non-Danish residents only with the permission of the ministry, which rarely grants such permits.

Non-Danish citizens and companies may hold and exercise lease rights over real estate. However, long-term lease agreements may be considered as circumvention of the rules on ownership.

How are rights, encumbrances and other interests over real estate prioritised?

The priority of rights, encumbrances and other interests is set by the time of registration in the Danish land register. 

Registration

Must real estate rights, interests and transactions be registered in your jurisdiction? What are the legal effects of registration?

Real estate rights must be registered in the Danish land register in order to obtain protection against third parties' rights over the same property. The legal effect of the registration is that if the registered holder of the right is acting in good faith in respect of any unregistered conflicting rights of third parties, such registered holder is not obliged to respect the unregistered right and cannot be met with any objections as to the validity of the registered right, except where the land register has become incorrect due to extreme circumstances (eg, submission of forged documents or documents signed under the threat of violence or by persons without legal capacity). 

What are the procedural and documentary requirements for entry into the national real estate register(s)? Can registration be completed electronically?

Electronic registration takes place at the website www.tinglysning.dk, where the rights holder submits an application for title deed. The applicant must have a NemID (a Danish key-card to electronic signature) or have issued a power of attorney to, for example, their lawyer. Persons who do not have a Danish social security number and companies who are not registered in the central business register must issue a power of attorney.

What information is recorded in the national real estate register(s) and to what extent is such information publicly available?

The Danish land register includes information regarding the property, including the size of the area, information about ownership, mortgaging and easements. The land register is publicly accessible at www.tinglysning.dk.

Is there a state guarantee of title?

Registration in the land register is an act of perfection whereby the holder of the right secures their right to the property against other rights.

Where the land register has become incorrect due to extreme circumstances (eg, submission of forged documents or documents signed under the threat of violence or by persons without legal capacity), a person tentatively acquiring a right in good faith and in reliance on the land register and subsequently losing it due to such extreme circumstances is entitled to compensation from the state for not obtaining the right (see Section 31 of the Land Registration Act). 

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