Providing a piece of land with utilities such as water, electricity, gas and telecommunications is not always possible through direct access to the public supply network; often, access via third party property is required.
In practice, investors frequently purchase land for future investments without investigating whether it is connected to the supply networks or whether rights on third party neighbouring property need to be secured. Overlooking these aspects can lead to significant legal problems, including the impossibility of using the acquired property for the investment planned.
Reserving property related rights
In order to secure permanent rights on third party lands in view of installing, operating and maintaining utility supply lines, it is essential to reserve property related rights (easements/ superficies rights) - ideally simultaneously with the purchase of the main land - and to register such in the land book.
Property related rights are deeply connected to the object concerned (land) and have an absolute character. They apply to everyone.
The conclusion of simple agreements (e.g. lease agreements) in the form of private deeds is not sufficient. In general, such contractual obligations are applicable only between the parties drawing up the principal agreement.
As opposed to a lease agreement that can be drawn up as a private document, a contract on reserving property related rights (easements/ superficies rights) requires authentication by a notary. The easement rights for utility supplies are thereafter registered in the land book of both the burdened and beneficiary land, whereas the superficies right is entered solely in the land book of the affected land.
For the conclusion of the contract and the registration of the property related rights in the land book, a cadastral documentation needs to be prepared and approved by the Cadastral Office, so that the land specifically needed for utility supplies is accurately identified.
Property related rights required also for the building permit for utility supplies
Installing utility supply lines generally requires a building permit. According to the law, on of the conditions for obtaining a valid building permit is the existence of a property related right upon the land intended for construction.
Therefore a contract reserving property related rights over third party neighbouring lands, authenticated by a notary, is absolutely necessary also for obtaining the building permit.
Failure to comply with this requirement affects the validity of the building permit, thus triggering legal uncertainty for the investors.
Due Diligence process required before the reservation of property related rights
Before signing contracts, investors should undergo a due diligence process to determine the legal and technical situation of the land needed for utility supply lines. Signing a contract without a due diligence process can be risky.
The due diligence helps to identify the risks directly affecting the land (eg property title) and its use (eg if connection to the public supply network is available and possible).
The investor should conclude the contract for reserving the property related rights (easements/ superficies rights) only after obtaining a satisfactory result of the due diligence.
Before making an investment, buyers should make sure whether the land can be supplied through direct access to the public supply network, or whether utility supply lines shall need to run across third party land. If through third party land, the purchaser must reserve property related rights (easements/ superficies rights) by a contract authenticated by a notary.
Before signing any contract to reserve property related rights, an exhaustive legal and technical verification (due diligence) should take place.