International Real Estate – Denmark – Anders Stig Vestergaard

It is my opinion that I differ in the provision of real estate legal advice in my jurisdiction among other things in the following way.

I recommend to my clients that we first prepare a legal assessment of the case and the client’s intended wishes for the case. The legal assessment includes an assessment of the terms of the agreement, basis of liability, disclaimers, etc, proper defendant, jurisdiction, statute of limitations as well as my conclusion and recommendation.

The legal assessment provides a good overview and an excellent basis for discussing and agreeing on the next steps in the case.

My written legal assessment is usually followed up with a conference call, wherein I explain my legal assessment, conclusion and recommendation and answer questions.

On the basis of our telephone conference or the written legal assessment, we agree on the next step and how to proceed.

In comparison, it is not uncommon to proceed with a case and issue a summons, etc, without first preparing a thorough legal assessment first.

In my experience, the provision of real estate advice may differ significantly on an international or transnational scale in the following way.

In Denmark, we can complete the registration of the transfer of the property efficiently and within a few days. In practice, this means that the deed can be drawn up and notified, and the transfer registered, within a few days of the parties entering into the agreement.

This is primarily due to the fact that the parties can sign digitally, and this can already be agreed upon in the purchase agreement that the parties use “NEM-ID” for signing Land Registry Court expeditions.

In practice, this results in the following efficient approach. We prepare a draft deed and send it to the parties for comments. Once the draft deed is approved by both parties, we prepare the deed for digital signing by the parties at the Land Registry Court.

We ask the parties to sign the deed digitally online, and at the same time we send instructions on how to sign online.

Each party must log in to the Land Registry Court, where the documents are ready to be signed. The party signs the deed using their “NEM-ID”. It takes a maximum of 10 minutes to sign the deed from your own PC. Once the party has signed the deed, a message is automatically sent to the undersigned that the deed has been signed by this party, and subsequently the transfer is registered after we can complete the transfer.

It is a condition for using this efficient method that the party has “NEM-ID”. To obtain “NEM-ID”, the party must have a Danish personal identity number and be / have been resident in Denmark. If this is not the case, is not possible to use “NEM-ID”, and the party is thus excluded from using digital land registration.

In my experience, when it comes to international transactions, where the use of “NEM-ID” is excluded, it can take up to several months for the transfer to be registered without remarks and finally completed.

In this case, the following old-fashioned procedure must be used. The Land Registration Court in Denmark requires to receive the original documents in signed form.

This means that the original documents must be send by post to the party, who must sign the documents and send the signed original documents by post back to my office.

Once we receive the signed documents by post, we review them for errors, bearing in mind that the Land Registry has a zero error tolerance. If there are errors, including errors in the completion of the document, we need to send new documents to the party. If there are no errors, we send the original documents to the Land Registry Court by post.

The Land Registry Court processing is slow. Furthermore, sending documents by post is a protracted process, and there is a significant risk that documents will be delayed or not arrive at all. In addition, the legal costs will be higher.

In order to avoid this procedure, I recommend that my clients authorise me to sign, etc, on their behalf. The registration power of attorney authorises me to carry out all transactions in connection with the registration, including issuing and notifying the deed as well as signing it.

This means that I can digitally sign the deed on behalf of my client using “NEM-ID”, and by doing so, the registration is completed efficiently and quickly – and we avoid the risk of delay or loss in the post and the slow, manual case management at The Land Registration Court.

The Ministry of Justice’s administration of the following law has apparently been relaxed in the last years. This means that the requirements for residence and affiliation with Denmark, as well as the underlying documentation, are slightly more lenient than before. The law says the following:

“The Acquisition Act allows individuals who do not reside in Denmark and who have not previously resided in this country for a total period of 5 years to purchase vacation homes and similar properties here, only with the permission of the Minister of Justice.”

I regularly receive inquiries from citizens of other EU countries requesting legal assistance for purchasing a property in Denmark.
Some of the inquiries are about purchasing a year-round home in Denmark for private or business use, and a few others are about purchasing a holiday house in Denmark.

The slightly relaxed administration of the said law means that it provides better opportunities to purchase vacation homes in Denmark for other EU citizens; this is provided that we submit a proper application and enclosure, and that certain conditions are met.

To summarise, it is my legal assessment that obtaining permission to buy a summer house / a property in Denmark will become slightly easier in the future, taking into account the administration of the law by the Ministry of Justice.

I write articles on legal advice regarding real estate, as well as on business counselling.

Furthermore, I regularly attend international webinars in addition to further training courses.

I notice that there is the Property Tax Bill Proposal. This law proposal pertains to property value tax and real estate. It establishes rules regarding when property value tax should be paid, and which properties are exempt.

This law will impact the market and my legal advice to clients in connection with the purchase/sale of real estate.