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Sweden > Legal Developments > Law firm and leading lawyer rankings

Editorial

How can you manage a property without an owner?

A good question, raised – but not answered – by a decision of the Göta Court of Appeal from April 2008 in case Ö 799-08, where a housing company was prevented from registering title to property it had acquired following a merger, having failed to complete the formalities within the requisite time period. Since the original owner had ceased to exist – as an automatic legal consequence of the process of merger – the transfer could not be re-executed, and so the property was left without a registered owner.

A legal merger of two companies involves an acquiring company taking over all assets and liabilities of a transferring company, which is dissolved at the exact moment that the merger is registered. This raises an issue where real property is involved, since its transfer requires additional formalities - as in the case in question, where the property comprised certain apartment buildings. The applicable Swedish law requires such transfers to be registered with the local authority within three months. If not - and as happened in this case where the notification was a day too late - the transfer is invalid.

The housing company had appealed to the Court of Appeal on the basis that since the technical legal owner no longer existed, the transfer could not be re-done; and argued too that the local authority had no objection to the housing company being treated as the actual owner. However, the Court of Appeal simply confirmed that the original decision of the local authority was correct, without further discussion or suggestion of how to solve the problems facing the company who is now managing the property. These problems include: who can enter or terminate rental contracts, apply for mortgages, or take responsibility for the property's compliance with environmental laws?

In the absence of legislative or judicial treatment of this issue, the only conclusion to be drawn is that all companies planning a merger and who own rental property must ensure that the legal transfer is notified to the local authority in good time.

Full article in Swedish, by Pernilla Larsson, Lawyer at Gärde Wesslau's Jönköping office

 

www.garde.se

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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