Could the EU 'house grab' law be applied to UK homes?

Published 04th Dec 2009

British citizens could have their homes snatched from them on the orders of a European court under a new Brussels power grab.

Plans for an EU shake-up of inheritance law will leave homeowners vulnerable to the potential loss of their property if it was ever owned by someone with relatives abroad.

Most European countries force citizens to leave a proportion of their estate to certain relatives, known as 'forced heirs'.

Under 'clawback' procedures outlawed in England forced heirs can undo property sales up to 30 years earlier if the deceased did not make adequate provision for his relatives in their will.

That means the relatives in France, Germany or Spain could stake a claim to property which has since been purchased by someone else in Britain.

Experts have warned that British citizens could lose their homes or be forced to pay hundreds of thousands of pounds to the foreign relatives of previous owners.

And the new Europe-wide laws could drive up the cost of buying a house because people would be forced to buy insurance to prevent them losing out if they fall foul of future land grab claims.

At the moment properties and land are always distributed according to English law.

A proposed EU regulation, which the Ministry of Justice is considering signing up to, would mean that legal cases affecting British properties would be heard in the country where the deceased was 'habitually resident'.

That would leave British courts powerless to overturn rulings made by courts elsewhere in Europe, where 12 countries have clawback rules.

Justice Secretary Jack Straw has just closed a month long consultation on whether to sign up to the new rules.

But even an independent expert commissioned to look at the plans by the Ministry of Justice has written a report slamming the proposals.

Prof Roderick Paisley of the University of Aberdeen warned that if the regulation is introduced the possibility of clawback would undermine property rights in the UK.

‘The Regulation would force courts in the UK to recognise clawback under the law of other Member States in relation to cross-border successions,’ he wrote.

‘The difficulty with this is that gifts made validly under domestic law, which people expect to be subject to domestic law, could be invalidated by foreign courts. This would represent an interference with UK property law.’

He warned that ‘considerable cost’ would be added to buying a home. ‘In many cases a solicitor will feel obliged to obtain a legal opinion from an experienced foreign lawyer.

'Alternatively, a practice may develop of taking out an insurance based title indemnity policy for each transaction.’

Shadow Justice Secretary, Dominic Grieve said: ‘It beggars belief that Ministers are considering signing up to rules which would create such uncertainty in the property
market and could even see British families lose their homes as a result of legal cases overseas involving people they have never known and in which they might not be represented.

‘The Government's own advisers say that this rule could “blight” properties and add considerable costs to moving home, so we should not hesitate to reject it.’

A Ministry of Justice spokesman said: ‘The Government supports the principle of simplification of succession laws in the EU.

‘Whilst we welcome their publication, we are aware there are some potentially problematical issues within the EU Commission's proposals and we are now considering and consulting on those and indeed the whole proposal.

‘The whole proposal will now be negotiated amongst all EU Members and the European Parliament. The consultation closed yesterday. The Government's response will be published in due course.’

Source: ' Daily Mail '

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