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PROPERTY LAW
Types of ownership
Freehold
Ownership
• Ownership is not defined by Law. The owner of a property
has the right to use, receive the benefits of, and dispose of a
property in the most absolute manner, subject only to a non-
prohibited use.
• It is no validity requirement to register rights over real
property with the Land Register, and thus an agreement
is enforceable inter partes without registration. Any title,
transfer or change on the ownership right must be registered
on the local Land Registry in order to be protected against
third party rights over the property. Most rights are registered.
• Apartment houses may be registered as one or several
individual properties in the Land Registry, each with its own
right of ownership. Membership of the owners’ association is
mandatory. The association is an administrative body which
main role is to manage common areas and facilities. Each
owner has a right to use the common areas.
Cooperative Housing Associations
• Cooperative housing associations is defined by Law
(Cooperative Housing Association Act), which applies to
properties meant for all-year residence consisting of more
than two housing units.
• The cooperative housing association consists of a number
of cooperative shareholders each holding an owner’s share
certificate. The owner’s share certificate holds an exclusive
right to use a specific housing unit in the property. The
ownership of the entire property lies with the cooperative
housing association (the cooperative shareholders).
• The division of the property is set-up and described in
regulations which identify each unit with a number, indicates
its location and includes a description of the private and
common areas.
• Each cooperative shareholder has a right to use the common
areas and they share the related service charges. Typically
each cooperative shareholder also has a right to vote in
common matters, as well as a right of a proportional share of
the association’s assets.
Leasehold
Commercial leases
• According to the Danish Business Lease Act the tenant has
certain mandatory rights secured by Law.
• Basic rights of a tenant are protected against third parties by
statute and do not require registration. Agreed terms which
provide the tenant with better rights can be secured against
third party rights by registration with the Land Registry.
• The tenant enjoys a right which may be mortgaged (although
not registered), and in some cases transferred.
Residential leases
• Residential leases are strictly regulated in Denmark.
According to the Danish Residential Lease Law the tenant has
a large number of mandatory rights secured by statute.
• Basic rights of a tenant are protected against third parties by
statute and do not require registration. Agreed terms which
provide the tenant with better rights can be secured against
third party rights by registration with the Land Registry.
• It is very difficult to terminate a residential lease in Denmark
besides in case of breach of contract.
Rights affecting ownership
Easement
• is a burden imposed upon a property, for the use and utility of
another property (its owner and/or users) or other persons.
As an attribute of the right of ownership, easements are
transferred with the related property.
• Is exercised to the detriment of the property assets which
they encumber – servient land – and to the benefit of
adjoining assets which they enhance – dominant land.
• While the owner of a dominant land may, at its expense, carry
out any work required to use or to preserve the easement, it
is not entitled to do anything to aggravate the situation of the
servient land; the owner of the servient land must allow the
easement to be exercised without doing anything to restrict it.
• No strict limits applies as to what may be agreed in a
document registered as an easement. Some formal limitations
must be observed; real property transactions need to adhere
to the so-called unity principle, under which it is illegal to
dispose over part of a real property without formal division
of said property prior to disposal. Only a whole unit can be
transferred, and if one would like to sell part of a property, the
property must be formally divided with the National Survey
and Cadastre (if possible). To avoid circumvention of this
rule, it has also been outlawed to establish rights of use for
a part of a real property for a period of more than 30 years.
This prohibition does not apply for the lease of buildings,
however. Also, to avoid interference with public plans for land
development, easements governing matters which may also
be governed by local plans require approval from the local
municipality prior to registration with the Land Registry.
• Must be registered in the Land Registry to be protected
against third party rights. Registration fee is DKK 1,660.
Mortgage
• A mortgage over a property in question is one (and the
prevailing) method of securing a property loan and must be
registered with the Land Registry to be protected against third
party rights over the property.
• Entitles the lender to a preferential right over other creditors
in the event of a forced sale of the relevant property as the
mortgagees are covered in order of priority.
• The fee for registration of mortgages amounts to DKK 1,660
plus 1.5 % of the principal amount. If there is an existing
mortgage registered (regarding the seller’s loans) the variable
part of the fee may be lower or even inapplicable.
• In general any property in Denmark may be mortgaged and
there is no limit on the number of mortgages that may be
created over the same property.
Preferential claims and local planning
• Tax authorities, insurance companies, lessees, and in some
cases utility suppliers may have third party protected
rights over the real property for which a tax, fire insurance
premium, lessee’s claims, or utility bill is outstanding without
registration. Such claims are enforceable through forced sales.
• Furthermore, the local planning regulation is applicable and
enforceable against property owners regardless of registration
with the Land Registry.
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Investors Guide to Europe 2015