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High-end expertise in real estate transactions and property law

We provide companies and individuals assistance in real estate transactions in addition to other property law issues and disputes. Our services include:

  • Real estate transactions
  • Due diligence
  • Contract drafting
  • Complaints/cases of deficiency
  • Other real estate disputes
  • Expropriation
  • Land consolidation
  • Ground lease
  • Construction
  • Planning and construction
  • Property tax
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Useful insights

Building permit

Building permits are generally required in order to construct a building, carry out extensions, alter the façade, change the use of a building, demolish a structure, construct roads or parking areas, and for certain other measures. Detailed rules on building permits are set out in the Planning and Building Act and its regulations.

Stamp duty

The general rule is that everyone must pay a document duty when registering a document that transfers real property. The duty amounts to 2.5 percent of the property’s value at the time of registration. However, there are a number of exemptions from the obligation to pay document duty.

Property tax

Property tax is a municipal tax that municipalities may decide to introduce. The municipal property tax office is responsible for levying the property tax. In most cases, property tax is paid together with other municipal charges.

Municipalities that have introduced property tax may choose to use the Norwegian Tax Administration’s calculated market value for residential properties or their own calculation method as the basis for determining the property tax. If the municipality uses the Tax Administration’s property values, the residential value from the most recent assessment for wealth and income tax purposes, reduced by a mandatory reduction factor, is used as the basis.

Condominium

A condominium unit is a co-ownership share in a developed property, with an associated exclusive right to use one of several dwellings or other units in the property. Condominium units are created when a residential complex is divided into sections in accordance with the rules of the Condominium Act. Formally, the establishment takes place through the registration of a sectional application. Approval for the subdivision is granted by the municipality.

Expropriation

Expropriation involves the compulsory transfer of ownership rights or other rights pursuant to law. Section 105 of the Constitution provides that full compensation shall be paid in the event of expropriation, thereby presupposing that expropriation may take place. The principle of legality means that expropriation, which may be carried out in favour of both public and private parties, must have a statutory basis. There are a large number of such statutory authorisations for expropriation.

Construction

Construction contracts refer to the construction of buildings or infrastructure. The party commissioning the work is referred to as the employer (building owner), while the party responsible for carrying out the work is referred to as the contractor.

Renovation work in consumer relationships is regulated by the Craftsman Services Act. Agreements for the construction of residential housing between a contractor and a consumer are governed by the Housing Construction Contracts Act.

Otherwise, there are no statutory provisions on construction contracts, but most are entered into in accordance with standard contracts developed by the Norwegian Standards Association. For large construction projects, design-and-build (turnkey) contracts are often concluded.

Right of way

Right of way is the right to pass over another person’s property. Rights of way exist partly as easements and partly as public access rights. When it exists as an easement, its content depends on the legal basis for its creation (e.g. an agreement); for example, it may be a right of way, i.e. the right to drive a car over another person’s property.

Right of first refusal

A right of first refusal is a right of redemption relating to real property or other assets (e.g. shares), which can only be exercised when the assets are disposed of or otherwise change ownership. The right of first refusal may be based on an agreement or on statute. For contractual rights of first refusal, the Act relating to Rights of Redemption provides supplementary rules, but it also contains certain provisions that take precedence over what may have been agreed.

Subletting

Subletting is a tenancy arrangement in which a tenant subleases the premises they have rented. Under the Tenancy Act, subletting may only take place with the landlord’s consent. Subletting of a housing cooperative apartment requires the consent of the board of the housing cooperative.

Land register

The Land Register (Grunnboka) is a property register that records all registered documents relating to real property. It is now a nationwide electronic database in which each cadastral unit, leasehold number, and condominium unit number constitutes a separate register unit.

Acquisitive prescription

Acquisitive prescription (adverse possession) involves the acquisition of ownership or usage rights and the extinguishment of another person’s rights through long-term use in good faith. The rules governing acquisitive prescription are codified in the Act relating to Acquisitive Prescription.

Acquisition by prescription may apply to real property, movable property, and securities. Acquisition of ownership by prescription requires that the possessor has held the property as if it were his or her own (“as owner”, with an intention of ownership) continuously for a prescriptive period of 20 years for real property, and otherwise 10 years.

Prescription is excluded where the use is based on an agreement with the rightful owner (“no one can acquire by prescription in conflict with their own title”). A tenant or borrower will therefore not become the owner even if they believe they are the owner, since there is no circumstance prompting the rightful owner to intervene.

Throughout the entire prescriptive period, the user must have been in good faith, i.e. not known or had reason to believe that their use was unlawful. For prescriptive acquisition of usage rights, which may concern a full right of use (leasehold or tenancy right) or a positive easement, the requirements are similar. However, for easements that are not apparent from “a fixed installation”, the prescriptive period is 50 years, unless it concerns a necessary right of way or storage area. The prescriptive period is also 50 years for acquisition of usage rights for the public within a “wide circle”.

Prescription may be interrupted if the use ceases, if the user loses their good faith, or if the rightful owner initiates legal proceedings before the prescriptive period expires and the claim is upheld.

Upon completed prescription, the possessor acquires a right corresponding to the use. Such acquisition is protected without registration.

The Act on Acquisitive Prescription also contains rules on negative prescription. When a property is used in violation of a specific right (e.g. a field is ploughed so that a right of way can no longer be exercised), the right may lapse if the above conditions for prescription are met.

Legal title

A legal title is the legal basis for a proprietary right. The person who, according to the Land Register, appears as the owner of real property holds registered title as owner. The same applies to limited rights; for example, a person who is registered in the Land Register as a tenant is said to hold registered title as tenant.

The significance of registered title is that, in order to register a document reflecting a voluntary disposition concerning ownership or a limited right, the holder of title must sign the document.

Title document

A title document is a document that evidences a proprietary right, for example a deed. A title document relating to real property may be registered if it establishes, modifies, transfers, encumbers, acknowledges, or extinguishes a right.

Rental

Renting (tenancy) involves the lease of residential accommodation, commercial premises, etc. in exchange for monetary consideration. Tenancy is regulated by the Tenancy Act (the Norwegian Tenancy Act). For tenancy agreements entered into before the Act entered into force on 1 January 2000, certain transitional provisions apply.

Tenancy agreement

A tenancy agreement is an agreement concerning rent. The legislation does not contain any absolute requirement that ordinary tenancy agreements must be in writing, but it follows from the Tenancy Act that the agreement must be made in writing if one of the parties so requests.

Land consolidation

Land consolidation (jordskifte) is a collective term for a range of decisions made by the land consolidation court under the rules of the Land Consolidation Act. Land consolidation may, among other things, involve dissolving real property co-ownership, reorganising property through exchange of land in order to avoid fragmented plots, terminating perpetual usage rights, and implementing joint measures. In connection with land consolidation, the court may also decide disputes concerning boundaries, ownership rights, usage rights, and similar matters.

Municipal plan

A municipal master plan is a local government plan aimed at coordinating the physical, economic, social, and cultural development of a municipality. The rules on municipal master plans are set out in the Planning and Building Act. Municipalities are required by law to carry out continuous municipal planning.

The municipal master plan consists of two parts. The long-term part includes goals for the development of the municipality, guidelines for sectoral planning, and a land-use component for the management of land and other natural resources. The Act contains detailed rules on the land-use component, which must designate different land-use categories. The short-term part of the municipal master plan consists of a coordinated action programme for sectoral activities over the coming years.

Protected landscape area

A protected landscape area is a distinctive or beautiful natural or cultural landscape that is protected under the Nature Conservation Act. In contrast to national parks and nature reserves, a developed area may be designated as a protected landscape area, for example a fishing village with its surroundings.

In a protected landscape area, activities that may significantly alter the nature or character of the landscape are not permitted.

Special landscape area

Agriculture, nature, and outdoor recreation areas are areas where development may be prohibited, but where restrictions cannot be imposed on ordinary agricultural activities. Under the Planning and Building Act, LNF (agriculture, nature, and outdoor recreation) areas shall be designated to the extent necessary in the land-use component of the municipal master plan.

Neighbour law

Neighbour law concerns the private-law relationship between neighbours, see in particular the Neighbour Relations Act (the Norwegian Neighbour Act). The main rule of the Act is that no one may have, do, or initiate anything that is unreasonable or unnecessary and that causes damage or inconvenience (including risk) to a neighbouring property.

Neighbour notification

A neighbour notification is a notice to neighbouring property owners that someone intends to commence planting, excavation, construction, industrial activity, or other measures. When such measures may cause damage or inconvenience to a neighbouring property, neighbour notification is mandatory under the Neighbour Relations Act. Neighbours must be notified within a reasonable time before the measure is initiated.

Rules on neighbour notification are also set out in the Planning and Building Act. Such notification must be given before an application for a building permit is submitted to the municipality. Neighbours and adjoining property owners are then given a two-week deadline to submit any comments to the municipality. However, the municipality may exempt the applicant from providing neighbour notification if the interests of the neighbours and adjoining owners are not affected by the measure.

Zoning plan

A zoning plan is a public detailed plan that regulates the use and protection of land, waterways, sea areas, buildings, and the external environment in specific areas within a municipality. The rules are set out in the Planning and Building Act.

A zoning plan must be prepared where it is stipulated in the land-use component of the municipal master plan that development, etc., may only take place on the basis of a zoning plan, as well as for areas where major construction and engineering works are to be carried out. A building permit under the Planning and Building Act cannot be granted for major construction and engineering works unless a zoning plan has been adopted.

Co-ownership

Co-ownership means that two or more persons own an asset jointly in such a way that each party’s rights are calculated in shares according to fractions or proportions. For example, two persons may own a holiday property together in the ratio 40:60. Such relationships are governed by the Co-Ownership Act, which yields to contrary agreement. Excluded from the Co-Ownership Act are, among other things, the joint ownership formed by an undivided estate, as well as co-ownership between participants in a general partnership (binding co-ownership).

A property law co-ownership may be based, among other things, on agreement and inheritance. In marriage and cohabitation relationships, co-ownership may arise even where the basis is not clearly defined, often where one party’s contribution (in the home or otherwise) is a prerequisite for the acquisition that the other party may formally hold alone (Marriage Act Section 31).

Each co-owner’s physical control over the jointly owned property depends on what has been agreed or assumed at the time of acquisition in accordance with the ownership share. Each owner may, where possible, demand physical division of use. A co-owner may also pledge their share and may transfer it; however, the other co-owner generally has a right of first refusal unless the share is transferred to a close relative. Decisions concerning “management and utilisation” within the scope of normal use may be made by majority vote; otherwise, unanimity is generally required. Expenses and income are, as a starting point, shared according to ownership shares.

The co-ownership may be time-limited or may be terminated when all shares come under one owner. The Act also grants each co-owner the right to demand dissolution, primarily through physical division in accordance with ownership shares. Where this is not possible (e.g. a holiday property cannot be divided) or not lawful (e.g. public approval is not granted), dissolution takes place under the rules on forced sale, for example by public auction.

Easment

An easement is a special right to use or otherwise exercise control over another person’s property. Examples include rights to grazing, hunting, trapping, fishing, passage, car parking, mooring boats, and harvesting timber—these are all so-called positive easements. The opposite are negative easements, which restrict the owner from certain forms of use, for example prohibiting commercial activity or restricting construction to villas only.

Easements are particularly relevant in relation to real property, and the Easements Act applies to such rights. The Act provides general rules on the exercise of easement rights and on the possibility of modifying their use—either in favour of the easement holder or the landowner.

An easement may belong to whoever owns a specific property at any given time (a real easement). Such an easement can only be transferred together with the property. Other easements (personal easements) may, as a general rule, be transferred, but the landowner has a right of first refusal unless the transfer is made to a close relative. Whether an easement is personal or real depends on an interpretation of the basis for its creation, for example the agreement.

Deed

A deed (skjøte) is the document used to transfer real property to a new owner. The new owner obtains registered title to the property in the Land Register.

Registration

Registration (tinglysing) is a registration system for documents, with the effect that the legal right established in the document is protected (legal protection) against third parties. The rules for registering documents relating to real property are set out in the Registration Act (Tinglysingsloven). Registration of documents relating to real property is administered by the Norwegian Mapping Authority (Kartverket).

Ground lease

Ground lease (tomtefeste) is long-term leasing of land for buildings that the tenant (lessee) has or erects on the plot. The owner of the land is called the lessor, while the person who leases the land is called the lessee. Ground lease is regulated by the Ground Lease Act (Tomtefesteloven). However, some older lease agreements are governed by earlier legislation and customary practice.

Eviction

Eviction is equivalent to vacating real property under the rules of the Enforcement Act (Tvangsfullbyrdelsesloven). Eviction requires an enforceable legal basis for enforcement. Such a basis exists, for example, if rent has not been paid and it is stated in the tenancy agreement that this constitutes grounds for eviction. Eviction is carried out by the bailiff (Namsmannen), who removes the persons concerned and the movable property from the premises.

Eviction clause

An eviction clause is a provision in a tenancy agreement stating that the landlord may demand that the premises be vacated if the rent is not paid, or that vacation of the premises may be required when the lease term expires. Such clauses constitute an enforceable legal basis for eviction under the Enforcement Act (Tvangsfullbyrdelsesloven).

Contact
Bjørnar Oust

Bjørnar Oust

Partner

boust@melo.no
+47 480 42 931