The deed of declaration of transfer by 'causa mortis'

Abstract

The closest persons to an individual following their demise, many times strive to deal with all the negative phases which are brought about by death. Many relationships, links and sectors which have been involved and present during the lifetime of the deceased aim to bring some form of closure in one way or another. This aspect is also present in the legal field, where the government strives to bring the transferee causa mortis to declare the immovable property or rights over such immovable property, held in the name of the deceased person to pay succession tax. This is achieved through the written instrument by means of a public deed known as the ‘Declaration of Transfer Causa Mortis’ (hereinafter be referred to as the ‘Causa Mortis’). The obligation to enter such a deed stems from Maltese Law, particularly Article 33 of the Duty on Documents and Transfers Act, Chapter 364 (hereinafter referred to as the ‘DDTA’). The wording of the law itself, whether directly or indirectly, provides the reader with a sense of urgency which circulates around the need to make such a declaration. In order to kick start the process, one shall seek a notary public, who amongst other services, is empowered to draw up public deeds and attribute public faith thereto. Thus, the notarial profession plays a crucial role the moment a person has parted ways. In fact, the notarial profession can be described as “… the beacon of legal certainty and security in the most crucial milestones of a private Citizen's life, with regards to the acquiring of property during one's lifetime or following the death of a relative… and ensures fair and impartial solutions, which protect all the parties concerned, thus avoiding painful misunderstandings and costly litigation...” In order to draw up a causa mortis, the notary shall collect information regarding the death of the deceased which includes the date, time and place of death, the determining instrument which shall identify the rightful heirs and the identification of immovable property or rights over such immovable property held in the name of the decujus. Once the notary has compiled all this necessary information, the declaratory deed may then be concluded before a notary. Here, the notary is obliged to publish the declaratory deed, collect the payment of tax due, and have it duly registered. In fact, as shall further be explained in the coming lines of this Professional Report, this deed is purely required to satisfy fiscal obligations. The law dedicates several articles which determine the amount of duty payable on this specific type of deed, including a number of rebates, reductions and exemptions. Some of these are time-barred, in such a way that should the causa mortis not be concluded within the stipulated time period, the amount of duty due increases and interest starts to run, hence the law does not urge the delay of making such a declaration. The process required prior to the publication of the causa mortis, may prove to ironically defeat the purpose of urgency which the law itself primarily envisages. This further heightens the obligations imposed on the transferee causa mortis to set aside the emotional aspect and focus on the legal obligations imposed on them as well as on the notary to conclude both the causa mortis and other ancillary services which may be required. In this Professional Report, the author aims to have a better understanding of what the causa mortis entails and its effects. In doing so, the author intends to highlight the advantages and disadvantages of this written instrument as well as any practical implications which may arise, whilst remarking any change that may be necessary to the law as it stands today, if it is at all needed. The author believes that this research is necessary in order to understand the burdens taken on by the transferee causa mortis as well as the notary following a demise of an individual and reflect on whether such burdens shall be alleviated at such a sensitive period of time. Hence, the author shall also analyse the degree of burden imposed upon the notary and assess the penalties imposed on the notary public in case of default. In carrying out this research, the author aspires to find an answer to the following research questions: A. What are the historical roots of the deed of declaration of transfer causa mortis? B. What is a deed of declaration of transfer causa mortis? and C. What are the obligations imposed upon the notary public in drawing up a deed of declaration of transfer causa mortis? In the author’s opinion, the most appropriate methodology to address the research questions of this Professional Report, necessitates a black-letter approach, by primarily concentrating on the ‘letter of the law’. This desk-based approach involves a comprehensive analysis of the applicable laws concerning the causa mortis and the relative obligations imposed on the notary public. Therefore, in order to be able to address the research questions and achieve the aims and objectives set forth in this Professional Report, the author shall delve into the following primary sources of information, namely; the Code of Organisation and Civil Procedure, Chapter 12, Civil Code, Chapter 16, Notarial Profession and Notarial Archives Act, Chapter 55, Notaries’ Code of Ethics Regulations, Subsidiary Legislation 55.9, Duty on Documents and Transfers Act, Chapter 364, Laws of Malta, and notarial practice in case of a lacunae in the law obtained through exposure and practice to the notarial profession itself. Whilst the black-letter approach yields descriptive results, the effectiveness of the law however cannot merely be ascertained through doctrinal analysis. In view of this, the author shall tackle this Professional Report from an interdisciplinary perspective by also looking into the following secondary sources of information, namely; court judgements, parliamentary debates, notarial guidelines published on the ‘Notaries of Malta’ website, similar thesis and dissertations. Reference is being made to past thesis and dissertations which have focused on topics relatively similar to the research being carried out in this Professional Report. ‘How Far is the Notary Public a Tax Collector?’ submitted by Notary Corazon Mizzi, and ‘The Obligations of the Notary Public under the Income Tax Act, Duty on Documents and Transfers Act and Value Added Tax Act’, submitted by the same Author, have both taken a broad approach in analysing the fiscal duties of the notary public. Whilst both pieces of work have made reference to the causa mortis, it did not constitute the primary focus of their research. This Professional Report will only shed light on the causa mortis as it truly deserves. The Author shall exclude from the scope of this research the following sub-categories; share transfers, trusts and post deed registrations. Without further ado, this Professional Report will be delivered in the following manner: Chapter 1 shall focus on the emergence of today’s causa mortis by making special reference to previous instruments which have now been replaced by this declaratory deed and Chapter 2 shall delve into the notarial obligations in drawing up such a declaratory deed. Finally, the author will complete this Professional Report by providing concluding remarks and suggesting any change, if it is at all needed.