'Fixed notarial charges for homebuyers'

Although the liberalization of the notarial practice in some regards should be extended, in one vital instance it needs to be reversed: the execution of house sales in the private market should not be subject to price competition, among other reasons because it is in the public interest that these are executed carefully. The former chair of the Royal Notarial Association (KNB – Koninklijke Notariële Beroepsorganisatie), Dolf Plaggemars (70), argues this in his PhD thesis, entitled ‘Is de notaris de markt meester?’ (‘Is the notary on top of the market?’). He will be awarded a PhD by the University of Groningen on 16 June 2011.

On Thursday morning 9 June in The Hague, Plaggemars’s thesis was offered to State Secretary of Justice Fred Teeven LLM and the chair of the committee to evaluate the Notaries Act, Fred Hammerstein LLM.

Quality forced out of the market

When notarial charges were liberalized in 1999, notaries did begin to compete on price. Since the average homebuyer is hardly able to assess the quality of a notary, certainly with regard to a deed that for all intents and purposes appears to be ‘standard’, a low price is often the only criterion. The result could very well be that the notary spends less time on the deed, does not check the special stipulations or set out new ones, and thus provides the Land Registry Office with incomplete records. This can have negative consequences: for the buyer, for any overlooked entitled parties and for society, which requires accurate Land Registry Office real estate records. Plaggemars points to the United States as a poor example. Homebuyers in the US are wise to insure themselves against the consequences of mistakes made during real estate transactions. Such title insurance would never have been considered in the Netherlands in the past.

Outdated ideology

It would be in the public interest if a fixed charge were once again introduced – one much higher than the cut-rate prices now sometimes being charged. Plaggemars: ‘No research has been done into how the quality of notarial practice has evolved over the past decade, but it is wrong to think that it has risen thanks to lower prices. That’s completely outdated 1990s ideology that no-one should take seriously any longer.’

Career switching

Even if this segment of the notarial market – which constitutes a percentage of the total turnover of Dutch notaries running into double figures – were to have fixed rates, this does not mean that the rest of the profession cannot be liberalized. Plaggemars is a strong advocate of further liberalization. ‘It’s remarkable that the number of notaries has increased more in the decade prior to liberalization than it did in the subsequent decade without a numerus clausus. It would be good if people from other professions could switch careers and become notaries, with a particular specialization perhaps. That would be good for both the profession and for competition. Notaries should no longer be expected to be knowledgeable about every aspect of the profession. However, there will still always be many notaries with a general practice, just like you still have many family doctors.’

European Union has opened up the market

The notarial market has been opened up further in one regard: the European Court ruled recently that notaries do not hold government authority and thus are allowed to establish their practice anywhere in the European Union. Although Plaggemars does argue in his dissertation that notaries should be considered to hold government authority, he is happy with the consequences of the decision: ‘If a German or Spaniard speaks Dutch, knows Dutch law and meets the appointment requirements, I don’t see why he or she shouldn’t be able to set up practice as a notary in the Netherlands.’

Supervision

To maintain notarial practice quality levels Plaggemars wants more supervision, but he wants it to come from within the profession as well. Government supervision would be too costly, he thinks: ‘You can’t blanket the Netherlands with cameras. However, you can achieve a great deal with cooperation covenants. In addition to conducting supplementary research, the supervisory body can then carry out spot checks of the monitoring taking place, providing a general assessment.’

Curriculum Vitae

A.D. (Dolf) Plaggemars LLM (Wierden, 1940) studied law at the University of Groningen. He is a retired notary and held positions including member of the board and chair of the Royal Notarial Association (KNB – Koninklijke Notariële Beroepsorganisatie), member of the board of the BFT, the supervisory body of the notarial profession, and deputy justice for the Court of Appeal in The Hague. His supervisors were Prof. L.C.A. Verstappen and Prof. H.B. Vedder. His son and daughter will serve as paranymphs.

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