A Co-Owner Using a Thing Beyond Their Share

Co-ownership is the devil's tool, as lawyers like to quip about the frequent disputes between co-owners. In this article I look at a co-owner's overuse of a thing beyond their co-ownership share. When can the other co-owner (or the other co-owners) claim the surrender of unjust enrichment, and when compensation for the restriction of their co-ownership right? And which facts can be decisive in having a claim awarded?

A co-ownership share expresses the extent of a co-owner's participation in forming the common will and in the rights and obligations arising from co-ownership. It is a notional expression of a limited right to the whole thing and to each part of it. A co-owner is not exclusively entitled to deal with the common thing, or its physical parts, at will, which is why a co-ownership share is "ideal" (notional).

At the same time, a co-ownership share is a thing in the legal sense. It is a right of the co-owner which, given the broad concept of a thing in the current law, is a thing in its own right and an object of legal relationships. And it can be dealt with as such; it can, for example, be pledged, used to satisfy creditors in the enforcement of a decision or in enforcement proceedings, and probably even abandoned.[1]

In practice, a situation can arise where one of the co-owners uses the common thing beyond their share. Suppose there are two co-owners of a residential unit. One of them lives in the flat, while the other does not use it at all. The first co-owner pays the second nothing. Does the second co-owner have the right to the surrender of unjust enrichment?[2]

From the case law we know that "where a co-owner uses the common thing beyond their co-ownership share without legal grounds (in particular without a decision of the majority of co-owners, without an agreement of the co-owners, or without a court decision), they are obliged to surrender to the other co-owners what they were enriched by through such use, under the rules on the surrender of unjust enrichment (Section 451 and following of the Civil Code)"[3] (note: now Section 2991 of the Civil Code). Likewise, recent case law states that "where a court regulates the use of a common thing by a constitutive decision that excludes one party from use, it cannot, as a rule, fail to issue a decision on the monetary compensation to be provided until the undivided co-ownership comes to an end".[4]

Overuse of a thing with and without legal grounds

Two situations of a co-owner overusing a thing beyond their share have to be distinguished.[5]

1. Where a co-owner overuses a thing without a decision of the majority of co-owners, without an agreement of the co-owners on how the common thing is to be used, and without a court decision, this is "impermissible overuse". The other co-owner (or the other co-owners) then has a right against the overusing co-owner to the surrender of unjust enrichment under Section 2991 and following of the Civil Code.
2. If one of the grounds mentioned does exist, this is "permissible overuse". The agreement of the co-owners, under which only one of them (or some of them) actually uses the thing, can also be tacit.[6] The co-owner who loses out is then entitled to compensation for the restriction of their co-ownership right under Article 11(4) of the Charter of Fundamental Rights and Freedoms and Section 1117 in conjunction with Section 1122(1) of the Civil Code.

Compensation or surrender of unjust enrichment, isn't it the same thing? No. The limitation period for the surrender of unjust enrichment, for instance, runs under Sections 619, 621, and 638 of the Civil Code.[7] Compensation for "permissible overuse", by contrast, is time-barred under the general period in Sections 619 and 629 of the Civil Code.

Impermissible overuse

With impermissible overuse, though, the questions can be (1) whether one of the co-owners really does use the thing beyond their share, and (2) whether the other co-owner really is excluded from using it.

In general, a situation can arise where, even though only one co-owner uses the thing (for example lives in it), the other co-owner objectively has the chance to share in using it to the extent of their share. The Supreme Court recently dealt with such a situation, where the common thing was a residential unit.[8] A co-owner who actually lives in the unit may, in theory, be using only the part of it that corresponds, in floor area or in quality of use, to their share. The Supreme Court took the view that the mere fact that one co-owner uses the thing and the other does not, does not give the other co-owner a right to the surrender of unjust enrichment against the one who actually uses it. It is therefore necessary to establish the extent to which the co-owner really used the thing. With a residential unit, this means not only its floor area but also the quality of the rooms occupied, having regard to the layout of the unit.[9]

It is also examined whether there were objective obstacles (whether of a technical nature or in the form of factual circumstances created by one of the co-owners) that prevented the other co-owner from using the unit to the extent corresponding to their share.

The burden of proof in a dispute over the surrender of unjust enrichment for impermissible overuse of a co-ownership share

If a co-owner intends to assert the right to the surrender of unjust enrichment, they must reckon with the fact that, as the impoverished party, they bear the burden of proof as to:

• the extent of the other co-owner's "overuse" of the common thing, and, where relevant, also as to
• the technical arrangement of the common thing, or the factual circumstances created by one of the co-owners (the one who actually uses the thing), which prevent the impoverished co-owner from exercising the right to use the common thing to the extent determined by their share.[10]

Conclusion

So what does the Supreme Court's new case law tell us? Before a co-owner embarks on a dispute over unjust enrichment or compensation for a co-owner's overuse of the common thing beyond their share, the basic questions need to be settled:

• To what extent does the other co-owner actually use the thing?
• Are there objective obstacles preventing the co-owner from using the unit to the extent corresponding to their share?
• Is there any agreement between the co-owners on how the thing is to be used?

If you need help settling said question from a qualfied attorney, do not hesitate to reach out to us.

[1] REMEŠ, Jiří. Section 1123 [Dealing with a share]. In: PETROV, Jan, VÝTISK, Michal, BERAN, Vladimír et al. Občanský zákoník (The Civil Code). 2nd edition (2nd update). Prague: C. H. Beck, 2023, marginal no. 3.
[2] Supreme Court judgment of 14 August 2024, ref. no. 28 Cdo 1306/2024-300.
[3] Judgment of the Grand Chamber of the Civil and Commercial Division of the Supreme Court of 10 October 2012, case no. 31 Cdo 503/2011, published under no. 17/2013 of the Collection of Court Decisions and Opinions under ref. R 17/2013 civ.
[4] Supreme Court judgment of 12 March 2024, case no. 22 Cdo 398/2024.
[5] REMEŠ, Jiří. Section 1117 [The co-owner's right and its restriction]. In: PETROV, Jan, VÝTISK, Michal, BERAN, Vladimír et al. Občanský zákoník (The Civil Code). 2nd edition (2nd update). Prague: C. H. Beck, 2023, marginal no. 5.
[6] By agreement, the co-owners can regulate the rights to the thing arising from co-ownership, and a co-owner can thereby even waive their rights.
[7] The subjective limit is therefore 3 years from the day the impoverished party learned of the unjust enrichment and of the person obliged to surrender it. The objective limit is 10 years from the day the unjust enrichment occurred, or 15 years if the unjust enrichment was acquired intentionally.
[8] Supreme Court judgment of 14 August 2024, ref. no. 28 Cdo 1306/2024-300.
[9] E.g. judgment of 7 November 2012, case no. 28 Cdo 2999/2012: use based solely on the floor area is not sufficient for a conclusion as to whether one of the co-owners uses the common immovable thing beyond their co-ownership share, where other circumstances of the case are not taken into account, in particular the quality of the parts of the property used by each co-owner.
[10] Supreme Court judgment of 14 August 2024, ref. no. 28 Cdo 1306/2024-300.