Co-ownership is a tool of the devil - this is how lawyers gloss the frequent disputes between co-owners. In this article I deal with the overuse of a thing by a co-owner beyond his/her co-ownership share. When can the other co-owner (the other co-owners) claim for unjust enrichment, and when for compensation for the limitation of the co-ownership right? And what facts may be crucial for the award of the claim?
The co-ownership share expresses the degree of participation of the co-owner in the creation of the common will and in the rights and obligations arising from the co-ownership. It is a notional expression of the limited right to the whole thing and to each part of it. The co-owner is not exclusively entitled to arbitrary dispositions of the common property or its real parts - that is why the co-ownership share is "ideal".
A co-ownership share is also a thing in the legal sense. It is a right of a co-owner, which, due to the broad concept of a thing in the current legislation, is a separate thing, the subject of legal relations. And it can be disposed of in this way; it can, for example, be seized, it can be used to satisfy creditors in the course of enforcement or execution, and it can probably be abandoned.[1]
In practice, a situation may arise where one of the co-owners uses the common property in excess of his/her share. Suppose there are two co-owners of a residential unit. One of them lives in the flat and the other does not use the flat at all. The first co-owner pays nothing to the other. Does the other co-owner have the right to recover the unjust enrichment?[2]
From case law we know that “If a co-owner, without legal grounds (in particular without the decision of the majority of co-owners, without the agreement of the co-owners, or without a court decision), uses the jointly owned thing beyond their co-ownership share, they are obliged to return the benefit thus obtained to the other co-owners according to the rules on unjust enrichment (§ 451 et seq. of the Civil Code)”[3] (note: today § 2991 of the Civil Code). Likewise, recent case law states that “if the court regulates the use of jointly owned property by excluding one participant from its use through a constitutive decision, it should, in principle, not omit issuing a decision on monetary compensation, which shall be provided until the termination of co-ownership.”[4]
Use of Property on the Basis of a Legal Ground and Without a Legal Ground
A distinction must be made between two situations of overuse by a co-owner beyond his share.[5]
1) If the co-owner overuses the property without a decision of the majority of the co-owners, without an agreement of the co-owners on the manner of use of the common property and without a court decision, it is "unauthorised overuse". Then the other co-owner (the other co-owners) is entitled to claim unjust enrichment against the overusing co-owner according to § 2991 et seq.
2) If any of the aforementioned reasons exist, it will constitute “permissible overuse.” An agreement among co-owners, according to which only one (or some) of them actually use the thing, may also be implied (tacit).[6] The co-owner whose rights have been curtailed 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 § 1117 in conjunction with § 1122(1) of the Civil Code.
Is compensation the same as the return of unjust enrichment? It is not. For example, the limitation period for the return of unjust enrichment is governed by §§ 619, 621, and 638 of the Civil Code.[7] In contrast, compensation for “permissible overuse” is subject to the general limitation period under §§ 619 and 629 of the Civil Code.
Unauthorised Overuse
However, the issues in the case of unauthorised overuse may be (1) whether one of the co-owners actually uses the thing beyond his share, and (2) whether the other co-owner is actually excluded from using the thing.
In general, a situation may arise where, even though a thing (e.g., an apartment) is used by only one co-owner, the other co-owner objectively has the possibility to use it within the scope of their share. Such a situation, where the jointly owned thing was a residential unit, was recently addressed by the Supreme Court.[8] A co-owner who actually resides in the unit may, in theory, be using only that part of it which, in terms of area or quality of use, corresponds to their co-ownership share. The Supreme Court concluded that the mere fact that one co-owner uses the property and the other does not does not in itself establish the latter’s right to the return of unjust enrichment from the one who actually uses the thing. It is therefore necessary to determine to what extent the co-owner actually used the property. In the case of a residential unit, this includes not only the area but also the quality of the occupied spaces, with regard to the layout of the unit.[9]
It is also ascertained whether there were objective obstacles (whether of a technical nature or in the form of factual conditions created by one of the co-owners) which prevented the other co-owner from using the unit to the extent of his share.
Burden of Proof in a Dispute over the Recovery of Unjust Enrichment for the Unauthorised Overuse of Share in Property
If a co-owner intends to assert right to the recovery of unjust enrichment, he must take into account that, as the impoverished party, he bears the burden of proof with regard to
- the extent of the "overuse" of the common property by the other co-owner, and, if applicable, regarding
- technical arrangement of the common property or the factual conditions created by one of the co-owners (the actual user of the property) which do not allow the impoverished co-owner to exercise the right to use the common property to the extent determined by his/her share.[10]
Conclusion
So what does the new Supreme Court case law imply? Before a co-owner embarks on a dispute over unjust enrichment or compensation for the co-owner's use of the common property beyond his or her share, it is necessary to be clear about the basic issues:
[1] REMEŠ, Jiří. § 1123 [Disposition of a Share]. In: PETROV, Jan, VÝTISK, Michal, BERAN, Vladimír et al. Civil Code. 2nd edition (2nd update). Prague: C. H. Beck, 2023, margin no. 3.
[2] Judgment of the Supreme Court of 14 August 2024, File 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, designated as R 17/2013 civ.
[4] Judgment of the Supreme Court of 12. 3. 2024, File No. 22 Cdo 398/2024.
[5] REMEŠ, Jiří. § 1117 [Coowner's right and its limits]. In: PETROV, Jan, VÝTISK, Michal, BERAN, Vladimír a kol. Občanský zákoník. 2nd ed. (2nd update). Prague: C. H. Beck, 2023, marg. č. 5.
[6] By agreement, the co-owners may adjust their rights to the property arising from the co-ownership and the co-owner may also waive his/her rights.
[7] The subjective time limit is therefore 3 years from the date on which the impoverished person became aware of the unjust enrichment and the person obliged to pay it. The objective time limit is 10 years from the date on which the unjust enrichment occurred, or 15 years if the unjust enrichment was acquired intentionally.
[8] Judgment of the Supreme Court of 14 August 2024, File No. 28 Cdo 1306/2024-300.
[9] Cf. judgment of 7 November 2012, Case No. 28 Cdo 2999/2012: It is not sufficient to conclude whether a co-owner uses a common immovable property beyond his/her co-ownership share only on the basis of the floor area if other circumstances of the case, in particular the quality of the parts of the property used by the co-owner, are not taken into account.
[10] Judgment of the Supreme Court of 14 August 2024, File No. 28 Cdo 1306/2024-300.
