SC Grand Chamber indicates possible ways to protect the rights of the owner of a land plot under unauthorised construction

If the title to an unauthorised real estate is registered in favour of a certain person without observing the procedure provided for in Article 376 of the Civil Code of Ukraine, the satisfaction of the claim for cancellation of the decision on the state registration of the title to such real estate, or the claim for cancellation of the state registration of rights, or the claim for termination of the title, etc., in accordance with the procedure established by law, does not resolve the legal status of the unauthorised property and does not restore the unity of the legal status of the land plot and the real estate located thereon.

Therefore, the appropriate claims that the owner of the land plot on which the unauthorised construction was carried out (is being carried out) may file in order to protect the rights to use and dispose of such land plot are a claim for demolition of the unauthorised construction or a claim for recognition of the ownership of the unauthorised construction.

This conclusion was reached by the Grand Chamber of the Supreme Court in a case concerning an application by a city council to terminate the ownership of a property registered in the name of a non-governmental organisation.

The plaintiff based his claims on the violation of his rights as a land plot owner as a result of the legalisation of the unauthorised construction through the unjustified registration of the ownership of the unauthorised construction with a non-governmental organisation. He argued that the disputed property had been built without permission, since no land had been allocated for its construction, no building permit had been issued, the project had not been approved and the person who had built the property without permission had not acquired ownership of it.

The court of first instance held that the plaintiff was entitled to judicial protection of its violated right, in particular by the method chosen by the plaintiff - the termination of the NGO's ownership of the disputed property. Instead, the court of appeal concluded that the requirement to remove obstacles to the use of the land plot by demolishing the unauthorised construction in question pursuant to part 4 of Article 376 of the Civil Code of Ukraine is an appropriate and effective way to protect the rights of the owner of the land plot on which the unauthorised construction was carried out, and that the plaintiff had chosen an inappropriate way to protect his rights.

After considering this case, the Grand Chamber of the Supreme Court noted that in accordance with part 2 of Article 376 of the Civil Code of Ukraine, a person who has carried out or is carrying out unauthorised construction of real estate does not acquire ownership of it.

However, both the person who carried out the unauthorised construction and the owner of the land on which the unauthorised construction was carried out may acquire the unauthorised property. In order to do so, they must follow a clear algorithm of actions provided for in Article 376 of the Civil Code of Ukraine.

In circumstances when the title to an unauthorised real estate is registered in favour of a certain person without observing the procedure provided for in Article 376 of the Civil Code of Ukraine, the satisfaction of the claim for cancellation of the state registrar's decision on the state registration of the title to such real estate, or the claim for cancellation of the state registration of rights, or the claim for termination of the title, etc., in accordance with the procedure established by law, does not resolve the legal status of the unauthorised property and does not restore the unity of the legal status of the land plot and the real estate located thereon.

Therefore, the plaintiff's claim for termination of the NGO's title is not the appropriate remedy because the NGO's title to the disputed property has not arisen (because the disputed property itself has not arisen as an object of title).

As the Grand Chamber of the Supreme Court noted, the possible ways of protecting the rights of the owner of the land plot on which the unauthorised construction was carried out are directly defined by Article 376 of the Civil Code of Ukraine.

If the plaintiff wishes to protect their violated rights resulting from unauthorised construction, they have the right to file a claim with the court in accordance with the provisions of parts 4 or 5 of Article 376 of the Civil Code of Ukraine.

In this case, the plaintiff may file a claim to either recognize their ownership of the disputed real estate (as per part 5 of Article 376 of the Civil Code of Ukraine) or to have the disputed real estate demolished (as per part 4 of Article 376 of the Civil Code of Ukraine).

If one of these requirements is met, the legal status of the unauthorised property (the disputed property) will be determined according to the procedure established by law. At the same time, the state of unity of the legal status of the land plot and the real estate located on it will be restored. Instead, the plaintiff's claim in this case does not provide for the above.

The Resolution of the Grand Chamber of the Supreme Court of 15 November 2023 in case No. 916/1174/22 (proceedings No. 12-39гс23) - https://reyestr.court.gov.ua/Review/115377100.

This and other legal positions of the Supreme Court can be found in the Database of Legal Positions of the Supreme Court - https://lpd.court.gov.ua.