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Calculating unjust enrichment related to buildings on another party’s land

22.03.2019

Calculating unjust enrichment arising from buildings on another party’s land is one of the most challenging tasks facing Czech courts. Among the most pressing questions is whether the amount of unjust enrichment should be based on an expert assessment or an existing price chart. Another key concern is whether to take into account a building’s location in a built-up area.

In a judgment issued on November 29, 2018 (file no. 11 C 147/2011-205), the District Court of Prague 4 summarised the legal situation. The court found that when calculating unjust enrichment arising from buildings on another party’s land, it is vital to consult experts who can assess the standard rent at the given place and time. The fact that the area is already built-up cannot be ignored. The amount of unjust enrichment should reflect the benefit one party has gained from using the other party’s land, i.e. the usual price for such land use at the given time and place (see, for example, Supreme Court judgment file no. 28 Cdo 1466/2013 dated September 4, 2013). Unlike a price chart, an expert assessment can take these circumstances into account. Price charts cannot serve as objective indicators of real estate prices because it is not clear who creates these charts or what prices and methods are used. Courts should therefore base their decisions on expert assessments, with price charts serving only as supplementary evidence.