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Failure to Remove an Unauthorised Structure Built in Bad Faith

01.08.2019

In a decision handed down on 29 April 2019 (file no. 22 Cdo 185/2019), the Czech Supreme Court commented on the failure to remove unauthorised buildings that were constructed in bad faith. According to the court, even in cases where a structure was knowingly built in bad faith, a court may nevertheless choose not to order its removal. The reason for this is that the conditions for application of section 135c (3) of the Civil Code are somewhat vague, and the court may, for example, take into account the costs of building a replacement structure. In the case at hand, those costs would have included the rerouting of a pipeline used by third parties, possibly resulting in the removal of several hundred-year-old trees. It was, thus, essential to examine not only the costs of removing the building but also the environmental importance of the trees by obtaining the input of an environmental protection agency.

In such a scenario, the preservation of the building (and creation of a corresponding easement) must be reflected in a compensation payment. If the entity that built the structure knew or should have known about its lack of legal title to undertake the construction, this legal defect must always be taken into account. The standard remedy would be to order the demolition of the building. In exceptional cases, however, where a court does not order such removal and creates a corresponding easement enabling the preservation of the structure on another entity’s land, this should be accompanied by the award of compensation. Given the fault on the side of the builder, the compensation must exceed the standard amount payable for contractual easements in similar circumstances. Furthermore, just as in the case of structures built in good faith, the compensation must also reflect the loss sustained by the landowner. A party that built an unauthorised structure on someone else’s land must never profit from its actions by paying only the amount that would have been due from a contractually authorised builder. The compensation should, thus, be determined by a court, and an expert assessment will merely be the starting point for its deliberations.

Of course, there may be circumstances where it is impossible to determine the standard price payable for the contractual creation of an easement. There may, for example, be no information available about similar easements created at the given place and time. Even in these cases, however, the amount of compensation should be determined on objective grounds. Here the compensation due to the landowner in an expropriation scenario may be a starting point. Given the fault on the side of the builder, such compensation would need to be increased, perhaps even significantly. If, for example, the builder erected the structure despite protests from the landowner, the amount of compensation may even be multiplied.

Legal relations arising from unauthorised construction occurring before 1 January 2014, i.e. before the Act no. 89/2012 Coll., the Civil Code took effect, continue to be governed by the earlier legislation, i.e. by section 135c of the Civil Code, Act no. 40/1964 Coll.