Use of joint ownership assets exceeding ideal share constitutes an unjust enrichment

(Plenary Opinion of the Constitutional Court of the Czech Republic, file no. Pl. ÚS-st. 48/18 from 16 October 2018)

In this case, one of the joint owners used to use the real estate in joint ownership exclusively with his own family. According to the other joint owners’ opinion, such using was exceeding the scope of his ideal share and was interfering with their ideal shares. For this reason, the other joint owners demanded compensation payment of usual value for using such premises corresponding to their ideal shares.

The lower courts assessed differently the character of such exceeding use of joint assets without a legal title and related applicable limitation period. On the one hand, if such exceeding use corresponded to an unjust enrichment claim, the limitation period would have been 2 years. On the other hand, if the exceeding use was assessed as a property claim arising from statutory provisions (pecuniary compensation for using exceeding the ideal share), the limitation period would have been 3 years.

The Constitutional Court held that such joint ownership assets use exceeding the scope corresponding to a particular ideal share without a legal title constitutes unjust enrichment of the joint owner. Therefore, the 2 years’ limitation period shall apply (3 years under the new Civil Code). Further, the Constitutional Court emphasized that assets in joint ownership can be used by co-owners jointly or the scope of the use can be determined by co-owners’ agreement. However, in these cases a legal title for using joint ownership assets exists.