Acquisitive Prescription

he Civil Code of Ukraine of 16 January 2003 that has become effective as of 1 January 2004, introduced the legal concept of acquisitive prescription or usucapion. Acquisitive prescription is one of the legal grounds to acquire the right of ownership to a thing, including real estate. Though the legal concept of acquisitive prescription has been known for centuries in many countries of the world, it is rather new to the current system of Ukrainian law. It should be noted though that the concept was first introduced by the Land Code of Ukraine of 25 October 2001, but was limited only to land plots. According to article 344 of Civil Code a person who obtained the property in good faith and has openly and uninterruptedly possessed the property for 10 years (with regard to real estate property) or for 5 years (with regard to movable property), obtains the right of ownership to it. Regarding land plots, under article 119 of the Land Code, 15 years is the time period that should expire in order for a person to be entitled to acquire the ownership to a land plot based on acquisitive prescription. Therefore, regarding real estate, the pre scriptive period is 15 years for land and 10 years for other real estate. The following are the criteria a person should meet in order to be entitled to claim the right of ownership upon expiry of the pre scriptive period: A person must have obtained the prop erty in good faith, meaning that a person did not know and could have not known that it obtained the property illegally. A person must openly possess the property. Open possession means that the

fact of possession should be evident to third persons who should have an opportunity to observe it. This does not, however, mean that the owner must specifically inform the others about possession. The possession must be uninterrupted. The law does not contain a definition or explanation of uninterrupted possession. According to the prevailing view, possession is deemed to be uninterrupted if during the term specified by legislation (a) the person has not committed any acts proving that such a person admitted its obligation to return the property; (b) there were no claims against the owner regarding the return of property filed by eligible persons. It is important to emphasize that the right of ownership to real estate based on acquisitive prescription is not obtained auto matically upon expiry of a certain period of time. In order to obtain the right of ownership to a land plot, the claimant should apply to the relevant municipal or state authority, which has the power to dispose of the land plot. In this case the right of ownership to a land plot is transferred according to the gen eral procedure of acquisition of land plots. Regarding non land real estate, the right of ownership to it by acquisitive prescription is granted on the basis of a court ruling. As the right of ownership to both land plots and real estate is subject to state regis tration, the right of ownership to such prop erties arises from the time of state registration of such ownership. There is an important point that must be made regarding acquisitive prescription and land plots. The Land Code of Ukraine does

not provide for acquisitive prescription with regard to legal entities, which means that only an individual can exercise the acquisi tive prescription to a land plot. One of important advantages of acquisi tive prescription is that it gives an opportuni ty to remedy the defects of title to real estate. For example, if a company or an individual acquired real estate in good faith and owns it for a continuous period of time, but has no documentary evidence of its right of owner ship, it can resort to acquisitive prescription as a tool to formalize its title. There is another practical aspect regard ing acquisitive prescription, particularly land plots. The buyers of state and municipal land plots start facing difficulties connected with the de facto owners and users of land plots claiming their title to the property on the basis of acquisitive prescription. The conflicts between the buyers and the de facto owners may seriously complicate the process of pur chase or privatization of land plots. Though the relevant administrative and court practice is very limited, there have already been cases when the municipal authorities resolved to provide the land plot into ownership but then had to refuse to issue the respective state acts on right of ownership because of claims on the basis of acquisitive prescription filed by the third parties in court. Therefore, it may be advisable for buyers of land plots to check such an additional aspect of land as possible third party rights based on acquisitive pre scription, prior to commencement of land purchase. By Roman N. Kostenko Shevchenko Didkovskiy & Partners (Kiev)

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The Ukrainian Journal of Business Law

No.9 vol.2 2004