Adverse possession and Conciseness

Adverse possession (Usucapio), as an original legal way of acquiring property was envisaged by the Law of the XII Table (450 BC). The term “usucapio” itself, decomposed into two Latin words – usu and capere – literally means to gain by use.

This legal institute has the same goal since its inception – to eliminate the discrepancy between the factual and legal circumstances-  when a person has a formal right of ownership over an object (eg registered in the cadastral office as the owner of the property), but has no possession over that object, while another person has physical possession over that object, but has no right of ownership.

Article 28 of our Law on Basic Property Relations stipulates that a conscientious and lawful holder of an immovable property, to which another has the right of ownership, acquires the right of ownership over that property through adverse possession after expiration of 10 years (regular Adverse possession), and a conscientious holder of immovable property the to which the other has the right of ownership, acquires the right of ownership over it through adverse possession after expiration of 20 years. ” (extraordinary Adverse possession).

A possession is lawful if based on a valid legal form of acquisition of property rights and if it is not acquired by force, fraud or abuse of trust. The conscientiousness of the possession is presumed, and the conscientious is the holder who does not know or cannot know that the thing he is holding is not his.

The institute of regular Adverse possession is rarely used in practice – thus the condition for regular adverse possession is that the acquirer has a valid legal act for acquiring real estate. Such an acquirer can simply submit a request for registration of his property right to the competent authority on the basis of that document and thus formally become the owner of the real estate. If that document, however, lacks some formal element to be suitable for registration (ceremonial form, for example), then we can put in act the process of regular Adverse possession. On the other hand, in court practice there is a large number of disputes seeking the establishment of property rights, as well as other rights to immovable property through the institute of Adverse possession on the basis of conscientious state, when the acquirer lacks that valid legal basis for acquisition (did not exist or was lost), but has been using the real estate in question for more than 20 years, holding it as his own (extraordinary Adverse possession). The pleader for acquiring property rights by extraordinary Adverse possession in court proceedings will prove that he had an undisturbed state over a certain real estate for a period of more than 20 years, and in doubt that he held it believing that it is his or he does not know or cannot know that the thing he holds is not his.

It is important to note that conscientiousness must be continuous, and that this continuity may be interrupted or stopped at a certain time, under the conditions prescribed by law.

However, although the law prescribes the presumption of conscientiousness, in practice there are different interpretations of the courts that call into question the very meaning of this legal institute. The judgment of the Court of Appeals in Belgrade stated the following: holder of the right, about which the plaintiff could undoubtedly have had in mind the title in the public real estate register, and regardless of the time period (() lack of conscientiousness makes the plaintiff’s request to determine the ownership of the cadastral parcel and register unfounded. (Judgment of the Court of Appeals in Belgrade, Gz 3968/2021 of 2 September 2021).

Therefore, regardless of the appellants’ call that the conscientious holder is the one who believes that he obtained the thing from the owner,” it cannot be considered that this condition was met in the specific case, due to the relevant contract on assignment certified by a court, even though it was concluded in writing, and the acquirer was taken into possession, which could serve to validate the contract if the subject of the transaction was allowed at the time of its conclusion, and which the contracting parties knew ”.” (Judgment of the Court of Appeals in Belgrade , Gz 4606/2020 of 23 December 2020).

In the above examples of court decisions, the institute of conscientiousness, as an important precondition for acquiring property rights is, from our point of view interpreted very strictly. Namely, the court concludes that the acquirer was unscrupulous because he was obliged to (as an legal expert) understand that he did not acquire the property but only the right of use, because the subject of the acquisition was not in circulation.

Can only a legal expert be conscientious then? Our opinion is that every legal layman is conscientious, who justifiably believed that he would acquire ownership of real estate, if he concluded a contract with his predecessor (which is also registered in the public books) on the transfer of the right to use that real estate, or simply owned the real estate and used it for the past 20 years believing it to be his.

We may conclude that Adverse possession, as a very old but still necessary legal instrument for property rights acquiring, is gradually diminishing the importance of this legal institute due to somewhat narrow interpretation of conscientiousness on the one hand, but also by introducing a strict ceremonial form (solemnization) of contracts, on the other hand, and, which is an important lever that “legitimizes” the de facto rights on objects.