As a result of various factors, real property transactions practice shows, it sometimes may occur that one building is situated on the border of two or more adjacent plots of land. Such circumstances may result in legal complications, which make it impossible to conclude such a transaction and sell only one of such plots of land on its own. Answering the question of whether it is possible to sell only one of these plots of land will depend on whether a common or separate land and mortgage registers are kept for the plots of land concerned. It is therefore crucial to establish whether the building was originally erected on a single plot of land, which was subsequently divided, or whether the building was erected on two or more properties, for which separate land and mortgage registers were kept to begin with.
Firstly it is worth defining the meaning of the word building. In its rulings the Supreme Court recognizes a building to be a built structure, permanently attached to the land, constituting a component of the real property (Article 48 of the Civil Code) or an object of ownership separate from the real property (Article 235 § 1 of the Civil Code), separated by means of building partitions and having a foundation and a roof. The problem arises where a building is erected on a real property consisting of two plots of land, for which one land and mortgage register is kept, while the owner intends to sell only one of such plots of land.
The Supreme Court has ruled upon the validity of the transfer of part of a real property in its resolution dated April 26, 2007 No III CZP 27/07, considering that an agreement on transferring ownership of part of a property, while there is no division of the building situated thereon, is not valid. According to the Supreme Court’s well established jurisprudence, the land and mortgage register is the factor distinguishing a property, which is expressed by the rule “one land and mortgage register – one property”. Therefore while considering a real property, on which a building, being its component part, is situated, the legal action consisting of transfer of ownership of one of geodetically distinctive plots of land, shall lead to the division of the real property by separating part of it and thus distinguishing a “new” property. Such a division is only possible should specific prerequisites be met, i.e. the division of the building is allowed only along vertical planes together with the land, provided that as a result of such a division two separate buildings are established, clearly separated from each other by a previously existing or feasible wall.
Failure to perform the building’s division affects the assessment of the entire legal transaction under consideration, as parts of buildings may not constitute separate objects of ownership. Such an outcome would however be achieved, should the legal action of ownership transfer of part of the real property be considered valid, while failing to divide the building situated thereon. As a consequence this would lead to a breach of Article 47 §1 of the Civil code, which is an imperative regulation, stipulating that a component part may not be a separate object of ownership or other rights in rem. Therefore, an agreement on transfer of ownership of a part of a real property, without simultaneously dividing the building located thereon, must be considered invalid.
However, the situation presents itself differently should the land, on which the building is located, consist of two separate real properties, for which separate land and mortgage registers are kept. The Supreme Court has also made a ruling in such circumstances. In its ruling dated February 22, 2012 No IV CSK 278/11 the court found that should the agreement on transfer of ownership of one of adjacent plots of land owned by the same person, but covered by two separate land and mortgage registers, on which a residential building is situated, is not invalid on the grounds that it was concluded without the building being divided. This is due to the fact that in such a case there is no transfer of ownership of a part of the real estate. It is the whole real estate, as covered by the land and mortgage register that is subject to transfer, i.e. a property which, pursuant to Article 155 of the Civil Code, may be subject to transfer of ownership. Furthermore, none of the “parts of the building”, located on both sides of the border of the real estate, meet the requirements necessary to be considered a building within the meaning of civil law. As a result of such an arrangement, without dividing the building, only the person of the owner of the real estate changes, while the current state of affairs does not change, as both the real estate being sold and the real estate remaining the property of the seller, are still covered by structures which, within the borders of each those real properties, do not constitute buildings, as defined by provisions of civil law.
Marta Pałyga
Prawnik | Lawyer
T: +48 22 447 43 00
E: palyga@millercanfield.com
Disclaimer: This publication has been prepared for clients and professional associates of Miller Canfield, and is based on the facts and guidance available at the time of its release which may be subject to change. The purpose of the publication is to draw attention to the legal events indicated in it and should not be the sole basis for any decision regarding a particular course of action; nor should it be relied on as legal advice or regarded as a substitute for detailed advice in individual cases. The services of a competent professional adviser should be obtained in each instance so that the applicability of the relevant legislation or other legal development to the particular facts can be verified.