The new Civil Code (the “NCC”) brings changes also into the area of period of limitation. Also in this area, the doubled regulation will be cancelled and the period of limitation will be newly regulated in just one act, the NCC.
The unification of the general period of limitation is one of the most significant changes. Currently, the period of limitation is 3 years under the Civil Code and 4 years under the Commercial Code. Newly, the period of limitation will be unified to 3 years from the day when the right could have been exercised for the first time, i.e. from the day when the entitled person became aware of the circumstances decisive for the beginning of the period of limitation or when the person could and should have learnt about them. In case of property rights, the right becomes statute barred after 10 years at the latest unless the statutory regulation sets out a different period. For certain specific cases, the statutory regulation sets out different periods of limitation. These are, for example, right for compensation of damages or right for the recovery of unjust enrichment.
Under the NCC, it is also possible to enter into an agreement regarding the duration of the period of limitation. Thus determined period may not be shorter than one year and longer than 15 years. However, if such period is agreed to the detriment of the weaker party, such arrangement shall be disregarded. If shorter period of limitation is agreed with regard to the right to receive compensation for limitation of liberty, or for prejudice to life or health, or with respect to the right to receive compensation arising from willful breach of obligation, it shall also be disregarded.
The list of rights which cannot become statute barred is newly extended. Except for ownership right, which does not become statute barred even under the current regulation, newly it will be also explicitly set out that the right to claim the division of co-owned thing, the right of establishment of necessary passage and the right to buy-out a real easement cannot become statute barred.
Changes of the period of limitation concern also rights registered in public registers. In this context, we would like to point out the regulation of the period of limitation for rights which are registered in public registers and which can be constantly and repeatedly exercised (newly e.g. lease). Such right becomes statute barred if the right is not exercised for more than 10 years. If a right, which is rarely exercised, is registered in a public register, the entitled person must have the possibility to exercise the right at least three times within the 10 years otherwise such right cannot become statute barred.
Although big changes in the area of period of limitation will become effective on 1 January 2014, these will only apply to periods which will start running after this date. Periods which commenced before 1 January 2014 will remain regulated by current statutory provisions.