The principle that a building does not constitute an independent thing and as such it cannot have an owner who is different from the owner of the land parcel under the building had been applied in the Czech law until 1951, when Act No. 141/1950 Coll. (the so-called intermediate civil code) ceased to observe this principle and introduced a concept under which building were considered independent things and as such capable of having different owners than owner of the land on which it had been erected. Separate ownership of land and buildings had been then transposed into the currently effective Civil Code (Act No. 40/1964 Coll.).
Authors of the New Civil Code (Act No. 89/2012 Coll. – “NCC”) let themselves be inspired by the original pre-1951 regulation (as well as legal regulation of this matter in the majority of European countries) and re-introduced the principle that a building forms a part of the underlying land into the Czech law. The NCC’s Section 506 states that “the space above and below the surface of the land constitutes its parts, [incl.] buildings erected on the land and other facilities (hereinafter the “building”) with the exception of temporary buildings, [but] including that what is sunk into the land or embedded in the walls.”
Transformation of relationships connected with separate ownership of land and buildings from the current regulation to new regulation effective as of 1 January 2014 (pursuant to transitional provisions of the NCC)
Section 3054 of the NCC stipulates that a building, which is not a part of the land erected thereon according the “old” Civil Code, ceases to be an independent thing (as of the date NCC comes into force on 1 January 2014) and becomes a part of that land, assuming that as of that date the ownership to the building and the land belongs to the same person.
If, on that date, the owner of the land remains different from the owner of the building, the land and building will remain separate immovable things and pursuant to Sec 3058(1) of the NCC the building will cease to exist as a separate thing under law only at the moment when the land and the building come into ownership of one owner.
Provisions of Section 1116 of the NCC applicable to joint ownership and of Section 3055(1) imply that Section 3054 applies also to joint ownership and therefore the building becomes an integral part of the land, only if the joint owners of the land will also become joint owners of the building.
In cases of land transfers, with building(s) erected there, which is not subject to recordation in the cadastre [land and building registry] or the so-called “minor” or temporary buildings, or in cases where the cadastre records do not correspond to reality, a situation may arise, when the buyer might be viewed, with regard to the circumstances of the case, to be in good faith that such building does indeed form a part of the land. According to Section 3058 paragraph 2, in such a case the building (not subject to recordation in the cadastre) will cease to be a separate thing from the land there under as of the moment of its effective transfer. The original owner will however have the right, against the seller of the land, to claim compensation in the amount of the price of the building as of the date when his ownership right to it expired. This regulation obviously does not affect buildings, which are not deemed to be a part of the land under NCC, or constitute separate immovable things according to NCC.
The above regime applies only to buildings which are not subject to recordation in the cadastre. Ownership rights to buildings, which are subject to recordation in the cadastre, may be acquired in the event of their transfer via purchase agreement only by recordation in the cadastre (Sec 133(2) of the Civil Code) without regard to the fact whether the building had been, as of the date of purchase agreement execution, recorded in the cadastre or had not, contrary to the law.
Statutory option of the land or building owner
Should the owner of the land be different from the owner of the building on 1 January 2014, both will have statutory first option pursuant to 3056 of the NCC to buy the land or the building; if it is possible that the part of the land with the building erected there may be divided from the rest of the land, without significantly aggravating its use, the option of the building owner will apply only to that part of the land required for the exercise of the ownership rights to the building and not to the entire property, removed from the building by expanse of land. This also implies that the option right may be exercised by individual joint owners of the land or building in cases that these are identical persons.
The above option will constitute a right in rem and according to the newly planned Cadastral Act it will be recorded in the cadastre. In practice this will mean that an owner of the land wishing to sell the same will be obliged to offer the land for purchase at identical terms first to the owner of the building; the offer will need to be made in writing. The same will apply to building owners wishing to divest of their property.
NCC does not contain special regulation of the statutory option rights, however if we take into consideration case law to the currently effective civil code and provisions of Section 10 of the NCC, we may assume that the statutory option rights will be dealt with appropriately to provisions regulating contractual option rights (Sec 2140 at seq). The NCC introduces in these provision new legal terms: person having the option right is called the option holderi and the person who is interest in buying is called the interested buyerii. Option holders are obliged to pay the purchase price as offered within 3 months of the offer being made. If the option holder does not exercise this right, the option right survives against the new owner of the immovable property (land or building). If an interested buyer is aware, or should have been aware, of the option, the contract is concluded with the condition subsequent of exercise of the option by the option holder. Statutory option rights under Section 3056(1) cannot be contractually excluded.
Building(s) erected on several land parcels
In the event a building is erected on several land parcels, then the above rules apply only in relation to the land parcel where the majority of the building had been erected. According to Section 3059 of the NCC, in cases when the building becomes a part of the land, the land where such building continues to overlap will be subject to provisions of Section 1087. An “overlap” is constituted by a minor part of the building overlapping onto the land owned by another.
It is clear that NCC does not unambiguously resolve situations where equal parts of a building are located on different land parcels having separate owners.
The statutory option right of joint owners lasts only until the end of 2014.
According to the currently effective Civil Code, the joint owners have statutory option rights against one another. With regard to the fact that the New Civil Code does not regulate this option right any more (except for certain small details), Section 3062 of the NCC therefore stipulates that option rights according to the “old” civil code expire by passage of one year from the date the New Civil Code enters into force.