The Supreme Court recently addressed the issue of the mutual right of first refusal awarded to the owners of buildings and the owners of the land plot underneath such buildings, respectively, in the event of a transfer of the co-ownership share, with a view to the pertinent amendment to the Civil Code.
In 2014, the Civil Code introduced the principle of superficies solo cedit to Czech law. According to this principle, buildings form an integral part of the land plot on which they stand. Generally speaking, the consequence has been that buildings ceased to be an independent thing in legal terms as they merged with the land underneath them, provided that the building and the land on which it is placed had the same owner.
However, and in distinction to this principle, it commonly occurs in practice that the owner of a land plot is not the same as the owner of the building, in which case it has not been possible to merge the building and the land. For this reason, the lawmaker introduced a number of various priority rights (rights of first refusal) in the Civil Code, with the aim to increase the probability over time that ownership of a given land plot would coincide with the ownership of any buildings on such land, whereupon the above-mentioned principle could do its work.
Among others, the Civil Code introduced a mutual right of first refusal for the owners of land plots and the owners of buildings in cases in which the building does not (yet) form a part of the land plot.
In the recent case, the Supreme Court looked into the situation of what should happen if the owner of a co-ownership share in a land plot or a building divests their share. Until then, an earlier maxim of the Supreme Court applied according to which the mutual right of first refusal of land owner and building owner referred to above should not apply in such a case, because the co-owner’s right of first refusal as codified in Sec. 1124 of the Civil Code (in the wording in force between 01 January 2018 and 30 June 2020) needs to be given preference.
According to the said provision, where a share in real property held in co-ownership was transferred, the various co-owners enjoyed a priority right (unless the transfer was to a person close to the co-owner). Effective as of 01 July 2020, this particular priority right has become however heavily restricted.
With a view to the fact that the scope of co-owners’ priority right has been curtailed quite substantially, the Supreme Court newly concluded that, effective as of, 01 July 2020, the transfer of a co-ownership share in separate real property (i.e., either the land plot or the building thereon) shall be subject to the mutual right of first refusal of building owner and land owner.
Source:
Supreme Court judgment 22 Cdo 3248/2023 of 28 August 2024