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Extinctive prescription in case of possession in bad faith: the former owner may reclaim the property on the basis of tort

Extinctive prescription in case of possession in bad faith: the former owner may reclaim the property on the basis of tort

05.04.2017 NL law

On 24 February 2017, the Dutch Supreme Court delivered a judgment (ECLI:NL:HR:2017:309) regarding acquisition of ownership of immovable objects by means of extinctive prescription (bevrijdende verjaring). Under Dutch law, a possessor who possesses an immovable that is not his property, becomes the owner of that good after a period of ten years of uninterrupted possession in good faith (art. 3:99 DCC).

The possessor will in any case obtain the property after a statutory limitation period of, in principle, twenty years. Uninterrupted possession is not required, nor is good faith, but the possessor must hold the property in possession at the moment on which the twenty-year period expires. The Supreme Court judgment concerns the requirements for possession of an immovable object, as well as the possible legal actions that the former owner could take against the possessor in bad faith who obtained ownership by means of extinctive possession.

Background of the case

The case concerned a parcel of woodland that was owned by the municipality of Heusden (claimant). The parcel bordered another parcel, which was owned by the defendants. At some point in time, the defendants fenced off part of the parcel bordering on their own parcel. This part was only accessible through a gate which was locked by the defendants. The defendants requested a declaratory decision that they had lawfully obtained the ownership of the parcel due to extinctive prescription. The claimant denied the claim and filed a counterclaim for the eviction of the defendants and a prohibition against them using or entering the parcel again.

Preliminary ruling

The court of first instance rejected the defendant's claims and allowed the claims of the claimant. The Court of Appeal of 's-Hertogenbosch reversed this judgment, thereby allowing defendant's claims and rejecting the claimant's claims. The Court of Appeal ruled that the defendants had fenced off and gated the parcel. They had also kept the parcel in good repair, and built two cabins as well as a boules playing area and a wood yard on it. The Court of Appeal decided that the acts of the defendants qualified as exercising actual power by pretending to be the owner. Because these actions were public, and thereby apparent to the claimant, they qualified as 'possession' and could be invoked vis-à-vis the claimant. According to the Court of Appeal, actual knowledge by the owner of the possessory acts by the possessor is not required for the limitation period starting to run. For the requirements of prescription to be met, it was sufficient that a possible inspection by the claimant would have made it clear that the defendant had taken possession of the parcel.

Supreme Court judgment

 

The municipality appealed to the Supreme Court. The Supreme Court reiterated the general doctrine regarding possession: possession must be unambiguous and outwardly apparent. Possession must also be examined on the basis of the apparent facts regarding whether or not the possessor claims to be the owner. In addition, the Supreme Court stated that it is not required for the owner to have actual knowledge of the possessory acts. The fact that the case involved parcels that were not easily accessible did not change these The appeal by the municipality was dismissed by the Supreme Court, confirming the Court of Appeal's judgment.

The Supreme Court could have stopped here. However, the Supreme Court obiter dictum stated the following. As a rule, the possessor, whether or not in good faith, becomes the owner of the parcel after the limitation period of twenty years has expired (art. 3:105 jo. art. 3:306 DCC). This limitation period is related to the (former) owner's right to file an action to terminate an unlawful situation. The extinctive prescription is based on the idea that the rights will eventually connect to the facts, which improves legal certainty. However, the Supreme Court also noted the acquisition of ownership by the possessor in bad faith does not preclude the former owner from filing a counterclaim on the basis of tort (art. 6:162 DCC). After all, a person who takes possession of goods and holds it, while knowing that someone else is the owner, acts unlawfully towards that owner. When the other requirements for liability have been met, the claimant may, as a form of compensation for the harm done, claim back the parcel in kind instead of filing for monetary compensation ( 6:103 DCC). The Supreme Court further stated that the counterclaim of the former owner is subject to a limitation period of five years (art. 3:310 (1) DCC), which starts to run at the moment on which the former owner becomes aware of his loss of ownership. The argument that it was the former owner's own fault that he lost his property because he failed to regularly investigate the parcel, will generally fail. The Supreme Court considers that a landowner cannot be expected to check his parcels periodically for infringement of possession when there is no specific reason to, particularly if these parcels are difficult to access.

Conclusion

The Supreme Court judgment confirms the requirements for possession of immovable objects and makes clear that actual knowledge by the owner of possessory acts with regard to his property, is not required for the limitation period starting to run. Furthermore, the Supreme Court underlines that owners who have lost ownership of their good due to extinctive prescription by a possessor in bad faith, may reclaim ownership of that good when the requirements of liability in tort have been met.

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