Disputes regarding the possibility of recovery of property (dwelling premises) from good-faith acquirers mainly arise when such property is being sold by a person who has no right to sell it. Correspondingly, if a dwelling premise was received by its current possessor not from its proper owner (in such cases a public authority), the latter may recover it from another’s illegal possession (Art 301, Civil Code). This relates to public authorities in their capacity as owners.
The review contains a set of examples from court practice as regards the most important and typical categories of disputes.
The most sensitive issue is perhaps that of standards of good faith applicable to the acquirer. On this issue the Supreme Court gave the following opinion: when resolving the question of whether the acquirer of a dwelling premise was scrupulous (i.e. acting in good faith) or not, regard must be had not only to his knowledge of the existence in the Unified State Register of Property Rights of an entry with respect to the right of ownership of the seller, but also to the question whether a reasonable prudence was shown by the acquirer when concluding the transaction and which measures he took for examining the rights of the seller. In so doing, courts should investigate the issues as to whether the dwelling premise was acquired for consideration, whether there are encumbrances, including sequestration, and must find out whether the person who claims to be a good-faith acquirer inspected the dwelling premise prior to its acquisition, as well as other facts depending upon the circumstances of the case.
The good faith of the acquirer may be witnessed by the fact of his examining all the documents on which legal title is based, his investigation as to the grounds of seller’s right of ownership, and the personal inspection of the property to be acquired.
Practical consequences: the standard established by the Supreme Court for good faith to be proved in such situation is rather high: the acquirer, in order to be recognised as a scrupulous one, by no means should confine himself to the verification of the entry in the State Register, but should carry out an in-depth research regarding the history of the piece of real estate he wants to buy. Such instruction given by the Supreme Court does not facilitate the circulation in the market of immovables and begs the question what is the practical rationale of the State Register existence if an entry therein does not suffice for the purposes of verifying the rights of the seller.
