Co-ownership of immovable property, as a form of proprietary relationship, presupposes equality among co-owners and joint use according to each co-owner’s share. This constitutes the fundamental basis on which coexistence and the common ownership right operate.
Cooperation between co-owners becomes even more essential when they pursue the development of the property, such as the demolition of an old building and the erection of a new one.
When the frustration of this shared purpose arises from a regulatory intervention by the state, such as the designation of the property as a protected area, a new legal and factual framework is created within which relations of possession, use and benefit are redefined.
The frustration of the original purpose does not affect the existence of co-ownership, but it does entail significant consequences regarding the obligations among co-owners. Possession, in particular, acquires special importance.
Where one co-owner exercises exclusive possession without the consent of the others, a claim for compensation arises for the benefits the others have been deprived of.
The concept of unlawful interference becomes central; no violent act is required, exclusion of the co-owner from exercising their right to use the common property is sufficient.
Case before the Limassol District Court
The judgment delivered by the President of the Limassol District Court on November 4 concerned three co-owners who jointly and undividedly purchased a property they had previously been renting (three shops, three additional rooms, a yard, an upper-floor residence and more) with the common objective of demolishing the existing building and erecting a new structure.
It was an express and/or implied term of their agreement that each would temporarily retain possession of the shop they occupied prior to the purchase, until the demolition and redevelopment were carried out.
This prospect was permanently overturned when the property was declared protected. This development was deemed a classic case of frustration, as it rendered the shared objective impossible without any fault on the part of the co-owners.
Despite the frustration, one of the co-owners continued to make use of the property beyond the one-third share corresponding to his ownership, effectively holding 67.92 per cent of the premises.
His unilateral and arbitrary use, combined with the obstruction of access by the other two co-owners, formed the core of the dispute, as it amounted both to a violation of their co-ownership rights and a source of lost income.
Loss of rental value
The court focused on the economic dimension of the exclusive possession, accepting the valuation report that calculated the rental value the property could have generated.
Based on this valuation, the court held that the amount to be awarded to the two co-owners totaled €299,501.96 against the co-owner in exclusive occupation. This sum represented the rental income they lost in relation to the portion of the property held by that co-owner in excess of his ownership share.
Accordingly, the court awarded each of the two co-owners half of this amount as full compensation for the rental income they could have received had they not been excluded from possession.
It also issued an order requiring the co-owner to allow them, within ten days of service of the order, to possess and use both shop No. 1 and the upper-floor residence of the disputed property, in accordance with their co-ownership rights.
The outcome of the judgment
In this way, the court restored the equality that lies at the heart of co-ownership. A co-owner who enjoys exclusive use of common property without the consent of the others does not, through habit or the passage of time, acquire a right to monopolise it.
Financial benefit must be apportioned proportionally, and when it is not, the courts will intervene.
The judgment is a characteristic example of jurisprudential treatment of co-ownership, frustration, and unlawful interference.
It underscores that exclusive possession of common property without the consent of other co-owners creates liability for damages, especially where loss of rental value is involved.
The frustration of the original development purpose does not affect ownership, but it does necessitate a fair redistribution of benefits.
The decision contributes to stabilising the principles governing relations among co-owners of immovable property and reaffirms the central role of justice in restoring economic balance.
