Investments in someone else’s property are among the most frequent and, at the same time, riskiest situations we encounter in legal practice – especially after the break-up of partners who lived together without being married.
When you invest in a flat or house that does not belong to you
Recently, clients have frequently been approaching us with a request to resolve the following situation:
You live with your partner without being married, you move into their house or flat (or the property is bought only by your partner, who becomes its sole owner, even though you contributed certain funds towards its purchase), you function as one household and share everyday expenses. Gradually, however, you decide to also finance larger things – for example, renovation of the property, replacement of windows, a new kitchen or bathroom, etc. And this despite the fact that the property is not owned by you and your partner is its sole owner. Later, however, you break up and leave the shared household in your partner’s property.
At that moment, a fundamental question arises: Are you entitled to the return of the money you invested in someone else’s property?
What happens to the investments you put into someone else’s property? How should you proceed if you financed the appreciation of property that does not belong to you and, in connection with financing someone else’s property – your partner’s property – there was no agreement between you and your partner that would have determined the nature (legal basis) of the investments and your mutual rights and obligations?
Unjust enrichment as the basic legal claim
If there was no written agreement between you and the owner of the property, Slovak law generally assesses such situations as unjust enrichment.
Under Section 451 of the Civil Code: “Whoever is unjustly enriched at the expense of another must surrender the enrichment.”
The owner of the property is enriched by the renovation in that the value of their property increases. The person who financed the investments therefore has the right to claim compensation in the amount of the appreciation in the value of the property.
⚠️ Important notice:
The claim does not automatically relate to the amount you actually paid, but to how much the value of the property increased as a result of the investments.
Not every performance directed towards someone else’s property automatically gives rise to unjust enrichment of the owner; according to certain legal opinions, only interventions that result in a permanent change in the structural and technical condition of the property leading to its appreciation can be considered an investment in the legal sense. Conversely, routine maintenance work, repairs and activities aimed merely at preserving the original condition of the property (e.g. painting, minor repairs, replacement of worn-out components without an increase in value) do not give rise to unjust enrichment, since there is no increase in assets on the part of the owner.
How to prove investments in someone else’s property
Whoever claims the surrender of unjust enrichment must be able to prove:
- when they made the investments,
- to what extent,
- and that they actually led to the appreciation of the property.
In practice, the amount of the appreciation of the property is often proven by an expert opinion comparing the value of the property before and after the investments.
Beware of the limitation of the claim for investments in someone else’s property
In the case of investments in someone else’s property, limitation (prescription) is one of the most frequent reasons why clients lose their claim. This is because “if the debtor invokes the limitation, the time-barred right cannot be awarded to the creditor”.
What are the limitation periods for unjust enrichment?
Under Section 107 of the Civil Code, the following applies to claims arising from unjust enrichment:
- subjective limitation period:
👉 2 years from the day on which the entitled person learns that unjust enrichment has occurred and who has been enriched,
- objective limitation period:
👉 3 years from the date the enrichment arose,
👉 in the case of intentional unjust enrichment, up to 10 years.
When does the limitation period start to run?
In the case of an investment in someone else’s property, it is very important to be aware precisely of the moment when the objective limitation period starts to run, on which the Supreme Court of the Slovak Republic expressed itself in its decision of 11 December 2013, Case No. 1MCdo/16/2011, as follows (unofficial translation):
“As a general rule, unjust enrichment obtained through performance without a legal basis (if the legal basis did not exist from the outset) arises by the very provision of the performance. Where the performance consisted of investments in someone else’s real property, the owner of the property is unjustly enriched at the moment when the property appreciated in value (compare, e.g., the resolution of the Supreme Court of the Czech Republic of 29 January 2003, Case No. 25 Cdo 355/2001), and from that moment the objective limitation period under Section 107(2) of the Civil Code also starts to run. The court of appeal on points of law therefore agrees with the opinion of the courts of both lower instances, which in the case at hand derived the start of this limitation period from the moment the plaintiffs completed the reconstruction works on the property concerned, which, according to the evidence taken, occurred no later than 4 September 1996. Since the last day of the three-year objective limitation period fell on Saturday, 4 September 1999, its last day was ultimately Monday, 6 September 1999.”
As stated above, both case law and the applicable legislation clearly lead to the conclusion that unjust enrichment arising from an investment in someone else’s property without a clear agreement with its owner arises at the moment the property appreciates in value, and from that moment the objective limitation period also starts to run, regardless of the duration of the partnership or subjective expectations of a future settlement.
This means that:
- the limitation period does not start with the break-up,
- it does not depend on the length of the relationship,
- nor on the subjective expectation that “it will be settled one day”.
In practice, this is usually the moment the renovation works are completed.
How to proceed so as not to lose your money
Investing in someone else’s property without a clear legal title represents a significant legal risk. We recommend in particular:
- Concluding a written agreement before making the investment, which clearly determines the legal basis (e.g. a loan, an agreement on the settlement of investments, co-financing with a right to settlement, acquisition of a co-ownership share, etc.),
- Precisely regulating the method of settlement – whether the compensation will be based on the funds invested or on the appreciation of the property,
- Agreeing on the moment of settlement of the investments – setting a deadline for performance; in the case of a loan, setting its maturity date,
- Thoroughly documenting all investments (invoices, bank statements, contracts, photographs),
- If the investment has already been made without an agreement, dealing with the situation without undue delay, before the claim becomes time-barred,
- In the event of a dispute, considering an expert opinion, since what is decisive is the amount of the enrichment, not the amount of the investment.
Do you need your specific case assessed?
Every case of investments in someone else’s property is individual and depends on the specific circumstances, evidence and timeline.
If you are considering asserting a claim or want to avoid legal risks, professional legal advice can save you significant financial losses.
👉 Do not hesitate to contact our law firm; we will comprehensively assess your situation and propose an optimal solution.
