Private property is inviolable. Or so our Constitution says. However, under certain circumstances your property can be taken away. For instance, if the current owner, either unknowingly or on purpose, acquires property from someone who had no right to sell it in the first place. One of our clients, owner of a regional agribusiness, was facing a situation like this.
Olexiy Kharytonov, lawyer and litigation partner at ILF, shared how to protect yourself in such circumstances and whether honest buyers can avoid arrogation.
In 2016 our client was sued by Merefa experimental farm seeking to claim the client's land along with the real estate located there. The plaintiff claimed that the land in question had been taken from him unlawfully 7 years ago. Now the whole story.
In 2001 ILF’s client bought real estate and land from an individual who had acquired the real estate and privatized the land earlier. Before that, the land belonged to Merefa experimental farm and during the farm's bankruptcy proceedings became the property of the Kharkiv District State Administration. In 2016 a new liquidator appointed to handle the bankruptcy proceedings declared his predecessor’s actions to take away the land unlawful.
The thing is, district authorities added said land to their assets when Merefa removed it from theirs when undergoing bankruptcy proceedings. However, when the prosecutor's office deemed such actions unlawful, the authorities went back on their decision. Thus, if the land never became the Administration’s property, all subsequent transactions involving it made on the Administration's behalf were rendered invalid.
As a result, the farmer - our client - who bought the land and has been building his agribusiness for over 7 years, could have lost it all on sufficiently legal grounds. However, ILF lawyers managed to discover legal opportunities for saving the client’s business and property.
We represented our client in administrative court and proved that the Administration's cancellation of its previous decision was unlawful. We defended the transfer of ownership from Merefa to the Administration. As we can see, it is virtually impossible to be completely safe from arrogation of property, even if you are an honest buyer. Be vigilant though: arrogation attempts can be made by someone who has no such right.
If you find yourself in a similar situation, find out whether the land indeed changed owners unlawfully (this can be done using the account of electronic registers, and learn whether the land was involved in any criminal cases with the help of the Unified State Register of Court Decisions); prepare documents confirming that your claim to the property is legal, and be prepared to defend your claim in court. If in the end the court decides to give your property to the original owner, you are still entitled to compensation. This obligation usually belongs to the seller in the invalid deal or the party that became the reason for the deal’s invalidity.