Ownership is the most important property right, defined as the absolute legal and factual control of a person over a particular movable or immovable property. Ownership grants the holder of this right the authority to possess, use, dispose of, modify, as well as destroy or abandon the property, all within the limits established by law. Ownership rights can be acquired through a legal transaction, inheritance, based on a decision by a state authority, in a manner and under conditions determined by law, or by operation of law. All methods of acquiring ownership can be grouped into two categories: original and derivative acquisition of ownership rights, depending on whether the person has previously held ownership rights over the property. Thus, if ownership is established for the first time over a property, it is considered original acquisition (e.g., creating a new property), while if there is only a change in the holder of ownership rights, it is a derivative acquisition of ownership rights (through a legal transaction).
The most common method of acquiring ownership today is through a legal transaction. A legal transaction refers to a Sale Agreement, Donation Agreement, or any other legal transaction suitable for the transfer of ownership rights. Certainly, the concluded legal transaction represents only the basis for acquisition, but in addition to it, the “modus acquirendi” (method of acquisition) must also be fulfilled, which varies depending on whether the property is movable or immovable. In other words, when it comes to movable property, it is not enough to conclude only a Sale Agreement or some other legal transaction; the property must also be delivered to the buyer (delivery of property as the method of acquisition for movable things), whereas in the case of immovable property (parcels, buildings, apartments, garages, etc.), in addition to the legal basis for the transfer of ownership, the property must be registered in the land registry, as ownership over immovable property in the positive law of the Republic of Serbia is acquired upon registration in the land registry.
Ownership rights by inheritance are acquired when, by force of law at the moment of the declaration of inheritance, ownership of the property included in the deceased person’s estate passes to their legal or testamentary heirs. Of course, when it comes to immovable property, it is also necessary to obtain the basis for acquisition – the inheritance decision, which must then be executed in the land registry for the registration of ownership rights in favor of the heirs.
Ownership rights can also be acquired based on a decision from the court or another state authority.
The Law on the Fundamentals of Property Relations specifies the following methods of acquiring ownership by force of law:
- Creation of a New Thing
Ownership of a new thing belongs to the person who created the thing with their work and from their own materials. However, if the person made the new thing using materials from another person with whom they concluded a legal transaction for the creation of that thing, then the ownership belongs to the person whose materials were used. In the absence of a legal transaction, ownership belongs to the person who created the thing with their own work, provided that they acted in good faith and the value of the work exceeds the value of the materials; if this is not the case, co-ownership is established.
- Combination/Mixing
When two things owned by different persons are combined or mixed in such a way that they can no longer be separated without significant damage or disproportionate costs, co-ownership is established over the new thing in proportion to the value of each of the original items at the time of the combination or mixing, unless one item’s value is disproportionately small compared to the other, in which case exclusive ownership belongs to the person whose item was more valuable, and they are obliged to compensate the other party for the value of their property. If the combination or mixing occurs and one of the owners acts in bad faith, the honest owner has the right to choose whether they or the other party will acquire ownership of the new thing, and this right can be exercised within one year from the date of the combination/mixing.
- Construction on Another’s Land
A person who constructs a building on land owned by another acquires ownership of the building, as well as the land beneath the building and necessary for the building’s regular use, provided that they acted in good faith (i.e., they did not know, nor could they have known, that they were building on someone else’s land) and that the landowner was aware of the construction and did not object. In this case, the landowner has the right, within three years of learning about the completed construction and no later than ten years from the completion of the building, to claim compensation for the value of the land at its market price at the time of the court decision.
If the builder knew they were constructing on someone else’s land or faced opposition from the landowner, the landowner has the right to choose between acquiring ownership of the building, with an obligation to compensate the builder for its market value, demolishing the building and restoring the land to its original state, or paying the market value of the land, and they are also entitled to compensation for damages. After three years from the completion of construction, the landowner may only claim compensation for the market value of the land.
If both parties acted in good faith and the value of the building significantly exceeds that of the land, both the building and the land belong to the builder, who must compensate the landowner for the market value of the land. However, if the value of the land is significantly higher, the court will award ownership of the building to the landowner and simultaneously order them to compensate the builder for the market value of the building. If the values are roughly equal, the court will decide who will own the building and land based on the specific circumstances of the case.
- Separation of Fruits
If a person owns a property that yields fruits, they also own the fruits until they are separated. The same applies to separated fruits unless there is a good-faith possessor, usufructuary, or lessee who acquires ownership of the separated fruits at the time of their separation.
- Possession
Possession represents a method of acquiring ownership of a property on which another person has ownership, based on established possession of a specific quality and the lapse of a legally prescribed period sufficient for possession. Regular and extraordinary possession are distinguished. The conditions for regular possession are good-faith and legal possession for at least three years in the case of movable property and ten years in the case of immovable property. The conditions for extraordinary possession are good-faith possession for at least ten years in the case of movable property and twenty years in the case of immovable property. The period for possession starts from the day the possession is established and ends on the last day of the required period.
- Acquisition of Ownership from a Non-Owner
This method of acquiring ownership applies only to movable property. The conditions are that the person who acquired the movable property acted in good faith, paid compensation for the property, and acquired it from a non-owner who sells such items as part of their business, from a non-owner to whom the owner handed the item for possession based on a legal transaction that is not a basis for acquiring ownership, or at a public auction. The true owner can demand the return of the property from the good-faith acquirer if the item has special significance for them, with the obligation to pay the market value of the property. This right expires one year after acquiring ownership of the property.
- Occupation
Occupation allows the acquisition of ownership only over movable property, not immovable property. If the owner of a movable item abandons it, a person who takes possession of the item with the intent to appropriate it acquires ownership of the item, unless otherwise provided by law. If a person renounces ownership of immovable property by a statement made in a notarially solemnized document, the property is not considered abandoned, but it becomes the property of the Republic of Serbia, the autonomous province, or the local government, depending on the entity in whose favor the ownership holder renounced their rights.