Property rights in Brazil are extensively regulated by the Civil Code, which also governs situations where third parties or possessors make interventions on others’ property, such as accessions and improvements. These interventions, which can range from minor upgrades to substantial modifications, raise important legal questions, particularly regarding the nature of possession—whether in good faith or bad faith—and the right to indemnification or retention.
This article aims to explore the legal treatment given to accessions and improvements made by good-faith and bad-faith possessors, highlighting the differences in recognition of rights and obligations.
Concept of Accessions and Improvements
Accessions are permanent incorporations to a property, which can occur naturally (such as the addition of land through alluvium) or artificially (as in man-made constructions). Improvements, on the other hand, refer to interventions that enhance, preserve, or increase the value of the property. They are classified as:
Necessary improvements: aimed at conserving or preventing the deterioration of the property.
Useful improvements: increase the property’s utility.
Luxurious improvements: meant solely for beautification or leisure, without enhancing utility.
The legal treatment of improvements and accessions depends on the nature of the possession, which can be in good faith or bad faith.
Good Faith and Bad Faith Possessor: Legal Definition
The Civil Code, in Article 1.201, defines a good-faith possessor as one who is unaware of any defects or obstacles that could compromise their right to possess, genuinely believing they have the right to use and dispose of the property. Conversely, a bad-faith possessor is aware that their possession is irregular or illegitimate, meaning they know they are possessing something without legal backing.
The distinction between good faith and bad faith is crucial in determining the treatment of accessions and improvements, especially regarding the right to retention, indemnification, and the obligation to return the property to its rightful owner.
Rights of the Good Faith Possessor Regarding Accessions and Improvements
The good-faith possessor, according to the Civil Code, is afforded significant protection regarding improvements made to the property. Article 1.219 states that the good-faith possessor has the right to be indemnified for necessary and useful improvements made to the property. Additionally, they have the right to retention until they are compensated for the value of the improvements, and may refuse to deliver the property to the owner until the corresponding amount is paid.
Luxurious improvements may be removed by the good-faith possessor, provided that their removal does not damage the property’s structure. This ensures that the good-faith possessor can recover items that did not increase the utility or conservation of the property but served only for their pleasure or comfort.
Moreover, accessions made by the good-faith possessor are also their property, following the principle that improvements were made under the legitimate belief that they were the owner or that their right to possess was fully protected.
Rights of the Bad Faith Possessor Regarding Accessions and Improvements
The bad-faith possessor faces more restrictive treatment regarding improvements and accessions. According to Article 1.220 of the Civil Code, the bad-faith possessor is entitled only to indemnification for necessary improvements and cannot claim compensation for useful or luxurious improvements. Furthermore, they do not have the right to retain the property and must return it to the rightful owner without resistance, regardless of any investments made in the property.
In the case of luxurious improvements, the bad-faith possessor, like the good-faith possessor, may remove them, provided their removal does not damage the property. However, the greatest restriction imposed on the bad-faith possessor is the lack of any right to retain the property, aiming to discourage unlawful possession and favor the legitimate owner.
Exceptions and Case Law
Although legislation is clear regarding the rights of good-faith and bad-faith possessors, case law has addressed specific cases that challenge this distinction. In certain situations, courts have softened the strictness of the rule, for example, by recognizing the good faith of a possessor who made significant improvements but, due to procedural or documentary issues, was deemed to be in bad faith.
Another important aspect involves protecting a third party acting in good faith who, without knowledge of the property’s legal situation, made substantial accessions or useful improvements. In such cases, case law tends to recognize the right to indemnification as a means of preserving legal certainty and ensuring that the third party does not suffer losses for relying on the appearance of legitimate possession.
Conclusion
The distinction between good-faith and bad-faith possessors is fundamental in determining the rights and obligations related to accessions and improvements on a property. The good-faith possessor is broadly protected by legislation, with rights to indemnification and retention, while the bad-faith possessor faces severe limitations in recovering their investment in the property.
This distinction promotes good faith in possession relations and protects the legitimate owner, while recognizing investments made legitimately by individuals believing they had rights to the property.