Recent Trends in Judicial Practice on Unauthorized Construction: The Position of the Supreme Court

Unauthorized construction is not only about the absence of a permit. It is about violating the very logic of the right to build.

According to the Civil Code of Ukraine (Part 1, Article 376), a structure is considered unauthorized if it has been erected:

1. without the required permitting documents;
2. in violation of construction norms and regulations;
3. on a land plot that is not designated for this purpose.

These three criteria form a kind of “checklist” for the courts. The presence of even one of them is enough to fundamentally change the legal status of the structure.

However, in recent years we have seen a transformation of the judicial approach: courts increasingly go beyond strict formalism and take into account the developer’s good faith, length of use, public interest, and the will of the landowner. This is an important signal for lawyers: in unauthorized construction cases, not everything is determined “on paper” — context matters.

No permit = unauthorized construction? Not always.

Until recently, the absence of a construction permit automatically led to the conclusion that the structure was unauthorized. Yet even the existence of project documentation or an architectural plan is not enough if the legally prescribed permitting procedure has not been completed.

A reminder: the form of the permitting document depends on the complexity of the structure:

• notification — for simple structures built according to a building passport;
• declaration — for structures of categories I–III complexity;
• permit — for structures of categories IV–V complexity.

Each of these has a strictly regulated procedure for obtaining it. Without compliance, the construction has no legal foundation.

When a structure appears on your land — built not by you, without a permit, and even without your knowledge — what can be done? Is it possible to simply terminate ownership of such a structure through the courts? Must it be demolished? Or can the structure be preserved while restoring control over the land?

These questions were addressed by the Grand Chamber of the Supreme Court in case No. 916/1174/22, and this judgment has already become one of the key reference points in similar disputes.

Essence of the case: unauthorized construction on municipal land

The Yuzhne City Council filed a claim after a structure was built and registered on its municipal land — without any permits. The property belonged to a public organization that:

• had neither ownership nor any lawful right to use the land;
• had not obtained a construction permit;
• had not approved a project;
• had not put the structure into operation.

The organization simply obtained state registration of ownership based on an appellate court ruling that did not expressly recognize such ownership. The Council insisted that this registration violated the procedure established in Article 376 of the Civil Code of Ukraine and requested the court to terminate ownership of the building.

What did the Court decide?

The first-instance and appellate courts agreed that the structure was indeed unauthorized, but held that termination of ownership is not a remedy provided by law. There are only two lawful options:

1. demolition of the structure;
2. recognition of ownership in favor of the lawful landowner.

The Grand Chamber upheld this position — and not merely confirmed it, but formulated clear legal guidelines that now have systemic importance for all similar cases.

Four key conclusions of the Grand Chamber:

1. The very fact of construction without rights to the land constitutes a violation
   Regardless of whether ownership of the structure is registered — if there is no legal title to the land, the structure is considered unauthorized.
2. Registration does not “legalize” unauthorized construction
   If construction violates Part 1 of Article 376 of the Civil Code, even state registration of ownership does not legitimize its status.
3. There are only two proper remedies:
   - a claim for demolition;
   - recognition of ownership in favor of the landowner (subject to statutory requirements).
4. A claim to terminate ownership is ineffective and legally meaningless
   It does not resolve the fate of the structure, does not allow exercise of rights to the land, and does not restore balance. It is a formal bypass, not a real remedy.

Important: the Supreme Court departed from previous conclusions

Previously, the Civil Cassation Court had occasionally allowed termination of ownership as a separate remedy. However, the Grand Chamber in case No. 916/1174/22 expressly departed from this approach, emphasizing that it does not align with the logic of the Civil Code of Ukraine and the principle of unity of the legal fate of the land and the structure.

📌 The current judicial practice confirms: only the person who has rights to the land (ownership, superficies, etc.) may claim ownership of what is built on it.

Just a few years ago, a claim for demolition of unauthorized construction was perceived by courts as a “classic” and nearly automatic remedy to restore the rights of the community or landowner. However, modern case law demonstrates a completely different approach. Demolition is an extreme measure (ultima ratio) that may be applied only when all other options are exhausted and none of them ensures a proper balance of interests.

One of the key decisions that solidified this trend is the judgment of the Supreme Court in case No. 922/436/22 dated 22 May 2024. At the center of the dispute was a multi-storey residential complex built in Kharkiv without any valid rights to the land or permitting documents. The prosecutor demanded complete demolition of the building and restoration of the land to its original state. At first glance, a typical situation. But the Court took a different path.

Essence of the conflict: an unauthorized residential complex and a claim for demolition

The prosecutor argued that the developer:

• unlawfully occupied land that did not even have a cadastral number;
• constructed the building without any permits;
• unlawfully registered ownership of the apartments.

The Commercial Court granted the claim, and the appellate court approved a settlement agreement between the city council and the developer. Under this agreement:

• the developer paid compensation;
• acknowledged having no rights to the land;
• undertook to formalize land-use rights;
• transferred part of the apartments to the city.

The prosecutor considered the agreement fictitious and unenforceable — and filed a cassation appeal.

The Supreme Court’s Commercial Cassation Court upheld the validity of the settlement agreement and refused to satisfy the prosecutor’s appeal. The Court formulated several important conclusions that today form a new paradigm in disputes involving unauthorized construction.

Six key legal conclusions of the Court

1. Demolition is the ultima ratio

Article 376 of the Civil Code of Ukraine allows demolition only if:

• reconstruction of the object is impossible; or
• the developer refuses to carry it out.

The prosecutor did not request reconstruction at all — only demolition. This makes the claim excessive.

2. The claims were disproportionate

The city did not object to the construction and independently agreed to formalize land-use rights after the settlement. Thus, the interest of the landowner was to preserve the object with compensation, not to destroy it.

3. A settlement agreement is a full-fledged dispute resolution tool

The Court emphasized that a settlement agreement is an expression of party autonomy, has the force of an enforcement document, and allows:

• resolving the dispute without delays;
• avoiding the socio-economic consequences of demolition;
• ensuring a balance of interests between the community and the developer.

4. The prosecutor failed to prove the agreement was unenforceable

No evidence was provided showing that the terms of the settlement agreement could not be executed.

What does this mean for practice?

This decision is further confirmation that the judiciary is shifting from a formalistic approach to a substantive balance-of-interests analysis. In other words:

• if the landowner does not insist on demolition — the court should not apply the harshest measure;
• if the structure can be brought into compliance — demolition is not allowed;
• a settlement agreement between the landowner and the developer is a legitimate mechanism for resolving the dispute.

The balance between private and public interests must prevail over the formal and literal application of the “demolish” sanction.

Demolition — only when nothing else works

Case law, including decision No. 922/436/22, confirms clear criteria for when demolition is permissible:

• there is no and cannot be any proper permit;
• the developer refuses to correct the violations;
• the violations significantly threaten safety or the rights of third parties;
• reconstruction or legalization of rights is impossible.

Otherwise, demolition would be excessive and disproportionate, which directly contradicts Article 376 of the Civil Code of Ukraine, Supreme Court practice, and ECtHR standards (case Ivanova and Cherkezov v. Bulgaria).

Conclusion

Ukrainian courts are decisively abandoning the “any unauthorized construction must be demolished” approach.
Today, the key factors are not only the fact of violation but also:

• good faith of the parties;
• the will of the landowner;
• the possibility of reconstruction or legalization;
• the real necessity of interfering with a person’s rights.

Demolition is not a “default sanction” but an extreme remedy used only when all other avenues are ineffective.