Property Law in Estonia

From Principles to Practice: Typical Property-Law Situations

Property law is not only about statutes and registry rules — it shows up in everyday situations and disputes faced by owners, tenants, and neighbors. Below we explain key topics such as acquisition in good faith, co-ownership, servitudes, compulsory limited real rights, neighbor law, and other questions that help avoid problems and ensure property is used safely and lawfully.

Acquisition in Good Faith

“Acquisition in good faith” means a person buys real estate honestly believing everything is in order, but later it turns out the seller had no right to sell. For example, the register may show one person as owner while an ownership dispute is ongoing or an entry has not yet been updated. If the buyer relied on the register and did not know — and was not required to know — that the seller lacked authority, the law protects the buyer: they remain the owner of the property.

This principle is vital for market certainty: people are willing to buy and sell real estate knowing that, if they act in good faith and check the land register, they will not be penalized for someone else’s mistake or hidden problem. It is a relatively rare scenario, but when it occurs it may involve substantial value and end up in court.
(Legal basis: Law of Property Act § 95.)

Co-Ownership

Co-ownership means a single property or building belongs to several persons at the same time. Each co-owner has an ideal (undivided) share of the whole, not a fixed physical part. By default, nobody owns “the kitchen” or “the yard” — everyone owns a proportional share of the entire property.

In practice, co-owners can agree on a notarised use arrangement that sets out who uses which parts (e.g., one uses the yard, another the garage, a third a particular flat). This supplements the undivided shares with a practical use split and helps avoid day-to-day disputes.

Problems arise if there is no use arrangement or one co-owner wants to make decisions without the others’ consent. If no agreement is possible, the law allows a co-owner to request termination of co-ownership. In practice this usually means one of three solutions:

• one co-owner buys out the others (or gifts their share away);
• the property is jointly sold to a third party and the proceeds are divided;
• the property is divided into apartment ownerships, if legally and structurally feasible.

Because co-ownership terminations often reach court, this is considered one of the more complex areas of property law.
(Legal basis: Law of Property Act § 70.)

Servitudes and Compulsory Limited Real Rights

Servitudes and compulsory limited real rights frequently arise in property use. Both involve situations where the owner must allow someone else to use the land or building — either by agreement or under law.

A servitude (servituut) is a right whereby the owner of one property (the “servient” property) must allow another person or property to use something. A straightforward example is a right of way: if a neighbor has no access to a public road, a servitude may grant the right to pass over another’s land. Servitudes can also allow utility lines — electric cables, water pipes — across a property. A servitude is typically created by agreement in a notarised deed and entered in the land register so it is visible and binding on future owners.

A compulsory limited real right (sundvaldus) is stronger and arises without the owner’s voluntary consent — through statute or an administrative act, in the public interest. For example, emergency services may require access for safety, or a network operator may need to install pipelines or power lines. The owner cannot block a compulsory right, but is generally entitled to compensation, since use of the property is restricted.

In short, a servitude is usually a negotiated solution, whereas a compulsory limited real right is a state or municipal obligation imposed for public purposes.
(Legal basis: Law of Property Act § 158; Law of Property Act Implementation Act § 15¹².)

Neighbor Law

Neighbor law sets rules to keep balance between neighbors when one property’s use affects another. While an owner is largely free to use their land, the law sets limits so that neighbors’ rights are not harmed.

Typical disputes involve smoke, noise, or dust affecting a neighboring plot; loss of sunlight due to tall trees or a building; and water runoff — if rain or meltwater is directed so that it floods the neighbor’s land, a court case can follow.

The law requires owners to exercise their rights with due regard to neighboring interests. A neighbor does not have to tolerate unreasonable harm or disturbance that exceeds normal limits. Disputes can be taken to court if needed.
(Legal basis: Law of Property Act § 143.)

Termination of Ownership of Real Estate

Ownership of real estate can end in two main ways. First, the owner may renounce the immovable. This is not done informally: a notarised declaration is required and entered in the land register. In that case, the property automatically passes to the state, and the state’s consent is not required for the entry.
(Legal basis: Law of Property Act § 126.)

Second, ownership may end via acquisitive prescription (usucapion). If someone else has used and possessed the immovable continuously and as if an owner for a long period — at least 30 years — they may, by law, become the new owner.
(Legal basis: Law of Property Act §§ 123–124.)

Acquisitive Prescription (Long-Term Possession)

Acquisitive prescription is a statutory route to ownership based on long-term possession and use as one’s own. In Estonia this generally requires 30 consecutive years.

Acting “as an owner” means caring for the property, paying land tax, maintaining or improving buildings, and not letting it fall into disrepair. Over that time, the true owner has not effectively asserted their rights or challenged the possessor’s actions.

Importantly, acquisitive prescription is not automatic. The possessor must apply to the court, and only after the court’s decision is the new owner entered in the land register. It exists to ensure legal certainty — to avoid immovables lingering indefinitely in unclear ownership.
(Legal basis: Law of Property Act §§ 123–124.)

The Hierarchy of Norms

Laws form a layered system in which some rules are general and others very specific. This is the hierarchy of norms.

• General norms provide a broad framework. For example, the General Part of the Civil Code Act sets out overarching civil-law principles — general rules on transactions, time limits, abuse of rights, etc.

• Special norms address specific situations or fields. The Law of Property Act governs ownership, limited real rights, servitudes, and mortgages, while the Implementation Act (AÕSRS) details matters such as obligations to tolerate utility networks.

When a general rule and a special rule collide — one says “as a rule do X,” the other says “in this specific case do Y”—the special rule prevails. This avoids confusion in a dense legal landscape and guides practice: first look for a specific provision; if there is none, apply the general one.
(Legal basis: General Part of the Civil Code Act; Law of Property Act Implementation Act.)

Property Law and Public/Private Law

Property law closely interlinks with both public and private law. It touches state planning, building permits, and public interests, as well as everyday life — families and neighbor relations. Understanding this maze matters to anyone buying, selling, managing, or using real estate. Legal awareness helps avoid costly problems and ensures property remains a safe, value-preserving investment.
(References: Building Code, Planning Act, Law of Property Act, Land Register Act.)

Estonian property law rests on strong traditions and well-considered statutes. Even so, disputes still arise in practice — especially regarding co-ownership, servitudes, acquisition in good faith, and neighbor law. Owners should keep an eye on legal developments, review registry entries and encumbrances, and consult a lawyer when needed — so their property serves their interests in the best possible way.