Article 448 of the Civil Code: Builder in good faith

In plain words, when the builder acted in good faith, the landowner has two options:

1. Keep the building and pay the builder the indemnity set by Articles 546 and 548.
2. Make the builder pay the price of the land. For crops (sowing), the sower pays the proper rent instead.

The second option has a limit. If the land is worth "considerably more" than the building, the builder cannot be forced to buy it. The builder then pays reasonable rent, if the owner does not take the building. The parties agree on the lease terms, and if they cannot agree, the court fixes them.

The article does not define the term. The Supreme Court has described it:

• In Padilla v. Malicsi (2016), a builder in good faith is one who was not aware of a defect or flaw in his or her title when building on a lot that turns out to be owned by another.
• In Espinoza v. Mayandoc (2017), the Court added that the builder must claim title to the land, that is, possess it "in the concept of owner", and be unaware of any flaw in that title or in the way it was acquired.

The law presumes good faith. But in Padilla the Court said that a party who claims to be a builder in good faith must still prove it by preponderance of evidence. The builders there relied on a stranger's word and did not check the tax declarations or the title before building. The Court held they were not builders in good faith, so Article 448 did not apply to them.

The landowner. In Padilla, the Court quoted an earlier ruling: the choice belongs to the owner of the land, because the accessory (the building) follows the principal (the land). The same ruling also said the landowner "cannot refuse to exercise either option and compel instead the owner of the building to remove it from the land."

If the landowner keeps the building, Article 448 sends us to the rules on expenses of a possessor:

• Necessary expenses (to preserve the thing) are refunded to every possessor. Only a possessor in good faith may keep the thing until paid (Article 546).
• Useful expenses are refunded only to a possessor in good faith, who may also keep the thing until paid. The landowner may refund the amount spent or pay the increase in value (Article 546).
• Expenses for pure luxury are not refunded. The builder in good faith may remove the ornaments if the main thing is not damaged, unless the landowner prefers to pay for them (Article 548).

The next articles cover bad faith:

• Article 449: a person who builds, plants or sows in bad faith on the land of another loses what is built, planted or sown, without right to indemnity.
• Article 450: the landowner may demand demolition at the builder's expense, or make the builder pay the price of the land.
• Article 451: in these cases the landowner is also entitled to damages.
• Article 452: the builder in bad faith may still recover the necessary expenses of preserving the land.
• Article 453: if both the builder and the landowner acted in bad faith, they are treated as if both acted in good faith. The landowner is in bad faith if the building was done with his knowledge and without his opposition.