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Encroachment onto the neighbouring property: rights with boundary encroachment under section 418 ABGB

Encroachment onto the neighbouring property: when section 418 ABGB provides compensation of value instead of removal and what role the good faith of the builder plays.

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23 June 2026 · Mag. Bernhard Brandauer, Rechtsanwalt

Sometimes only a survey reveals that a building or a building part projects over the property boundary. Such an encroachment regularly leads to a dispute between the builder and the neighbour. The question then is whether the encroachment has to be removed or whether compensation is sufficient.

Austrian law resolves this question through the rules on construction on another’s land. In principle, a structure falls to the owner of the land on which it stands. From this principle, section 418 ABGB makes an important exception under certain conditions in favour of the builder in good faith.

This article explains how encroachment is assessed legally, what role the good faith of the builder and the conduct of the landowner play and which claims come into consideration. From a lawyer’s perspective, precise clarification of the facts determines whether it is removal or compensation.

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01 Question 1

From which perspective does the question of encroachment arise?

The assessment depends on whether you built or whether someone else’s structure stands on your land.

All paths at a glance

Overview of all answers.

01

As a builder in good faith, your position can be favourable under section 418 ABGB.

If you built across the boundary in good faith and the landowner knew of the construction and did not immediately forbid it, the landowner can, under section 418 of the Austrian Civil Code (ABGB), only demand the common value of the encroached land. The builder in good faith can then acquire ownership of the affected strip of land against compensation of value.

This assessment depends strongly on the individual case, in particular on the neighbour’s knowledge and the timing of any objection. Have your good faith and the conditions checked precisely before you negotiate.

02

Building against better knowledge risks a claim for removal.

If you knew about the foreign land when building, good faith is lacking. Then the principle remains that the structure falls to the landowner, and the neighbour may under certain circumstances demand the removal of the encroachment. A favourable solution via section 418 ABGB is generally ruled out.

In this situation, an amicable arrangement with the neighbour is often the better route, for example by purchasing the strip of land or by an easement. Have your position and the options for action checked.

03

As the affected landowner, your rights depend on the builder’s good faith.

If a foreign encroachment stands on your land, your rights depend on whether the builder was in good faith and whether you knew of the construction and did not immediately forbid it. With a builder in bad faith, you may under certain circumstances demand removal. If you knew of and tolerated a construction in good faith, your claim may be limited to the common value of the land.

React promptly to a recognised encroachment. An immediate objection can considerably improve your position. Have your rights checked quickly.

The principle: the structure follows the land

In Austrian property law, the principle applies that a structure firmly connected to the ground falls to the owner of the land on which it stands. Anyone who builds with their own material on another’s land therefore does not simply create their own ownership of the structure. Rather, the structure shares the legal fate of the land.

This principle explains why an encroachment without an arrangement is problematic. If a building part projects over the boundary, it is located on foreign land. Without further conditions, the neighbour as landowner can in principle demand that the condition impairing their ownership be removed.

The law, however, softens this strict result for the case of the builder in good faith. Section 418 ABGB provides, under certain conditions, that removal does not have to take place but that compensation of value steps in instead. Decisive here are the good faith and the conduct of the landowner.

Good faith and the landowner’s knowledge

Under section 418 ABGB, it first matters whether the builder was in good faith. In good faith is anyone who genuinely assumed they were building on their own land. By contrast, anyone who knows they are building across the boundary is in bad faith and cannot rely on the favourable rule.

In addition, there is the conduct of the landowner. If the landowner knew of the construction and did not immediately forbid it, they can, under section 418 ABGB, only demand the common value of the land. The builder in good faith in this case acquires ownership of the affected land against compensation of the common value. Anyone who notices an encroachment should therefore object quickly and in a provable manner.

If the builder was in bad faith or the landowner objected to the construction in good time, the principle remains. Then the landowner may under certain circumstances demand the removal of the encroachment. The assessment of these conditions is delicate and depends strongly on the individual case.

Consequences of encroachment at a glance

Builder in good faith and in bad faith

How good faith and the conduct of the landowner affect the legal consequence.

Legal consequences with encroachment under the rules on construction on foreign land
Situation Condition Possible consequence
Good faith Builder in good faith Landowner knew of the construction and did not forbid it immediately Compensation of value, acquisition against common value (section 418 ABGB)
Bad faith Builder knew the boundary No good faith Structure falls to the landowner, removal possible
Objection Landowner forbids immediately Timely objection Favourable rule for the builder is ruled out

The overview shows basic situations. The assessment depends strongly on the individual case and does not replace a review.

How to proceed with an encroachment

Whether you are the builder or the affected landowner, in both cases the precise clarification of the facts is the first step. A survey shows the actual boundary line and the extent of the encroachment. Record who knew what and when and how the encroachment was responded to.

As a landowner, you should react to a recognised encroachment promptly and in a provable manner, since an immediate objection can improve your position. As a builder, it is worth checking whether the conditions of section 418 ABGB for a favourable solution are met. Often an amicable arrangement, for example by purchase or easement, is the most practicable route.

How close to the boundary you may build at all is explained in the article on setback distances and the boundary. Where it concerns immissions from the construction site, the article on neighbour law for construction-site immissions helps. How to secure the condition early is explained in the article on preserving evidence before construction litigation.

Practical tip: Do not react to a recognised encroachment only years later. Secure the boundary line through a survey and document who knew about it and when. Whether removal or compensation, the situation depends strongly on the individual case. Booking an initial consultation (72 euros) clarifies your position.

FAQ

Encroachment onto the neighbouring property.

Does an encroachment always have to be removed? +

No. In principle, a structure falls to the owner of the land on which it stands, and the neighbour can demand removal. However, if the builder was in good faith and the landowner knew of the construction and did not immediately forbid it, compensation of value steps in instead of removal under section 418 ABGB. The assessment depends on the individual case.

What does good faith mean for the builder? +

In good faith is a builder who genuinely assumed they were building on their own land. By contrast, anyone who knows they are building across the boundary is in bad faith. Good faith is a central condition for the favourable rule of section 418 ABGB, which can allow the builder in good faith to acquire the land against compensation of value.

What should I do as the affected landowner? +

React to a recognised encroachment promptly and in a provable manner. An immediate objection to the construction can prevent the builder from relying on the favourable rule of section 418 ABGB. Have the boundary line clarified by a survey and your rights checked quickly, as the time factor plays a role here.

Further reading

Related topics around the property boundary

Setback distances and the boundary

How close to the boundary you may build in Salzburg and which minimum distances apply.

Neighbour law for construction-site immissions

Which rights neighbours have with noise, dust and vibrations from the construction site.

Preserving evidence before construction litigation

How to secure the condition and damage early before a dispute arises.

Construction damages and liability

The focus page on damages questions around building and the neighbourhood.

Topics
encroachmentboundaryneighbour lawconstruction on foreign landABGB

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