Overbuilding indemnity: how it is calculated in a condominium

The overbuilding indemnity is the sum that the owner of the top floor, or of an exclusively owned roof terrace (lastrico solare), must pay to the other owners when exercising the right to build new floors or new structures above the building. The rule is set out in the last paragraph of Article 1127 of the Italian Civil Code: the indemnity equals the current value of the area occupied by the new construction, divided by the number of floors including the new one, less the share due to the person carrying out the work. It compensates the others for the notional portion of land that is exploited upward.

Why the indemnity is owed

The land on which the building stands is common property under Article 1117 of the Italian Civil Code. By building upward, the person entitled to do so exclusively exploits the air column and, notionally, a further share of that common land. The law does not prohibit the operation, but requires an economic rebalancing: the other owners lose a potential utility of the common asset and must be compensated. This is not compensation for damage, but consideration provided directly by law, owed even when the overbuilding is carried out to a high standard and without material harm.

The Article 1127 formula

The statutory criterion starts from the current value of the area that will be occupied by the new structure. This value is divided by the total number of floors of the building, including the newly built one. The resulting share is recognised to the other owners, while the person building retains the part corresponding to their own position. In short, the reasoning is as follows:

• estimate the current market value of the area occupied by the new construction
• divide it by the number of floors, including the new one
• deduct the share pertaining to the owner who builds
• distribute the remaining sum among the other owners according to their thousandths (millesimi) of ownership

The reference date for the estimate is the time the overbuilding is carried out, not the time the building was originally erected: case law consistently requires the current value, updated to the time of the works.

What the value of the area means

The value to be considered is not that of the entire new apartment, nor the construction cost. It is the value of the land, that is, the surface notionally occupied by the new volume, related to local prices and buildability. In practice the estimate is entrusted to a technician (surveyor, architect or engineer) and takes into account the property's location, its planning designation and the local market. Since it is a technical assessment, in the event of a dispute an expert appraisal ordered by the court is common in civil proceedings.

To whom it is paid and in what proportions

The indemnity is due to all the other owners, including those on the lower floors, in proportion to their respective thousandths (millesimi) of ownership. The owner who builds pays nothing to themselves: their share is deducted from the total. The condominium manager has a management role, but the credit belongs to the individual owners, who may also act individually to obtain it. It is good practice for the collection and subsequent allocation to be recorded in the condominium accounts, so that the attribution to each owner is transparent.

When the credit arises and limitation period

The right to the indemnity accrues when the overbuilding is carried out, the moment the common area is occupied. From that moment the ordinary ten-year limitation period runs. It is therefore important that the owners, as soon as they become aware of the works, take steps to determine and request the sum, so that time does not erode the possibility of obtaining it. The quantification can be agreed amicably, through a shared appraisal, or determined in court if the parties cannot reach an agreement.

The role of the manager and management tools

The condominium manager must verify that the overbuilding is lawful, that the structural and aesthetic limits of Article 1127 are respected, and that the indemnity is calculated and allocated correctly. Managing a credit split among many owners, with different thousandths, requires accounting and documentary order. With a management platform such as AmministraPro the manager can set the allocation by thousandths, record the collection of the indemnity and produce statements for each entitled owner; the accounting and allocation features are described on the /funzioni page, while plans and costs are on /prezzi.