Co-ownership may be established in various ways, such as by joint purchase of a real property, by a new addition, by common inheritance, and through marital community of property or a condominium contract. It might happen that one of the co-owners do not intend to maintain this community of property any longer. In such a case co-ownership needs to be terminated.
Any of the co-owners may demand termination of co-ownership; any waiver of this right shall be null and void. The mode of termination of community of property depends first of all on the agreement of the parties who may apply any mode of termination. If the co-owners are unable to reach an unanimous agreement on the mode of termination, it will be determined by the court at the request of any of them. The court will elect from three main modes of termination in the order as stipulated in law, however, it cannot apply a mode of termination of co-ownership against which all of the co-owners launch a protest.
It is important to mention that if one of the co-owners insists on termination of the co-ownership, the other owners cannot prevent it; at the most they may have a voice in selecting the mode of division.
Division of common property
Termination of co-ownership may be carried out by division of common property. This may be done primarily by dividing the subject in co-ownership in kind, i.e. physically (by weight, measure, number of pieces, square metres, etc.) as a result of which the individual parts become in the sole ownership of the former co-owners. Division in kind may be prevented by the following facts:
- it is impossible (the thing cannot be divided);
- it is possible but it would cause a significant decrease in value;
- it would prevent proper use;
- it is prevented by a legal obstacle (e.g. in the case of real properties, lack of the official permit required for division).
It concludes from the above list that co-ownership is divided in kind rather rarely.
Redemption of ownership
If division in kind is impossible, redemption may be a solution. If one of the co-owners may be interested in acquiring sole ownership in the whole thing or a part of it that can be divided in kind (because he resides on it, or manages it etc.), the court may transfer ownership in the things co-owned or a part thereof to one or more of the co-owners against a consideration. Such transfer requires the agreement of the co-owners acquiring ownership, unless ownership of a part of a real property is transferred by the court to the co-owner residing on such property and such action does not violate the reasonable interests of the tenant.
Sale of the common thing; ultimately auction
If division of co-ownership in the modes described above is impossible (or possible only partly), the objects of co-ownership shall be sold and the price received shall be appropriately divided among the co-owners. Co-owners shall have the right of pre-emption in respect of selling as well against third persons.
If you have any questions relating to termination of co-ownership, you may contact us also via our online consultancy section.
