Abolition of Co-ownership
Co-ownership of property, both movable and immovable, occurs when more than one person has ownership. Due to the legal basis for the creation of co-ownership, there is a co-ownership in fractions or joint ownership. Joint ownership refers to the joint property of the spouses and joint ownership in a civil partnership, whereas a fractional ownership may be created as a result of inheritance or as a result of a divorce and division of the spouses’ matrimonial property. The nature of joint ownership determines the rights and obligations of the joint owners, which is particularly important in the case of the will to dispose of a share in the joint property or the whole joint property.
The object of joint ownership is always a specific thing – for example a car, a house or an apartment. However, it is not infrequent that co-ownership of a thing is troublesome and poses more problems and difficulties than the benefit of ownership. The law provides for the possibility of liquidating the co-ownership relationship, i.e. liquidating the state in which the ownership of one thing is indivisibly vested in several people.
The procedure for abolition of co-ownership
The removal of co-ownership can be done in two modes: by agreement or by court order. The conclusion of an agreement is the quickest and easiest way to remove co-ownership, but this is only possible if the co-owners agree on the way in which the goods are to be distributed. The agreement on the cessation of joint ownership should be concluded before a notary public, and its content should be prepared with due consideration taking into account the interest of the joint owners, the value of the item and the manner of its use to date.
Another way to abolish joint ownership is to initiate legal proceedings, which is usually disputed and requires the preparation of an appropriate proposal, relevant evidence and reasonable proposals for the abolition of joint ownership. Joanna Jakubowska-Zawada Law Office provides assistance in both contractual and judicial liquidation of joint ownership, participates in pre-trial negotiations of conditions, and represents the owners in court proceedings aimed at liquidation of joint ownership in a manner consistent with the expectations of clients.
Ways of abolishing co-ownership
The law distinguishes three ways of abolishing co-ownership:
- physical division of the joint property,
- granting the joint property to one of the co-owners with an obligation to repay the others,
- civil division, i.e. sale of the common item and division of the selling price.
Physical division of a common item refers only to a divisible item and may consist in separating a few smaller plots of land from the property or separating two or more independent dwellings in a house. The division results in the creation of new items of ownership, which are independent, separate items, separated from the larger, parental item. As a result, the joint ownership of the original common item expires.
However, it should be taken into account that when the co-ownership of real estate is abolished, it is necessary to determine whether the method of physical division of real estate suggested by the owners is consistent with the law, with the socioeconomic purpose of the thing, or whether it does not change the essence of the thing or significantly reduce its value.
The allocation of a shared property to a single co-owner for exclusive ownership takes place when it is not possible to apply physical division of the property. Granting is linked to an obligation to repay the other joint owners in accordance with their respective shareholdings and the value of the jointly owned thing which the parties cancel. It is important that in court proceedings, the repayment obligations are determined by the court, indicating the method of payment and the date of payment, and in the contractual termination of joint ownership, these elements are determined by the parties themselves.
Civil division through the sale of the joint property and the division of the price obtained according to the size of the shares is in fact the last and categorical solution in the case. This method is acceptable in both judicial and contractual proceedings. The sale of the joint property shall be administered when it is not possible to make the division in kind and there are no circumstances justifying the granting of the joint property to any of the joint owners. The court shall order the sale of a joint item by auction, in particular if none of the co-owners has agreed to grant the item and to repay it. In the event of the contractual cessation of joint ownership, the sale shall be made by the joint owners themselves, who shall determine both the manner and date of the sale and the rules for the distribution of the sales price obtained.