Co-Ownership of Real Estate — What It Involves

What co-ownership is

Co-ownership consists in the ownership of the same thing belonging jointly to several persons. In the case of real estate, this means that none of the co-owners is the owner of a specific, separated part, but has a right to the whole, limited by the rights of the others. This institution is regulated by the Civil Code.

Co-ownership may arise in many ways, for example as a result of inheritance by several heirs, joint purchase of real estate, or the abolition of separate ownership. Regardless of the source, its essence remains the same: several entities share one right of ownership.

Fractional co-ownership

Co-ownership in fractional parts is the most typical form, in which the share of each co-owner is defined by a fraction, for example one half or one third. This share expresses the scope of a given person's powers, but does not correspond to a physically separated part of the property.

A feature of this form is independence in disposing of the share. A co-owner may, as a rule, sell, gift or encumber their share without the consent of the others, although the common thing itself is managed with regard to their rights.

Joint co-ownership

Joint co-ownership is share-free in nature and is always connected with a specific legal relationship, for example marital community of property or a partnership relationship. Within it, no fractional shares are distinguished, and the co-owners cannot independently dispose of their right.

This form of co-ownership lasts as long as the legal relationship from which it arises exists. Only its termination, for example the termination of the community of property, leads to transformation into fractional co-ownership and enables the division of the assets.

Managing the common property

Using the common property and deciding about it requires distinguishing acts of ordinary management from acts exceeding it. For current matters, such as minor repairs, the consent of the majority of co-owners, counted according to the size of shares, is sufficient. For acts exceeding ordinary management, for example the sale of the entire property, the consent of all is needed.

When co-owners cannot reach agreement, the Civil Code provides for the possibility of having the matter resolved by a court. Each co-owner is also entitled to co-possess the thing and use it to an extent that can be reconciled with the powers of the others.

Rights and obligations of co-owners

Co-owners have the right to a share in the benefits and other income from the common thing in proportion to the size of their shares. In the same proportion they bear the expenses and burdens connected with the property, for example taxes or maintenance costs. The principle of proportionality orders the mutual settlements.

At the same time, each co-owner may demand the dissolution of co-ownership if remaining in this relationship no longer suits them. This is an important power, which means that co-ownership, as a rule, does not have to last against the will of those concerned.

Summary: managing co-ownership consciously

Co-ownership is a situation in which one right of ownership is shared by several persons, whereby the Civil Code distinguishes the fractional form from the joint one. The rules of management, the division of benefits and burdens, and the possibility of disposing of a share are of key importance. Knowing these rules allows co-owners to decide efficiently about the property, and in the event of conflict to make use of the institution of dissolution of co-ownership.