Division of Jointly Owned Property—Voluntary and Judicial Division

When a piece of real estate is owned by two or more persons, each of the co-owners generally has the right to request the termination of the co-ownership through partition. This right exists regardless of how the co-ownership arose—for example, through a sale, a gift, inheritance, adverse possession, or any other legal basis. Partition may be carried out voluntarily, when the co-owners reach an agreement, or through the courts, when such an agreement cannot be reached.

What does it mean to own an ideal share of a property?

If, for example, two individuals each own a 1/2 ideal share of a single piece of real estate, this does not mean that each of them owns a specifically defined physical portion of the property. Each co-owner owns an ideal share of the entire property. The ideal share is not demarcated by specific boundaries. It represents a portion of the right of ownership over the entire property. This is different from a physically distinct portion of real property, which has its own boundaries and characteristics.

How is jointly owned property managed?

Each co-owner has the right to use the common property in accordance with its intended purpose, but in a manner that does not prevent the other co-owners from exercising their rights. When a dispute arises among the co-owners regarding the management and use of the property, the law provides mechanisms for resolving such disputes. Under certain conditions, the matter may be brought before the district court where the property is located. It is important to distinguish between the use of the property and ownership of the property.

Co-owners may agree on who will use specific rooms or parts of the property. However, such an agreement governs the manner of use and does not, in and of itself, terminate the co-ownership.

When is compensation due for the use of the jointly owned property?

In practice, a situation often arises in which one of the co-owners uses the property, while the others are effectively unable to use it. Under certain conditions, the co-owner who is deprived of the opportunity to use the jointly owned property may be entitled to compensation from the co-owner who is using it. It is important to note that submitting a written request for compensation is essential for this right to arise.

Therefore, in a dispute regarding the use of jointly owned real property, it is important to establish the specific facts—who is using the property, in what manner, whether a written request has been made, and what the rights of each co-owner are.

What is the partition of jointly owned property?

Partition is a means of terminating joint ownership. The aim is for each co-owner to obtain an independent right to a specific share of the jointly owned property or the corresponding monetary equivalent when the actual division of the property is not possible. In principle, any co-owner may request partition, regardless of whether the others agree.

Partition may be: voluntary—when all co-owners reach an agreement; judicial—when there is no agreement among them.

What are the requirements for the physical partition of real property?

Not every piece of real estate can be physically divided among the co-owners. When assessing whether a property can be physically divided, the requirements of current legislation must be taken into account based on the type and intended use of the property. Various circumstances may be relevant, including the property’s area and characteristics, its intended use, access to the newly formed properties, zoning requirements, cadastral status, and the possibility of creating separate units.

When dividing a residential property, it must be verified whether, following the division, separate residential units that meet legal requirements can be formed. Therefore, the feasibility of a practical division cannot be assessed solely on the basis of the size of the co-owners’ ideal shares.

Voluntary division of jointly owned property. Voluntary partition is possible when all co-owners agree on the manner in which the co-ownership will be terminated. For real estate, the agreement for voluntary partition must be executed in the form prescribed by law. The agreement specifies what each co-owner will receive upon termination of the co-ownership.

After the partition is completed, the relevant deed must be registered in accordance with the procedure prescribed by law. Voluntary partition may be an appropriate option when the co-owners have reached an agreement and it is possible to resolve the dispute without court proceedings.

Judicial Partition of Jointly Owned Property

When the co-owners cannot reach an agreement, any one of them may request a judicial partition. The purpose of judicial partition is to terminate the co-ownership regardless of the wishes of the other co-owners. The proceedings follow a special procedure and generally consist of two main phases.

First Phase - Admission of the partition

In the first phase, the court determines among which parties the partition is to take place, which properties are subject to partition, and what the rights of the individual co-owners are. The court also rules on the shares according to which the partition will be carried out. Once the decision authorizing the partition takes effect, the proceedings move on to the next stage.

Second Phase- Carrying Out the Partition

In the second phase, the necessary steps are taken to effectively terminate the co-ownership. When the property is physically divisible, a plan for the division of the property is drawn up, and an expert is appointed if necessary. Once the individual shares have been determined, they are distributed among the co-owners. If the parties cannot reach an agreement on the distribution, the law provides a special procedure for determining the shares.

What happens if the property is indivisible?

It is possible that a specific piece of real estate cannot be physically divided among the co-owners. In such cases, the law provides for various options depending on the type of property and the specific circumstances. If the legal requirements are met, an indivisible property may be allocated to one of the co-owners, with the rights of the others being compensated with another property or a cash payment. When such an allocation is not possible, the law also provides for the option of selling the property at public auction. The proceeds from the sale are distributed among the co-owners in accordance with their respective rights.

Must all co-owners participate in the partition?

In a partition, it is necessary to include all persons who hold rights to the property and whose participation is required for the proper conclusion of the partition proceedings. This is particularly important because the purpose of partition is to terminate the existing co-ownership and settle the rights of all co-owners. Omitting a co-owner may lead to serious legal consequences and the need for subsequent actions to protect their rights.

What are the most common disputes in property partition?

In practice, various disputes may arise among co-owners regarding the size of the ideal shares, the manner of using the property, compensation for use, the possibility of a physical division, the value of the property, inheritance rights, claims between co-owners, the allocation of indivisible property, public auction, as well as the existence of construction or cadastral issues.

Therefore, before proceeding with a partition, it is important to review the title documents and assess the specific legal and factual situation.

Division of Jointly Owned Property – What Should We Do?

When co-owners can reach an agreement, voluntary partition may allow for the termination of co-ownership without a legal dispute. In the absence of agreement, judicial partition is the procedure provided for by law through which a co-owner may request the termination of co-ownership. Which option is appropriate depends on the specific property, the title documents, the number of co-owners, the extent of their rights, and whether the property can actually be divided.

How can Estates Consult assist you?

The division of real estate often raises issues simultaneously in the areas of property law, inheritance law, cadastral law, and procedural law. Therefore, before taking any specific action, it is important to analyze the title documents, the rights of the co-owners, and the possible ways to terminate the co-ownership. The Estates Consult legal team can assist with analyzing the specific case, reviewing the title documents, assessing the options for voluntary or judicial partition, and preparing the necessary legal actions.

Every case of co-ownership has its own specific characteristics, and the specific legal assessment should be made based on the documents and circumstances of the case.