General Rules for Terminating Joint Ownership
“We often say, ‘A horse shared by many has a sore back’,” referring to joint ownership, which can arise not only by the will of the parties (contract, marriage) but also independently, such as in the case of inheritance. Anyone can “free themselves” from co-owners by selling their share of the property to someone interested. But what can someone do if they are attached to their ownership and do not wish to alienate their part? Are co-owners bound to each other? Is there a way to terminate joint ownership?
Joint ownership is a form of legal community in which the ownership rights to the same property are held by multiple persons in defined ideal shares.
The basic principle is that no one can be forced into or kept in joint ownership against their will.
Any co-owner can request the termination of joint ownership, but for the agreement to be valid, it must include the approval of all co-owners.
The method of division is primarily governed by the agreement of the parties, but if they cannot reach an agreement on any issue, the matter of terminating joint ownership falls to the court.
According to Article 676 of the Civil Code, there are generally three main ways to terminate joint ownership:
- The joint property should primarily be divided in kind, which is only possible for divisible items;
- The court may assign the joint property to one or more co-owners, with appropriate compensation to the others;
- If no other solution is possible, the property is divided based on value, meaning the joint property is sold, and the sale price is distributed according to the ownership shares.
The primary consideration is for the parties to agree on a sale, but if they cannot unanimously agree, the court will order the sale of the joint property through auction.
The procedural rules for initiating a lawsuit to terminate joint ownership are outlined in Articles 979-995 of the Code of Civil Procedure.
A decision on the termination of joint ownership can only be made if all co-owners are part of the lawsuit.
The plaintiff is required to specify the value of the subject of the lawsuit in the complaint, as this forms the basis for the 3% procedural fee. To save costs, it is advisable to refer to the taxable value.
One peculiarity of these cases is that the court costs are shared proportionally among the parties since, in such cases, there is no traditional “loser,” as the division serves the interests of all co-owners.
The final court ruling creates an enforceable legal obligation between the co-owners, essentially compelling them to divide the joint property in kind or transfer ownership, even if the parties did not request the transfer of the movable or immovable property, or if the court did not order it. The ruling of the first-instance court can be substantively reviewed on appeal.