The joint-ownership system
Joint ownership is the legal situation in which two or more people jointly own the same property. Theoretically, it allows easier financing, maintenance, and management.
Why buy through joint ownership?
Joint ownership appears to be the easiest solution for buying property together. Of course, this is not the only one (it is possible to opt for more specific options such as SCI for example), but it is by far the least restrictive. It hardly requires any special procedure or formality.
Every buyer owns the property on the basis of his financial contribution during the purchase (30/70, 40/60, 50/50, etc.), without his share being materially distinguished.
Buying in joint ownership is therefore very simple, at least initially, especially for cohabiting partners or civil union couples, who wish to acquire their home together.
Does joint ownership involve risks?
Once the property has been purchased, each of the owners (called co-owners) has rights to the entire property. The most important decisions must be taken unanimously (with exceptions). In the event of a disagreement, it can quickly lead to blocking situations.
In addition, each co-owner is required to settle the debts of the co- ownership (taxes or work on housing, for example), in proportion to his share. In other words, it is key to properly assess the disagreement risks, before purchasing.
Last but not least, the joint ownership regime is temporary. The law establishes as a principle that "no one can be forced to remain in joint ownership". If one of the co-owners decides to put his share up for sale, the others, who cannot object, have a right of pre-emption over the transferred share. In the absence of repurchase (by another co-owner or by a third party ), the property must be sold.
This situation does involve risks. It is better to anticipate the latter through a joint ownership agreement.
How to avoid risks?
The joint- ownership agreement
It is possible to correct this insecure situation by signing a joint- ownership agreement. For validity, this agreement must be drawn up in writing, list the undivided assets and specify the rights of each co-owner.
As soon as the agreement concerns real estate, it must also be drawn up by a notary and be published in the Land Registry Service. It can be concluded for a fixed period (five years maximum). In this case, the co-owners remain free to renew it through a simple agreement; a tacit renewal may be considered.
The purpose of the joint ownership agreement is to organize the management of joint ownership and to set the rules. The joint owners can arrange the distribution of their expenses; appoint a manager (chosen or not among them); set the amount of an occupancy allowance (if one of them occupies the property alone, for example); etc.
When the agreement is rounded off for an indefinite period, none of the co-owners can demand the sale of the property to obtain their share.
What to do in case of a dispute?
When the sale of undivided property is blocked by one of the co-owners, authorization to sell can be requested from the district court by the other co-owners representing at least 2/3 of the undivided rights. A notary intervention is a must.
Are there other joint ownership situations?
Joint ownership is not always a chosen scenario. It can be experience, on the occasion of death for example, while waiting for the inheritance between the heirs to be liquidated (joint ownership ); or during the termination of a conjugal union at the time of a divorce (post-community joint ownership).
But whether established voluntarily or involuntarily, joint ownership remains subject to the same rules.
Do not hesitate contacting your notary to find out whys and wherefores.
- My landlord has issued me by bailiff leave for sale with indication of a net selling price. The real estate agency in charge of the sale claims me €30,000 agency commission. Do I have to pay them?
- I want to buy an apartment. My bank refused my loan. Can I ask the seller a staggered payment of the selling price?
- I'm selling my main home acquired 5 years ago. The notary claims a missing diagnosis: ESRIS. It was not provided to me 5 years ago. Am I obliged to have it done?
- I signed a reservation contract for the acquisition of a property on plan. This contract has been notified to me for more than 1 month, can I retract?