Sale of jointly-owned property

Sale of jointly-owned property

Act on Property and Other Real Rights (official gazette “Narodne novine” no. 91/96) sets out various ways of dissolving co-ownership over property, specifically the division of moveable property by physical division, of immovable property by geometric division, and it also sets out a civil division, dissolution by payment, dissolution on several things at the same time i.e. the so-called distribution by equivalents and dissolution by establishment of condominium ownership.
Since the procedure for the division of co-ownership of things is carried out under the rules of non-contentious procedure, this means that the co-owner seeking the division (if there is no agreement between the owners of the property) needs to submit a proposal to the court which includes all co-owners.

Sale of real estate

When several persons own something so that each person holds a part of that right of ownership, determined mathematically in proportion to the whole right of ownership for such thing, than they are all co-owners of such thing, and parts of the right of ownership that belong to them are co-ownership parts.
Therefore, each co-owner owns their co-ownership part. Each co-owner is the full owner of the aliquot part of the thing which corresponds to their co-ownership part. Thus, the co-owner has full legal authority regarding their aliquot part of the thing if they can exercise it considering the nature of the aliquot part. Provided that it does not affect rights of others, the co-owner independently disposes with his aliquot part of the thing, they can independently alienate it, enjoy it, independently bears the costs and charges of their parts, and they can also abandon it. The co-owner does not require permission of other co-owners for such disposal, but since it is jointly-owned thing, none of the co-owners have the full right of ownership over the thing, but only over their co-ownership part.

Sale of jointly-owned real estate – condominium

From the legal standpoint, nothing prevents the owners from selling their aliquot co-ownership part of the real property, and this does not require the consent of other co-owners. If you cannot find a buyer who would by only your aliquot part of the real estate, you can always carry out condominium procedure. If the other co-owners do not want to carry out the condominium procedure or sign the partition agreement, such a division can be achieved with a dissolution of the joint property ownership. . The simplest way, which requires the least time and costs, is the dissolution by written agreement. In such an agreement with the other co-owners, you can agree on the method of distribution. If the other co-owners do not agree to the mutual dissolution of the joint property ownership, the same can be achieved through the court in a non-litigation procedure. In that case, the court shall dissolve the joint property ownership by dividing the geometrically or by selling it at a public action and dividing the money between you and other co-owners of the real estate.

Right to dissolve joint-ownership of real estate

According to the law, when there is a co-ownership of a thing, it is considered that the thing is legally divided into equal parts (aliquot parts), whose size is determined by the size of co-ownership parts. Therefore, each co-owner is the owner of the aliquot part of the thing which corresponds to his co-ownership share, and with regard to such part, the co-owner has all the powers that the owner has, if he can exercise them considering the nature of the aliquot part.
Unless otherwise specified, each co-owner may exercise all the powers they have as the holder of the right of ownership regarding the whole thing without consent of other co-owners, provided that this does not violate the rights of other co-owners.

In this way, each co-owner has the right to dissolve the joint ownership, it it is possible and allowed, and this right does not expire. It is important to note that the co-owners may request dissolution at any time, except when it would be to the detriment of others, but they can do so even then if, considering the circumstances, it cannot be reasonably expected that the circumstances will soon change in such a way that the dissolution would be to the detriment of other co-owners. The court competent for conducting the dissolution procedure shall decide on objections that a dissolution cannot be demanded.

Therefore, pursuant to the Act, the co-owner can exercise the right to dissolution:

• By an agreement (dissolution agreement) with all co-owners with whom they dissolve the joint ownership (voluntary dissolution) or
• Through the court, when there is no agreement between the co-owners regarding the method of dissolution (judicial dissolution).

Sale of jointly-owned real estate – voluntary division of real estate

Voluntary division of real estate exists if the co-owner exercises their right to dissolution in an agreement with all co-owners with whom they  dissolve the joint ownership.

The prerequisites for the voluntary division of real estate are that the contract has been concluded between all co-owners in writing and that the signatures of the co-owners have been certified. The unanimity of the co-owners must also exist regarding the decision to implement the division and regarding the subject and manner of the division. In the case of voluntary division of real estate, the co-owners can agree on any method of dissolution specified in the introduction, except for the one that is not actually possible or that is not allowed by law.

Sale of jointly-owned real estate – judicial division of real estate

On the other hand, when the division is carried out by the court further to the proposal for the partition of real estate, the court is primarily bound by strict statutory provisions, and secondarily by a valid agreement of the parties on the method of dissolution, if such a method exists, and is possible and allowed, and also by the right to dissolution by payment which an individual co-owner can have on the basis of legal transaction or law.
However, if the court is not bound by the method of dissolution, then the court shall dissolve joint ownership in a non-contentious proceeding, i.e. divide the real estate by physical division, payment or civil division.

Geometric division of real estate

The geometric division of real state is done only if it is possible to divide the real estate into several smaller parcels of land so that each co-owner acquires a newly created parcel in proportion to their co-ownership share. When performing a geometric division of the real estate, the court may establish an easement and a real encumbrance on other parts of the real estate, if this is necessary for the use or exploitation of the part being separated in the division.

However, if the court determines that the geometric division of the real estate is not possible without significantly reducing its value, the court will decide to sell the property at a public auction or in another suitable way, and divide the resulting amount proportionately among the co-owners (civil division).

The right to the division of the real estate by payment

According to the Act, a co-owner has the right to partition of real estate by payment if this is specifically determined by law or legal transaction, or if it seems probable that there is a particularly serious reason to do so, the court shall order that such co-owner shall receive the whole property and that they shall pay to co-owners an amount that corresponds to the value of their parts within a period determined by the court according to the circumstances.

In this case, the other co-owners shall have a right of lien on the thing which was awarded to the co-owner seeking the dissolution until they receive the payment. If he fails to pay them within the deadline, they can demand fulfilment or payment from the value of the pledge, and they can request that the decision on the dissolution be annulled by payment . However, co-owners who jointly hold at least nine-tents, do not have to present a particularly serious reason as probable.