How to Get Out of Undivided Co-ownership?
- The legal definition of undivided co-ownership
- Undivided ownership: illustrations
- Purpose of undivided co-ownership in a real estate purchase
- Description of undivided co-ownership
Whether legal or conventional, undivided co-ownership has complex consequences that you must be aware of.
What is undivided co-ownership?
Undivided ownership is the legal situation in which several persons hold rights of the same kind – and in equal or unequal proportions – in the same property or the same body of property, without it being possible to identify each person’s share in the property(ies).
More simply, several persons are in undivided co-ownership when:
- they are together the owners of one or more of the same property(ies);
- They have joint use of one or more properties.
What are the legal implications?
When people are undivided, they each have rights to one or more of the same property(ies); in these conditions, several questions arise:
- Which acts can be performed by one co-divisor on the undivided property?
- Which actions require the agreement of all the co-divisors?
- Who must pay the undivided property expenses (work on the property, taxes, etc.)?
How to get out of undivided co-ownership?
These questions are regulated by the legal rules of undivided management, which can be arranged in an undivided agreement.
Undivided situation: illustrations
An undivided situation may result from the law or the choice of the co-owners.
Situations of undivided legal ownership:
A mass of property becomes the property of several persons without each person’s share is physically identifiable.
The co-divisors have intangible rights to the mass of property (and not to any particular property) until the property is divided.
Undivided property and inheritance: at the time of death, the heirs find themselves in undivided co-ownership; they each own a share of all the deceased’s property, as long as this property is not divided.
Divorce and undivided co-ownership: after a divorce, the spouses end up in undivided co-ownership; they each own 50% of the joint property but do not physically own it.
Conventional undivided situations:
- Several people decide that specific property belongs to them in common.
- Each co-divisor has rights to the property until the property is sold.
PACS and undivided: the partners decide that the goods acquired during the PACS belong to them both for half.
Purchase in undivided: several people buy together with the same good.
Necessary: the distribution of property rights on an undivided property is done according to the shares indicated in the acquisition deed and not according to the financing. Suppose two purchasers each buy an undivided property in half. In that case, they will have acquired the property in the same proportion without considering the property’s terms and sources of financing. The fact that one of the purchasers has contributed more than the other does not affect their respective ownership rights.
Definition of undivided co-ownership: the specific case of a real estate purchase
When several people buy real estate (land, apartment, etc.) together, the default system that applies – unless otherwise stipulated – is undivided co-ownership:
each co-dividend buyer holds a share of the undivided property;
without the claim of each being identified in kind.
Example: A and B buy a two-storey house in undivided co-ownership; A and B do not own a floor; they own the home together.
To buy undivided, you need:
- At least 2 people: regardless of their relationship, they can be cohabitants, PACS partners, relatives (cousins, brothers, etc.), friends, etc.
- Property: regardless of the nature of the property, it may be movable property (car, etc.) or real estate (house, land, apartment, etc.).
At the time of the acquisition, the notary indicates in the deed the financial contribution of each purchaser:
each purchaser owns the property up to his or her contribution;
If each person’s contribution is not specified in the deed of purchase, the purchasers are deemed to be equal owners.
The co-owners manage the property together, according to the rules of undivided management:
- they can occupy the property together, rent it out, or have it occupied by one of the co-divisors;
- Each co-divisor is liable for the debts relating to the property (charges, undivided loan, etc.) to the extent of his or her share in the undivided property.
Finally, to get out of the undivided co-ownership, the co-divisors can proceed to the undivided sale of the property.