In this article, we will explore the steps necessary to dissolve a community of property, both in situations of agreement between the co-owners and when there are disagreements. In addition, we will address special situations such as the dissolution of community property between siblings or with the award to one of the co-owners.
What is a community of property?
Index of contents
To understand it better, a community of property is when several people share the ownership of an asset or right. In this type of co-ownership, each owner has an abstract share of the property, which means that he or she does not have a physical part of the property, but a percentage of the ownership. A more practical example of a community of property could be the co-ownership of a house by several persons.
In relation to the different types of co-ownership, the most common case is that of community of property on a freehold basis, which implies full ownership of the property. However, there are other modalities, such as joint ownership of the bare ownership, in which ownership of the property is held, but there is no right to use it, and usufruct, which grants the right to use and enjoy the property, although one is not the owner.
Common situations that give rise to the dissolution of the community of goods
There are several situations that can lead to the dissolution of a community of property:
- Sale of all undivided shares to a third party: When all co-owners sell their share to a person outside the community property, the community property is automatically dissolved.
- Sale of all the shares to one of the co-owners: If one co-owner buys the shares of the others, the community of property is dissolved, and the property becomes the property of a single owner.
- Division of the common property: If the property can be divided, it is divided among the co-owners according to their percentage of ownership. If division is not possible, the property is sold and the price is divided among the co-owners.
- Loss or destruction of the property: If the property in question is irreversibly lost or destroyed, the community of property is also dissolved.
- Resignation of the co-owners from the common thing: Any co-owner has the right to renounce his or her share in the community property, which leads to the subsequent dissolution of the community property.
Steps to dissolve a community of property
Dissolving a community of property may involve different procedures, depending on whether the co-owners reach an agreement or whether it is necessary to resort to court proceedings. However, the first step will always be to settle debts with any type of Public Administration, if necessary. Below, we detail the steps to carry out this process.
Agreement between co-owners
If all co-owners agree, the dissolution of the community property will be relatively simple. There are two main ways of dissolution in this case:
- Division of the community property: If the property is divisible (e.g. land), one can proceed with the physical division of the property and allocate a share to each co-owner according to his or her percentage of ownership. In the case of real estate, this step usually requires a public deed.
- Sale to a third party: The co-owners may decide to sell the property to a person outside the community and divide the sale price in proportion to their share of ownership.
Dissolution without agreement between co-owners
If there is no agreement between the co-owners on how to dissolve the community property, the process will be complicated and it will be necessary to resort to judicial proceedings. Judicial dissolution involves the following steps:
- Out-of-court claim: Before going to court, it is recommended to try to reach an agreement through an out-of-court claim. This step may involve negotiations or mediation between the parties.
- Action for division of common property: If no agreement is reached, the next step is to file a lawsuit in court. This court procedure may culminate in the auction of the property, the price of which will be divided among the co-owners according to their share of ownership.
Dissolution of indivisible property
In the event that the common property is indivisible, as is often the case with a house, the co-owners will have to look for alternative solutions. There are two main options for dissolving a community property with indivisible assets:
- Agreement between the co-owners: If all co-owners agree, one of them can take the indivisible property in exchange for compensating the other co-owners for the value of their share. Another option is to sell the property to a third party and split the sale price.
- Judicial division: If there is no agreement between the co-owners, a judicial procedure for the division of the common property may be used. This process may involve the sale of the property at public auction.
Dissolution of community property between siblings
In the case of dissolution of a community property between siblings, the situation is often more complex due to the family relationship. If there is no agreement between the siblings on how to proceed with the community property, the steps described above will be followed, which could involve the sale of the property and the division of the sale price. In some cases, one of the siblings may acquire the property, compensating the others.
What to do if the property cannot be divided?
If the property is not divisible, the most common solution is to sell it to a third party. However, if the co-owners cannot reach an agreement, court proceedings are the last resort. This procedure can be lengthy and costly, so it is advisable to try to reach an agreement before going to court.
The dissolution of a community of property is a process that can be carried out amicably between the co-owners or, failing that, by means of legal proceedings.
It is therefore important to consider the different options available, depending on the nature of the property and whether or not the co-owners are in agreement.
In any case, the dissolution of the community of property must be properly managed to avoid conflicts and ensure an equitable distribution of the property or its price. At LEIALTA we can help you to manage this type of situation in the simplest way possible. Therefore, do not hesitate to contact us if you need to optimise the management of your assets.
