Co-ownership in shares

What it means

Co-ownership in shares means that several people own one thing, each with a defined share, such as half a house or a third of a plot. The share expresses how far each co-owner takes part in the rights and duties attached to the thing, yet each may use the thing as a whole in proportion to their share.

It differs from the community property of spouses, where no shares are defined and the property belongs to the spouses jointly and indivisibly. For real estate, the shares are recorded in the title deed extract and expressed as fractions.

Ordinary management of the thing is decided by a majority counted by size of share. For an important change to the thing, outvoted co-owners may ask a court to decide. Typical cases are inheritance, a joint purchase of property by several people, and ownership of the common parts of a block of flats.

How it works in practice

A co-owner may sell or give away their share. In certain cases, however, the law gives the other co-owners a pre-emption right, with exceptions such as a transfer to a close person. Before selling, it is therefore necessary to establish whether and to whom the share must first be offered.

Co-owners can agree on use, such as who occupies which part of a house and who pays which costs. If they cannot agree, the co-ownership can be dissolved and settled by agreement or by a court: by physical division, by assigning the thing to one co-owner against compensation, or by sale and division of the proceeds.

In business, co-ownership in shares is common for rented property. Income and expenses are then split according to the shares and each co-owner pays tax on their part. A change of co-owners must be registered in the land register on the basis of an application for registration.

What to watch out for

A share in land or a house may be burdened by a lien or an easement in favour of someone else. Before buying a share, check the title deed extract, any existing agreements between the co-owners and relations with neighbouring plots.

Towards third parties, co-owners are often jointly and severally liable for obligations relating to the common thing, such as repairing the roof. Anyone who pays more than their share can claim reimbursement from the others, but recovery tends to be slow.