AK Polverini Strnad: Property should have only one owner. What are the risks of co-ownership?
Co-ownership often works within a family, where it can, for example, be a way to acquire property at a lower cost. However, it usually arises rather "involuntarily" in the context of inheritance proceedings. However, practical examples show that there is also the possibility of one of the co-owners losing their share. According to attorney Pavel Strnad of the Polverini Strnad Law Firm, a property should ideally have only one owner. Therefore, it is a good idea to resolve the legal protection of the property in time and to settle the co-ownership, or at least to carefully contractually regulate the rules of its functioning, thus preventing problems. Better still, you can avoid co-ownership altogether, for example by making a will. It is often the co-ownership of heirs that causes disputes.
"Even though co-ownership may not seem problematic at first, it is quite common for conflicts of opinion to arise between co-owners after a certain period of time. In the case of real estate, these usually concern the way of its use and care, necessary or unnecessary investments, and often damage interpersonal relations within the whole family," says Pavel Strnad, an attorney at law from Polverini Strnad.
The sole owner can dispose of his property freely within the limits set by the legal order. Whereas a co-owner is limited by the rights of every other co-owner of the property. In co-ownership, the co-owners decide according to the size of their shares. They decide on ordinary management by a majority vote, while a 2/3 vote is needed to decide on important matters - such as improving the condition of the property or changing the way it is used. In exceptional cases (encumbrances on the common property, long-term restrictions on the rights of the co-owners), unanimity of the co-owners is even required.
"There is a huge risk that the co-owners will not agree on the management. If you are, for example, one of three co-owners of a property where each has an equal one-third share, and you intend to rent out the property, the other co-owners will simply block you," explains attorney Pavel Strnad of the Polverini Strnad Law Firm.
Co-ownership often arises as a result of a person's death. Then his heirs enter the role of co-owners by inheriting part of the property. "The heirs then have to resolve disputes between themselves as to what to do with the property. It would be enough to prevent such situations - in the context of legal protection of property, it is advisable to strictly bequeath real estate to a single heir, or to establish rules on how the heirs should co-own the real estate and especially what to do in the event of a dispute," points out Pavel Strnad of the Polverini Strnad Law Firm.
Another risk is the so-called solidarity of co-owners. Although the management and disposal of real estate is usually decided by a majority vote, co-owners are jointly and severally entitled and obliged to legal actions. A creditor even has the right to enforce his claim against any of them. This can lead to situations where, for example, the majority co-owners vote to upgrade the house and the costs are borne by all - even those who did not agree to the upgrade - or a long and costly court case arises. There is also the risk of possible dissolution of the co-ownership or division of the common property if the co-owners do not agree. This often happens. In such a case, the court will again decide on the application of one of the co-owners.
"Such situations must be prevented in time. The ideal is to draw up a will so that the co-ownership of the heirs does not occur at all. However, if it already arises during the succession, the Civil Code allows for an easy settlement of the relationship. For a period of six months after the creation of co-ownership, the co-owners have a pre-emptive right to their shares. After that time, they lose this right," concludes Pavel Strnad.