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CO-OWNERSHIP DISSOLUTION

Regularly, after a certain legacy proceeding is over, rightful heirs become co-owners of testators’ real estates, whether land or house i.e. apartment. In order to valorize his/her inheritance, like for example to rent, sell or pawn it, an heir must be the owner in whole (1/1). Therefore, co-owners can try to divide the land or the house by an agreement, so that every co-owner acquires his/her part of the real-estate in whole. However, if it is not possible to reach such agreement between co-owners, the co-owners are entitled to initiate a court proceeding for co-ownership dissolution.

The court shall, in this proceeding, dissolve the co-ownership by physical division, redemption or civil division. Physical (geometrical) division of land shall be carried out only if it is possible to divide land parcels in smaller parcels so that every co-owner acquires a new parcel in proportion to his/her co-owner part. Physical division of a building is carried out if it is possible to divide the building i.e. to create more independent usage units (e.g. so that every unit has its own entrance from the public road, toilette and kitchen).

Next possibility is to dissolve the co-ownership by redemption, so that one co-owner acquires the real estate in question entirely, and at the same time he/she pays out other co-owners according to their co-owner part. Co-owners who own at least 9/10 of the real estate in question always have the possibility to dissolve the co-ownership by redemption towards other co-owners (whose co-owner part is 1/10 or less)

If it is determined that it is not possible to dissolve the co-ownership by physical division, the court shall carry out the procedure of civil division, so that the real estate in question shall be sold on a public auction or in another appropriate way, and the amount gained by such sale shall be divided among co-owners according to the co-owners parts. The value of the real estate in question must be determined by the tax administration or the court expert and then the court sets the date for the auction hearing in order to sell the real estate. On the first auction hearing the price of the real estate may drop up to 2/3 of the estimated real estate value, and on the second auction hearing up to 1/3 of the estimated real estate value.