Each co-owner has the right to terminate co-ownership, if possible and permitted, and this right does not expire.
Co-ownership can be terminated through an agreement (voluntary termination) or through the court (judicial termination).
This is a non-litigation proceeding, and in the event of a dispute regarding the subject of the division, the scope of the joint property, the rights of individual co-owners or the size of their shares, the court will direct the party to a civil procedure.
We will further elaborate two ways of co-ownership dissolution – physical partition and the establishment of condominium ownership.
Physical division
The court is not bound by strict legal provisions or valid agreements of the parties regarding the method of partition – divisible movable property will be divided physically, and real estate geometrically.
Real estate is primarily divided geometrically, provided that such division does not reduce the value of the property.
Whether a geometric division is possible will be determined by expert evaluation, and the expert’s findings will be decisive for the further course of the procedure as the evaluation will determine the content and
method of division with the aim of forming independent economic units. Based on the parties’ proposal the expert conducts geometric division.
If such division is possible the next step will be to determine whether each party would receive a physical part of property that corresponds in value to their co-ownership share by implementing such division.
At this stage of the procedure, disagreements between the parties can arise,
since the decisive factor is the value (not the surface area) of the co-ownership share.
For example, if one party receives an apartment facing the sea and the other receives one facing the mountains – the surface area of the property will not be proportionate to the values of their co-ownership shares (considering the market value of the properties).
Due to such circumstances, geometric division is often not possible, and
co-ownership will be terminated through a civil division process – by selling the property at a public auction.
It is important to note that the court itself can propose a method of geometric division (which does not necessarily have to correspond to the proposals of the parties), and if the court’s proposal is possible without significantly reducing the value of the property, it will be carried out.
Condominium Ownership
One way to terminate joint ownership is through the establishment of condominium ownership, which is established by associating a specific ideal part with the ownership of a particular part of the joint property.
In practice, it is most often established on that part of the joint property that constitutes an independent usable unit (e.g., an apartment), but it can also be established on other parts of the property (e.g., terrace, attic, and basement rooms).
To implement condominium ownership, it is primarily necessary to obtain a condominium report prepared by a court-appointed construction expert or an authorized architect.
Based on the obtained report, the competent administrative authority for physical planning and construction issues a certificate on independent usable units.
Although the basic assumption for implementing this type of division is the unanimous decision of all co-owners, the judicial practice of the Supreme Court of the Republic of Croatia has shown that this is not always the case.
No co-owner of the property can withhold their consent to the establishment of ownership of a specific part for another co-owner who has an appropriate co-ownership share, unless the establishment of the new ownership of a specific part would annul or limit the rights already belonging to him based on his previously established ownership of a specific part.
Thus, in certain cases, the lack of consent of one co-owner can be compensated by a court decision.
It is important to note that the division does not affect the rights of third parties and co-owners who did not participate in the division, easement rights, mortgage rights, and other real rights will continue to burden the divided property.
After the division is carried out, the costs of the division are paid by the co-owners, proportionally to their co-ownership shares.