No one is required to remain in joint ownership

Have you just inherited a property with your brothers and sisters, or found yourself co-owning a home following a divorce? This situation of joint ownership (indivision), although it may seem restrictive, is never permanent. French law enshrines a fundamental principle: "no one can be required to remain in joint ownership". This rule gives you practical ways of ending this forced co-ownership and regaining control of your assets.

The fundamental principle: no one can be required to remain in joint ownership

A protective rule of public policy

Article 815 of the French Civil Code states clearly that "no one may be compelled to remain in joint ownership and partition may always be sought, unless it has been suspended by judgment or agreement". This provision is one of the pillars of property law in France.

The principle reflects a simple legal philosophy: nobody should have to endure indefinitely a situation of co-ownership they did not choose. Whether you are an heir, a former spouse or a co-owner for any other reason, you have an imprescriptible right to ask for the joint ownership to be brought to an end.

The most common situations of joint ownership

Joint ownership can arise in various situations:

• Succession: several heirs become owners of the same property
• Divorce: the former spouses remain co-owners of the family home
• Joint purchase: acquisition of a property by several people
• Incomplete gift with partition (donation-partage): allocation of a property to several beneficiaries

In all these cases, the right to end joint ownership applies without any restriction as to time limit or specific ground. The practical organisation of joint ownership and the ways of ending it are covered in our complete guide to joint ownership of property.

Exceptions to the principle: when joint ownership may be maintained

Joint ownership agreements

Although no one is required to remain in joint ownership permanently, the co-owners may temporarily waive this right. A joint ownership agreement (convention d'indivision) may thus suspend the exercise of the right to partition for a maximum period of five years, renewable.

The agreement must:

• Be signed by all the joint owners
• Comply with the maximum statutory term
• Set out how the property is to be managed

Judicial stay of partition

A judge may also order a stay of partition in certain exceptional circumstances, in particular where immediate partition would risk seriously harming the interests of an heir or jeopardising the operation of a family business.

The French Construction and Housing Code contains specific provisions for certain situations. Article R443-40 thus provides that "on the day fixed, if all the parties are of the view that joint ownership should be maintained for a fixed period, the judge of the tribunal d'instance shall record their agreement".

How to end joint ownership

Amicable partition: the preferred solution

Joint ownership may first be ended by agreement between all the co-owners. This solution has many advantages:

• Speed of implementation
• Lower costs
• Control of the process by the parties
• Flexibility in the terms of partition

Amicable partition may take several forms:

• Sale of the property and division of the price
• Allocation of the property to one of the joint owners, with compensation paid to the others
• Physical division, if the property lends itself to it

Using a notary

To secure an amicable partition, the involvement of a notary is generally necessary. The notary:

• Prepares the statement of liquidation of the joint ownership (état liquidatif)
• Calculates the rights of each joint owner
• Drafts the deed of partition
• Carries out the land registration formalities

Where agreement is impossible: the judicial route

If the co-owners cannot agree, judicial partition becomes unavoidable. Any joint owner may then apply to the court for the joint ownership to be dissolved. The obligations of joint owners, the conduct of judicial partition and the protection of creditors are set out in our article on partition of joint ownership.

The judicial partition procedure

The summons for partition

The procedure begins with a summons filed before the judicial court (tribunal judiciaire) of the place where the property is situated. The summons must be served on all the other joint owners and must contain:

• A precise identification of the jointly owned property
• Evidence that the claimant is a joint owner
• The terms of partition sought

The role of the supervising judge and the court-appointed notary

The court appoints a supervising judge (juge-commissaire) to oversee the partition operations and a court-appointed notary (notaire commis) to carry them out. These professionals work together to:

• Draw up the inventory of the jointly owned assets
• Carry out the necessary valuations
• Prepare the statement of liquidation
• Organise the partition in accordance with the legal rules

The different outcomes of judicial partition

Several solutions may be ordered by the judge:

Sale by public auction If no joint owner wishes to keep the property or has sufficient means to do so, the court orders a public sale. The sale price is then divided according to each person's rights. Where the property is held in equal shares, the licitation procedure (sale by auction between the joint owners) and the means of obtaining the agreement of a reluctant joint owner are set out in our article on selling a property held in 50/50 joint ownership.

Preferential allocation A joint owner may ask for the property to be allocated to him or her against payment of an equalisation payment (soulte) to the other co-owners. This solution often requires financing to be obtained.

Partition in kind Rarely applicable to real property, this solution consists in physically dividing the property between the joint owners.

The financial aspects of ending joint ownership

Valuing the property

Determining the value of the property is a crucial step. It may result from:

• An agreement between the parties
• A court-ordered expert report
• A valuation by a property professional

The joint ownership accounts

Before partition, the accounts of the joint ownership should be drawn up, taking into account:

• Expenses incurred by each joint owner
• Income received (rent, for example)
• Improvements made to the property
• Any debts

Article 815 of the French Civil Code provides that "each person's share in the joint ownership is increased in proportion to his or her contribution".

The costs of partition

Ending joint ownership gives rise to various costs:

• Notary's fees
• Property valuation costs
• Registration duties
• Any bailiff's and lawyer's fees

These costs are generally shared between the joint owners in proportion to their rights in the joint ownership.

The tax consequences

Partition duties

The partition of jointly owned property is subject to partition duties calculated on the net value of the assets partitioned. The rate varies according to the nature of the assets and the family relationship between the joint owners.

Capital gains on property

If the partition results in a sale, the joint owners may be liable to tax on property capital gains, unless an exemption applies (main residence, long period of ownership, etc.).

Tax planning

Certain strategies make it possible to limit the tax impact:

• Spreading the partition over time
• Use of family allowances
• Preferential allocation rather than sale

Practical advice for a successful exit from joint ownership

Anticipating and communicating

The key to success often lies in communication between the joint owners. It is advisable to:

• Explain one's motives clearly
• Look for solutions that satisfy everyone
• Call on a mediator if necessary
• Consult a French lawyer who practises in property law

Weighing the different options

Before starting court proceedings, all the alternatives should be considered:

• Buy-out of the shares by one of the joint owners
• Amicable sale on the open market
• Letting the property while waiting for more favourable market conditions

Getting support

The complexity of the applicable rules justifies being supported by experienced professionals. A French lawyer who practises in this area can help you to:

• Analyse your legal situation
• Negotiate with the other joint owners
• Defend your interests in the event of court proceedings
• Optimise the tax aspects of the transaction

The principle "no one can be required to remain in joint ownership" guarantees you a way out, whatever your situation. Whether you favour the amicable route or judicial partition, this fundamental freedom allows you to regain full control of your property assets. Do not hesitate to seek the input of a property law professional to secure your approach and optimise the terms of your exit from joint ownership.