PART II: CONDOMINIUM DISSOLUTION SPAIN.
Dear clients and readers,
Have you bought a property in Spain with someone else? Do you wish to terminate the situation of joint ownership? Does the joint tenant refuse to reach an amicable agreement?
In the affirmative case, we are sure you will find this article of your interest. As specialized property litigation lawyers, we frequently come across these kinds of legal consultations.
In fact, due to the important legal implications of this particular issue, we have considered it appropriate to write this article, in 2 separate parts. Considering that we have received a very positive review after posting the first part, we have considered it appropriate to complement the information already provided by writing this second part.
THE FACTS OF THE CASE IN A NUTSHELL
If you might probably remember we explained in PART I about a very challenging case, regarding a person who bought a country house without realizing that the plot of land where the dwelling was situated was not segregated from the bigger “mother” plot, which actually belonged to 2 additional people unrelated to the vendor. As a result, our client was in fact sharing 1/3 ownership of everything, whilst the 2 other people also shared 2/3 ownership of her own house. Consequently, our client asked our firm about the best way to terminate that situation of co-ownership with the rest of the owners. In other words, the problem was how to remove the mention in the client’s deeds about the 1/3 ownership and how to replace it with a 100% ownership percentage.
Due to the fact that the negotiation option was not feasible at all, due to the stubborn refusal of the rest of the owners to reach an amicable agreement with our client, the only remaining alternative was the litigation option.
“NON-FRIENDLY OPTION OR CONTENTIOUS”. C.D THROUGH THE COURT APPLICATION PROCESS “ or also called Forced Condominium Dissolution of Joint Property Ownership” (DJPO).
The litigation route is the only legal feasible way if for example, it might be impossible to locate and contact the rest of the joint owners (ie case of death), or if for example, one of the co-owners refuses to sell or buy the client’s ownership share.
This is when a contentious DJPO comes into play. It unfortunately involves protracted litigation. There may be cases in which one of the joint owners may wish to terminate the joint ownership for good and sell the property. Fellow co-owners, for whatever reason, may turn down the proposal to sell the property as a whole and likewise may refuse to buy him out. This will result in a bitter gridlock that will require submitting the applications through the courts.
To bypass the deadlock, any joint owner is entitled to force a DJPO through a competent law court (Arts 406 and 1062 of the Spanish Civil Code). The court’s ruling will overrule any dissent and the asset will be disposed of regardless of opposition from fellow co-owners.
However, a forced dissolution through a law court is only advisable as a last resort wherein the disagreement is serious resulting in a protracted stalemate. The reason is that all joint owners stand to lose significantly in following it. Sadly, at times, this may be the only legal solution to bring an end to an ongoing co-ownership quarrel.
Finally, once the court’s decision is rendered, you’ll need to notarize it at the notary office, so the new re-arranged ownership will then be lodged at the Land Registry after the associated taxes are settled.
A Condominium Dissolution of Joint Property Ownership (C.D.) is optimal to mitigate a buyer’s tax burden, much more than a donation for example. In fact, you save 86% in taxes, or more, in a legal manner.
A non-contentious C.D. works almost like a conveyance and can be arranged within a few weeks providing both parties agree to it. However, when the non-contentious CD is NOT feasible, then the court option will be unavoidable. However, provided that there is no opposition from the rest of the owners, the court process might be satisfactorily resolved in around 12-15 months (depending on the allocation to the competent court).
HOW TO CONTACT US FOR FURTHER SPECIFIC ADVICE?
We hope this information is useful. Remember that this is not intended to be specific legal advice, just a general overview. As independent lawyers, we can help you both by assisting you with all property issues as well as carrying out a comprehensive background legal search on a property, if required.
Should you be interested in receiving more specific information, (either about this particular subject or any other), you can contact our firm in several ways:
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Finally, thank you very much for your attention, and in case you might have any questions or doubts at all, again please do not hesitate to contact us. We will be glad to help you!
We look forward to helping you and the benefit of our “know-how”.
Mr Oscar Ricor
“NON-PRACTISING ENGLISH SOLICITOR IN ENGLAND AND WALES”, under the “Solicitors Regulation Authority” (SRA) SRA number 519196 and practising Spanish Solicitor