Joint Ownership in Real Estate – What Is It?

Joint ownership in real estate occurs when ownership of a property is held by more than one person. The definition of real estate in Section 1 of the Land Law, 1969, is assets that cannot be moved, known as “immovable property”. Regarding the extent of ownership in real estate, the Land Law stipulates that the ownership of each owner extends to the entire property, so if a property is owned by 4 people, each of them owns a quarter of the entire property.

How Joint Ownership in Real Estate Is Created

Real estate can be jointly owned, either by a person’s free will (by signing a partnership agreement), or due to external circumstances that are not dependent on them at all, for example as a result of inheriting real estate that is jointly owned. Since joint ownership in real estate can be created without a person’s free will and since a partner may decide after some time that they no longer wish to be a partner in the property, the Land Law establishes the procedure for dissolution of joint ownership in real estate.

When Can a Person Demand Dissolution of Joint Ownership in Real Estate?

The Land Law recognizes the legitimate right of a person to demand dissolution of joint ownership in real estate whenever they wish, as it is not appropriate to force a person to remain a partner when they do not want to.

The importance that the legislator attributes to the right of dissolution of joint ownership in real estate can be learned from the provision of Section 37(b) of the Land Law, according to which when a real estate partnership agreement includes a provision that negates or limits the right to demand dissolution of joint ownership in real estate, the court may order the dissolution of the partnership after 3 years, if it seems just in the circumstances. Hence, the Land Law allows for dissolution of joint ownership in real estate, even when there is no agreement from all partners.

The Legal Procedure for Dissolution of Joint Ownership

When the partners determine in advance in the partnership agreement provisions regarding the manner of dissolution of joint ownership in real estate, the dissolution will be done according to their determination, subject to the provisions of the Planning and Building Law, 1965, and any other relevant legislation. When the partnership agreement does not specify how to perform dissolution of joint ownership in real estate, the Land Law determines the manner of dissolution:

• Dissolution of joint ownership in real estate will be done by physical division of the property among
  the partners (division in kind).
• If it is not possible to divide the property among the partners, or if such a division
  is expected to cause significant loss to the partners,
• Dissolution of joint ownership in real estate will be done by selling the property and dividing the proceeds among
  the partners.

Additionally, if the property is suitable to be registered as a condominium, the court may decide that the dissolution of joint ownership in real estate will be done in the form of registering the property as a condominium and allocating apartments to the partners according to their relative shares in the property. Furthermore, the Land Law is aware of the concern that a partner’s desire for dissolution of joint ownership in real estate may significantly harm other partners or third parties and stipulates that dissolution of joint ownership in a residential apartment of a couple with minor children will be done on the condition that the spouse who has custody of the children has a suitable place of residence for them.

From 2.3.1995 Amendment No. 17 Official Gazette 1507 dated 2.3.1995 page 138 (Bill 2293)

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