Co-ownership of property can be a really good solution to acquiring expensive assets together with like-minded friends. But what happens when your circumstances or relationships change? If your agreement is based on a hand-shake, are you joined at the hip until death do you part?
So the situation is this: you have co-ownership of a property with two friends. You have tried on numerous occasions to convince your friends to sell the property, but they refuse every time.
You cannot see the value in keeping the property at this time, so the question is: Is there a way to compel the other co-owners to sell?
The answer depends on whether a co-ownership agreement has been drafted and signed by all co-owners.
A co-ownership agreement is a document which protects the rights and finances of all co-owners. Co-ownership agreements should stipulate specific instructions concerning:
If there is no co-ownership agreement at this time, then you may benefit from the distinctive feature of co-ownership in property.
This feature which is unique to co-ownership of property compared to all other forms of ownership including associations or partnerships) is that you have the right to sell your share of the property freely, without any reference to the other co-owners.
However, you can only exercise this right if there is no prior co-ownership agreement concluded between all co-owners.
If you choose to exercise your right to freely sell your share it could cause a situation where your friends are forced into a co-ownership agreement with a stranger or an individual whom they disapprove of. This could potentially be a cause of strain to your relationship with your friends.
Here you may find yourself in a situation with competing interests. You cannot forcibly convince your co-owners to sell their shares of the property against their will. At the same time, your co-owners cannot force you to remain a co-owner of the property if you do not wish to.
The inexpensive and least time-consuming route to take would involve convincing the other co-owners to agree to buy your share at a market-related price (providing they have the resources available).
It is vital to try your utmost to resolve this sort of dispute amicably. If you do decide to litigate, the South African courts will ask all co-owners to present the steps taken previously to resolve the issue.
If it is not possible to resolve the issue amicably, South African law allows you the right to apply via the court for a partition of the property.
Partition of the property includes having the court divide and physically split the property among the co-owners. The divide is created in accordance to the value of the property and each co-owners share in it.
If a partition of the property is not practical; the court retains the right to decide on an alternative solution that it deems acceptable.
Therefore it could be decided that:
The court will state an order which is just and equitable for all co-owners after reviewing the circumstances of the situation.
If you are looking into entering into the co-ownership of a property, it is important to seek legal assistance to discuss every available structure and entity which would best suit your needs.
The attorneys at Van Deventer and Van Deventer Incorporated are willing and able to supply you with all the legal guidance and advice needed to navigate any procedure concerning the co-ownership of property.
Contact us for expert legal advice concerning real estate.
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