Joint property owner opposed, now what?

Whether you bought a real estate property for a VOF you want to dissolve, or bought a property together with the partner you are not married to: it may happen that you no longer want to own the property together. You are then not forced to remain owners together until you agree to sell. In fact, according to established case law, no one can be forced to remain part owner of a community. To prevent this, the legislator has (among other things) introduced the articles 3:174 to and 3:185 BW were created. There it is described how distribution of common property in its operation.

When does a community exist?

A community of property exists when it belongs to more than one owner. This can occur, for example, when two or more children inherit property. Consider also the situation where two partners jointly own a home. Another example of a community is when investors buy a property jointly and then renovate it and sell it or rent it out.

It may be that the owners of the property (the partners in the community) become at odds and (other) a partner refuses to cooperate in the sale of that property. By virtue of Article 3:170 paragraph 3 BW the partners are in principle only jointly authorized to dispose of a common property. There are then several ways to still be able to sell the property.

Authorization to sell property without cooperation shareholder

First of all, by relying on Article 3:174 of the Civil Code, you can ask the court for authorization to sell the property. That article in fact constitutes an exception to the main rule of article 3:170 BW that partners are only jointly competent. Pursuant to this article, a joint owner can request the court to authorize him, for the payment of a debt due by the community or for other important reasons, to dispose of the common property. Monetization also includes alienation (sale and delivery).

The ’s-Hertogenbosch Court of Appeal considered in its ruling of April 28, 2010 (ECLI:NL:GHSHE:2010:BM3029):

“The underlying idea of article 3:174 of the Civil Code is to offer the joint owner the possibility, by means of a procedure of a simple nature, a procedure that takes much less time than a (partition of the estate) lawsuit, to come to the assertion of the community property, such for the satisfaction of a debt coming for the account of the community or for other important reasons.

A factor in this, of course, is that, in principle, sharers cannot be forced to remain in a community against their will, even an obligatorily divided community.”

Substantial reason to demand sale of joint property

An example of a weighty reason within the meaning of Article 3:174 of the Civil Code is the long-term vacancy of the dwelling, as a result of which depreciation occurs. But also the rising costs of the house (think of WOZ and mortgage charges) and the non-constructive attitude of a partner can constitute a weighty reason. Court of Appeal of ’s-Hertogenbosch June 10, 1998 (ECLI:NL:GHSHE:1998:AC1516 / NJ1999, 501) ruled that:

“4.1.4.1 In the opinion of the court of appeal, there are - certainly now - weighty reasons in the sense of article 3:174 BW, which - if no reasonable possibilities to separate the immovable property or part thereof to the appellant in the short term arise - justify granting the authorization requested by the respondent.

4.1.4.2 Lengthy discussions between the parties, including during the course of the appeal proceedings, did not result in agreement between the parties on a method of partition of the real estate or part thereof to the appellant acceptable to each of them.

4.1.4.3 As a result, vacancy and lack of maintenance have already existed for a series of years. Appellant has not refuted that a burglary has already occurred in the bungalow and that, due to vacancy, there is a chance of a repeat burglary.

4.1.4.4 The risk of damage to the immovable property and of reduction in its value is - given that factual situation - so great that the defendants cannot reasonably be required to bear that risk any longer.

4.1.4.5 Appellant has not shown or made it plausible, that she has or can have the financial resources to have the real estate in its entirety or the part of it desired by appellant separated to herself in the near future.”

Claim for partition pursuant to Article 3:185 of the Civil Code

Another route is that of Article 3:185 of the Civil Code. Pursuant to that article, the court can determine the manner of distribution or determine the division itself, if the sharers cannot agree on it.

Under Article 3:182 of the Civil Code, there is a distribution if it concerns a legal act to which all the partners cooperate and pursuant to which one or more partners shall acquire a good to the exclusion of the other(s). Therefore, the sale of a common asset by the partners to a third party does not in principle constitute a partition. However, under Article 3:185 paragraph 2 sub c of the Civil Code, there is a division if the property (or a part thereof) is sold in a manner determined by the court and the net proceeds thereof are divided.

The court must consider the interests of the parties and the public interest in assessing such a claim in equity.

Such a claim may also be coupled with the fact that if the shareholder fails to cooperate in the partition ordered by judgment, the judgment takes the place of the part of the deed of delivery in which the participant cooperates. This is a claim within the meaning of Article 3:300(2) of the Dutch Civil Code. The District Court of Rotterdam granted such a claim on May 18, 2016 (ECLI:NL:RBROT:2016:3787) with the following consideration:

“5.3. determines that, in the event that the husband will not cooperate in the sale and delivery of the house within one day after service of this judgment, this judgment will, pursuant to Article 3:300 paragraph 2 of the Civil Code, replace a deed drawn up in lawful form for the signature by the husband of the contract of sale, as well as the deed of delivery to be drawn up by the notary, ...”

Property division is a legal technicality

The division of real estate is a legal technicality. Therefore, claiming partition of a joint real estate property requires a lawyer. Therefore, contact an attorney for real estate law at Lexys Lawyers to get proper advice.