In the case of joint ownership, a person may be legally obligated to cooperate in dividing ownership of a home, but may not do so or may not want to, or the person may be lost or unreachable. What can be done about this legally?
Obligation to cooperate
We assume for the purposes of this article that an obligation has arisen to cooperate in the dissolution of joint property by putting it in the name of the other party. This obligation may have arisen in many ways. For example, in the case of divorce or relationship breakdown, a covenant may have been made with firm agreements on the allocation of the home. This goes to one of the ex-partners and in return he has to pay half of the surplus value and take over the mortgage, as is usual in the case of division. It may also be that the court has issued a ruling that leads to the same obligations.
Partitioning of an estate
If a joint home is to be divided, the notary must be involved. A home is a “registered property,” and common ownership of a registered property must be transferred to the name of the owner via a deed from the notary. So you can’t do that with a divorce covenant or a mutual contract.
Party to cooperate is not there
If the obligation is fixed, but the other party does not come or does not want to, what to do? An original signature must be placed at the notary, or there will be no transfer. But the other may be lost, going on a world tour, keeping himself unreachable, making unreasonable new demands, or just plain obstructionist. Even when someone is neatly bought out and receives money, we have handled cases in our office where the co-owner could not be found while the other owner still wants to go ahead with the division, for example because the bank is (finally) willing to finance. But what we see most is that the party obliged to cooperate sees his or her chance to make financial demands when the other needs cooperation to transfer the house. This may be unreasonable if the agreements on the breakup have already been imposed by the court or have been made between the parties previously, and only need to be fulfilled. Consider an ex who suddenly demands an increase in alimony when alimony is a different obligation than cooperating in the transfer of the joint home.
Solution is in the law
The law provides a special arrangement for forcing an opposing party who (most likely) will not show up at the notary’s office anyway. This regulation is found in Art. 3:300 of the Civil Code: “(1)If a person is bound to perform a legal act in relation to another, the court may, unless the nature of the legal act prevents it, at the request of the person entitled to the act, determine that his judgment shall have the same force as an instrument drawn up in lawful form by the person bound to perform the legal act, or that a representative to be appointed by him shall perform the act. If the judge appoints a representative, he may stipulate that the act to be performed by him shall require his approval. (2) If the defendant is required to execute a deed jointly with the plaintiff, the court may determine that its judgment shall supersede the deed or any part thereof.”
We have had multiple experiences with this provision of the law. We usually first ask the notary to prepare a draft distribution deed. Of course, we carefully check whether the obligation to cooperate in the distribution is legally hard. If so, we will go to the judge in summary proceedings to get a quick ruling. We then ask the court to apply Art. 3:300 of the Civil Code. The second paragraph of the article of law is crucial. It states that the judge may determine that his ruling is in lieu of the notary deed. This should be read to mean that the judge’s ruling replaces the signature of the co-owner, who should actually have appeared at the notary himself or herself to place his or her signature on the partition deed.
Notary can deliver!
If the court case goes according to plan (in this situation the other party usually does not show up so the judge grants the claim in absentia) then the judgment is first “served” (officially announced) through the bailiff and then we send the documents to the notary, who can now finalize the delivery deed. Even if the co-owner’s signature is missing, the distribution can still validly proceed and cannot be reversed. This solution also works if the property is not to be in the name of one of the co-owners but is to be delivered to a third party after sale.
What about the money?
The person who becomes sole owner of the property may have to pay a sum of money because of the buyout. To the disbursement of that money, the co-owner who is lost or uncooperative is entitled. We have solved this in practice by having a third-party money foundation appointed by the court as the custodian, with the obligation to make the necessary effort to pay the money to the entitled party. That finally worked out. Incidentally, not every division requires the other to be bought out. For example, it is possible that it has already received other property at the time of the divorce (closed purse). It is even possible that the party who becomes sole owner is still owed an amount by the party who is bought out, that depends but not on the other financial obligations arising from the distribution. In general, however, it is advisable not to wait too long to transfer a property after agreements have been made about it. In fact, complications often arise when the settlement is left in place. But that does not diminish the possibility of enforcing the agreements made if necessary.