Community ownership can arise in several ways. After divorce, one of the partners can continue to live in the house, while the household effects have already been divided. The house (and the mortgage debt) then remains in common. This also occurs among unmarried people. Although cohabitants do not share all their property, they can buy a house together and sign for the mortgage together. A common property can also arise from an inheritance (an estate or undivided estate). In that situation, there can also be multiple owners. Co-owners are indicated by the word partners.
What is the legal meaning of “community”?
Community is the legal term for joint ownership of, for example, a house or land with everything that goes with it (including a mortgage). ) regularly. Marriage, one of the ways in which communal property can arise, is in Book 1 of the Civil Code and the law of succession is regulated in Book 4 of the Civil Code. There is almost nothing in the law about cohabitants, but they can become joint owners on the basis of contract law (Book 6 of the Dutch Civil Code). This is then stated in the title deed of the notary. Another possibility is that partners or investors jointly own a business or investment property.
What if you want to divide?
The basic principle of the law is that “no one has to remain in a joint estate against his will”. You must therefore always be able to get out and transfer your share in the common good to someone else: either to a partner or co-owner (this is called “allocation”), or to a third party (distribution by sale on the free market). The law therefore makes division possible, even if it is against the wishes of one of the co-owners.
Interests may differ
The personal interests of the partners can be quite different. After a divorce, for example, it can happen that one partner with children wants to stay in the house while he or she cannot or does not want to buy out the other. This in turn limits the other person’s ability to buy a new house, because mortgage banks count the debt for the old house. In the case of an estate, it may happen that the joint management (in the case of rental) or the shared use no longer runs smoothly. One heir wants to get out, the other heir wants to keep the community intact or has no money for the buyout.
How should you divide?
You only need a lawyer for a distribution case if you cannot reach an agreement among yourselves. If you do manage to find a solution, you can make an appointment with each other and carry it out. With registered property you still have to go to the notary for a deed of division. If you want to determine the value of the property to be divided, you can together give an assignment to an appraiser.
Division proceedings in court: takeover
A division procedure at the court is necessary if you cannot reach an agreement. The case is started by the party that wants to get out of the community. This party formulates the requirement. In the proceedings, the counterparty will have to indicate whether he or she is able to buy out the other party and take over the property. If this is feasible, the (surplus) value must be determined. This can be done through appraisers. Half of the (surplus) value is the amount to be paid for the buyout. In addition, the new owner must ensure that the mortgage is no longer in the name of the partner who is leaving the community. This can be done by transferring through another bank or by continuing the mortgage, if this bank discharges the departing owner from his joint and several liability for the mortgage debt.
Division through the courts: forced sale
If it appears during the proceedings that the other owner is unable to finance the buyout, then the only option is to sell the common property and then divide the proceeds. In (very) exceptional cases, the judge can postpone the division for a few years . This is rare. Usually a few years have passed before the case is brought to court.
The judge makes a binding decision on the division. That decision can be enforced. It very occasionally happens that the co-owner still does not want to cooperate. For example, because he does not show up at the notary to sign the deed of division. Staying abroad also occurs. The judge can then appoint a compulsory representative and/or determine that his judgment “ substitutes ” for the signature of the opposing party. Various other means can also be applied to the judgment. For example, an authorization to the claimant to arrange the sale through a broker, a conviction of the resident to cooperate in viewings, and so on.