Dividing a co-ownership: what are the main steps?
The status of co-ownership applies in a mandatory manner to any built property or group of built properties for total or partial residential use, the ownership of which is divided by lots between several persons. It follows from this imperative character that the request for the division of a co-ownership must necessarily be approved by the general meeting of co-owners (voluntary division) or by the judge (judicial division).
At the beginning, the initial objective of the division of co-ownership was to facilitate the management of large property complexes. Today the objectives have diversified (independence, creation of a co-ownership without a Syndic, reduction of the amount of charges, disagreement etc…). The law n°2014-366 of March 24, 2014 known as the “Alur Act” has even consecrated the splitting into volumes of complex real estate complexes.
In practice, only the preparation of a solid and complete division project allows to reach one’s objective.
First step: Feasibility study
The conditions of the split are set by article 28 I) of the law of July 10, 1965. They are three in number. The building must include several buildings, the division of the property of the ground must be possible and a request must be made to the general assembly which decides. This request can be made by several co-owners or by a single co-owner since the law n°2000-1208 of December 13, 2000 called “SRU law”.
The split may concern constructed buildings making up lots but also lots comprising the right to construct buildings (“transitional lot”). In any case, the building must be able to be removed to constitute a separate property without the need to carry out destructive work to do so.
The division of the land ownership must also be possible, this requires that the applicant for the withdrawal is not only the holder of an exclusive right of use and that the layout of the buildings allows the division of the initial land base into new and totally independent land units, which excludes the situation of enclave.
Second step: Constitution of the file
The general assembly of the initial syndicate decides on the material, legal and financial conditions required for the division, which requires the collection and presentation of a certain number of documents demonstrating that all the conditions of feasibility are met.
In practice, the applicants for the withdrawal must contact a certified geometrician and a notary, in order to modify the descriptive state of division and to draw up new co-ownership regulations including the new distribution of the tantièmes and charges.
Other documents are also gathered such as the plan with the new limits of co-ownership and the easements to be foreseen after the split, the budget of the split (expenses of the various protagonists, tax expenses) or the project of distribution of the debts and the debts of the initial syndicate etc…
This step is fundamental because if the general assembly has given its approval without the required documents or if the information provided was insufficient, the decision taken by the assembly will be null and void. Several decisions have already been rendered in this sense.
Third step: Obtaining the vote
If the request for withdrawal is initiated by several co-owners, a special meeting must first be convened to obtain a positive decision in principle. The decision must be taken by a majority of the votes of all the co-owners. This meeting cannot physically be held in the presence of a single applicant for withdrawal.
A general meeting must then be called to obtain a confirmatory vote. There are two options: put the question on the agenda of the annual general meeting or ask the Syndic to convene a meeting dedicated to this purpose. The general meeting decides by a majority of the votes of all the co-owners on the request formulated by the special meeting if applicable.
In either of these assemblies, the assembly is convened according to the ordinary conditions and if a co-owner has a share of the common portions greater than half, the number of votes he has is reduced to the sum of the votes of the other co-owners (article 22 I) of the law of July 10, 1965).
Fourth step: The appeal against the decision
If the applicants for withdrawal are not satisfied, they can contest the decision to refuse the withdrawal by bringing an action before the Court within two months of the notification of the minutes of the general assembly. The judicial split is provided for by article 29-8 of the law of July 10, 1965 (former article 29-4 of the same law). This requires the appointment of a provisional administrator, whose mission is to draw up a report containing the elements required for a voluntary split.
Article 29-8 of the aforementioned law refers to a situation in which “the management and the normal functioning of the co-ownership cannot be re-established otherwise”. The recourse seems to be limited to the sole hypothesis of a co-ownership in difficulty, however, the argument based on the abuse of the majority is developing in jurisprudence in order to obtain the annulment of the resolution refusing the withdrawal as well as damages.
It appears from the jurisprudence that “the recognition of an abuse of majority requires that some of the co-owners have obtained by manoeuvres a decision contrary to the collective interests or prejudicial to one or more co-owners. It is up to the person who invokes the abuse of majority to demonstrate that the resolution was acquired by fraudulent means or with malicious intent or that it is contrary to the common interest “. (Court of Appeal of Toulouse, 1st chamber section 1, March 4, 2019, n°17/00515)
The difficulty lies in the fact that no text currently gives the judge the power to judicially order the split. It is also only in the context of a co-ownership in difficulty that the judge can pronounce a volumetric division, hence the need to be assisted by a lawyer from the time of the birth of one’s demerger project in order to convince the recalcitrant co-owners and select the useful arguments before the judge.
Our lawyers will assist you throughout the settlement of the demerger. They are at your disposal to answer all your questions and to advise you. Our meetings can be held in person or by videoconference. You can make an appointment directly online at www.agn-avocats.com..
AGN AVOCATS – Real Estate Department
09 72 34 24 72