Share ownership and rules for its alienation

With the daily development of economic relations between people, cases of acquiring not only a separate real estate object, but also its share, are not uncommon.

What is meant by shared ownership?

A shared ownership is a movable or immovable property owned by several people, divided into specific shares of each of the owners. Such property places on its owner not only the right to receive certain revenues or profits in relation to its share, but also imposes obligations on it to repay expenses in respect of its share.

The share ownership is usually expressed in percentage or share ratio (for example: 1/5 share of the house).

The acquisition of property that is a shared property, at first glance, does not differ from the sale of real estate, in which one owner, however, it is only at first glance. Legislation stipulates the norms, in connection with which the sale of shared ownership may be delayed or not taken place at all.

The norms of the Civil Code enshrined the pre-emptive right to purchase a sold or replaced real estate object (house, dacha, garage, apartment, etc.). Such a right occurs only when a paid transaction is made, if the equity ownership is granted, the rule on preferential acquisition is not applied.

If one of the share owners intends to alienate their share of the property to an unauthorized person, then he must first inform about the alleged transaction of the co-owners of this property, detailing the cost of the sale and its terms. After that, the remaining shareholders can either acquire an alienated stake, or refuse such an acquisition.

If any of the co-investors expresses a desire to buy a share of the alienated real estate belonging to the Seller, according to the conditions set by the Seller, the Seller shall not be entitled to refuse. In the process of acquisition, the equity ownership of such an interest-holder will increase with respect to other co-owners.

In the event that the buyer of the alienated real estate is a co-owner, and not an outsider, then it is not required to notify other co-investors on the law.

If, however, the joint-stock company or co-owners refused to purchase the stake offered by it, the transaction can be executed with the prospective buyer. However, in order to avoid possible subsequent litigation or the recognition of the transaction as invalid, the Seller must notify the co-owners in a proper way by sending them a written notice.

Having received a written notice, the co-owner, who does not intend to purchase the proposed share, is obliged to issue a written waiver of the pre-emptive right to purchase from the notary. Such a refusal must be executed before the transaction is concluded or immediately upon its completion.

When registering a transaction in which the property is a shared ownership, in addition to the waiver of the right to purchase, it is necessary to collect a standard list of documents: the passports of all participants in the transaction; Documents confirming possession of immovable property (certificate of inheritance, contract of donation, privatization, rent, purchase and sale, etc.); An extract from the Bureau of Technical Inventory for a part of immovable property; If a residential premise is sold, it is necessary to present a certificate confirming the presence / absence of registered persons in immovable property; All concomitant consent (consent of the spouse, family members, guardianship authorities).

If the object of the transaction is a part of the house with the land, it is necessary to take care not only of the properly executed documents for the part of the house, but also of the documents for the part of the land plot.