How to partition your tenancy in common

Christos Iliopoulos, attorney at the Supreme Court of Greece, gives valuable advice to those who co-own properties.

Someone may obtain a right of co-ownership (or tenancy in common) on a property located in Greece. This may be the result of an inheritance succession, either by a Will or intestate, where more heirs inherit one or more real estate properties.

Or, it may be the legal consequence of willingly purchasing a percentage of a real estate interest on immovable property, along with one or more persons.

One of the options presented to a co-owner (tenant in common) of such a property is to continue the tenancy in common, exercising his or her rights, which include an unrestricted right of access to the property, the right to enjoy the property on an equal basis along with the other co-owners, and the right to share any income generated by the common property, on a pro-rata basis, according to his/her percentage of ownership of the property. If the property generates a yearly income of 10,000 euros, the tenant in common who owns 1/4 or 25 per cent undivided (ab indivisio) of the property, is entitled to 2,500 euros.

Under Greek law each co-owner is entitled to sell at will, at any time his or her share on the property, without any restriction, even if his or her share is less than 50 per cent, or very small.

The other co-owners cannot force the owner of a minority share to sell or retain ownership, or sell to a specific third party, possibly jointly with the others, if the minority co-owner is not willing to do it. The co-owner can sell his share, even if this is a small minority share, to any third party willing to purchase it, or gift it to anyone, without the consent of the majority owners.

However, those who own the majority of the shares on a jointly owned property in Greece are entitled to make the decisions on the everyday management of the common property.

This means that in case the tenants in common cannot form a consensus (common and voluntary agreement) on how to use or what to do with the common property, the majority is entitled to make the decision. For example, if the common property is a house in Greece, in case of lack of agreement, those who have the majority of the shares can decide whether the house will be rented out, or if it will be kept for the common use of all the co-owners, (summer recreation, etc.).

If the majority makes the decision to rent the property, the minority cannot object, unless the minority can prove that the suggested use (rental agreement) will result in serious damage to the common property. The minority co-owners are always entitled to their share on the rents and on any other income or proceeds, but they are also obliged to a pro-rata participation on the common expenses.

The majority co-owner can decide to keep the common property for his or her own use, but in that case he orshe must give to the minority co-owners their pro-rata share of a reasonable rent for this property. Any tenant in common, however small his or her percentage may be, is entitled at any time and without having to offer any particular reason, to seek the termination of the tenancy in common (destruction of the tenancy in common, is the term in the common law legal systems).

If the co-owners cannot agree on the sale of the common property to a third party, or to one of the co-owners, and if one of the co-owners cannot or does not want to sell his share to one of the other co-owners, any tenant in common, who owns a majority or minority share, can file a lawsuit action at the court in Greece demanding the forced termination of the tenancy in common.

The court will determine how the common property will be divided. It can rule for the physical division of the property between the joint owners (partition in kind), in which case each of the tenants in common will get the full and 100 per cent ownership of a specific portion of the bigger previously jointly-owned property. The distinct lots which will be formed, must have a value in accordance to the share their owners had on the common property.

Such partition in kind of the common property will be possible if the local zoning and city rules allow it. If the minimum size of a plot (zoning rules) in a particular part of Greece is 400 square meters, a common property of 2,000 square metres can be partitioned in kind between the four tenants in common who each have a 25 per cent share, because four independent plots will be formed, each having a surface of 500 square metres.

If, on the other hand, the zoning rules do not allow for a partition in kind, or if the common property cannot be divided according to the shares each co-owner has, or if it is an apartment, or a small plot, the only solution is the partition by sale, so that the proceeds are analogically distributed to the owners. If the owners disagree on which partition is more beneficiary to all of them, it is the court which will make the decision. Sometimes the court will request the report of an expert, (civil engineer) who will study the zoning and other rules applicable on the specific plot and present an expert’s report on the most logical solution.

*Christos Iliopoulos is an attorney at the Supreme Court of Greece, LL.M. e-mail: [email protected] [email protected]