Joint ownership (indivision)

Indivision (joint ownership) is ownership of the same property by several people. Each joint owner holds a share (one half, one third, 40 %) that corresponds to no physical part of the property: one does not own the kitchen or the first floor, one owns a fraction of everything. It most often arises from an inheritance, a divorce (between the dissolution of the marital community and the partition), or a purchase in common by unmarried partners. It is designed to be temporary: no one can be compelled to remain in joint ownership, and partition can always be demanded.

Pending partition, the life of the joint ownership follows precise rules: acts of administration are decided by a two-thirds majority of the shares, serious acts unanimously; the one who occupies the property alone owes an occupation indemnity; the one who has paid for works has a claim against the joint ownership.

Where the rule comes from

Articles 815 to 815-18 of the French Civil Code form the statutory regime; articles 1873-1 et seq. allow the parties to depart from it by a joint ownership agreement. Article 815-9 founds the occupation indemnity owed by a joint owner who has exclusive use of the property. Article 815-13 governs claims for expenses: a preservation expense is reimbursed in its amount, an improvement expense according to equity, having regard to the increase in the value of the property at the time of partition. Article 829 requires the assets to be valued at the date closest to the partition. Article 815-5-1 allows, subject to conditions, the sale of a jointly owned property by a two-thirds majority with the court’s authorisation.

In a valuation report

I provide the figures around which a joint ownership is settled: the market value of the property at the date closest to the partition, to calculate the equalising payment or fix the reserve price for a court-ordered sale; the market rental value, for the occupation indemnity, often reduced by an allowance reflecting the precariousness of the occupation; the increase in value brought by works, for the improvement claim, by comparing the value with and without the works. When I value an undivided share on its own, for instance for a sale to a third party or a tax calculation, I consider whether a discount is justified by the difficulty of selling a fraction of a property, taking care not to combine it with a discount that would reflect the same obstacle.

Example

Two brothers inherit a house valued at €240,000. The elder has occupied it alone for four years; the market rental value is €900 per month, reduced by 20 % for the precariousness of the occupation, giving an occupation indemnity of €720 per month and €34,560 in total. The younger paid €15,000 for roof works (a preservation expense), reimbursed in full. On partition, the elder keeps the house: he owes his brother half of €240,000, plus €15,000, less half of the occupation indemnity he owes to the joint ownership, the whole being settled in the account drawn up by the notaire (French civil-law notary).

Not to be confused with

Copropriété (co-ownership of a building) divides a building into private lots and common parts under the law of 1965. Division of ownership (démembrement) separates the usufruct from the bare ownership. The SCI (société civile immobilière, a French property-holding company) replaces joint ownership with company shares, with its own rules.