We are experts in enforcing a dissolution of joint ownership or a change of ownership in Spain.
What is a Dissolution of Joint Ownership ?
It is a legal process in Spain used to end co-ownership of a property when multiple owners wish to divide their shares. Instead of selling the property to a third party, one owner transfers their share to another co-owner, resulting in a single owner.
Key Aspects of the Process of Enforcing a Dissolution of Joint Ownership:
- When Is It Used?
o When co-owners (such as spouses, family members, or business partners) want to separate their ownership without selling the property.
o Common in divorce settlements, inheritance cases, or when one party wishes to buy out the other.
- Tax Benefits Compared to a Sale:
o Unlike a standard sale, which incurs Transfer Tax (ITP, typically 10% in the Valencia region), dissolution of joint ownership is subject to a 1.5% Stamp Duty (AJD) in most regions, making it a more tax-efficient option.
- Understanding the Legal Process of Enforcement: When co-owners of a property in Spain cannot agree on a dissolution of joint ownership, legal intervention may be necessary. Spanish law provides a clear framework for enforcing a dissolution through the courts. This ensures that no co-owner is forced to remain in joint ownership against their will. This legal action is particularly relevant in cases of divorce, inheritance disputes, or co-owners who refuse to cooperate. Molina Solicitors have dealt with many cases.
- What Happens When One Party Refuses to Dissolve Joint Ownership? If one or more co-owners refuse to agree on the dissolution, the other party can initiate legal proceedings to enforce the division or sale of the property. The Spanish Civil Code allows any co-owner to request judicial dissolution, ensuring that a fair resolution is reached through the courts.
The Legal Process of Enforcing Dissolution
- Attempting an Out-of-Court Settlement
Before initiating court proceedings, it is advisable to attempt negotiation. A formal legal notice (burofax) is sent to the non-cooperative party, offering options such as buying out their share or selling the property jointly. We try very hard to reach an agreement and avoid courts. However, if no agreement is reached, legal action is the next step.
- Filing a Lawsuit for Dissolution
If the co-owner or co-owners continues to refuse dissolution, a lawsuit is filed in the local court where the property is located. This legal action requests the court to either:
• Order the sale of the property and distribute the proceeds accordingly.
• Allocate the property to one co-owner, requiring them to compensate the other party based on valuation.
- Court-Appointed Valuation : The court may appoint an independent expert to determine the fair market value of the property. This ensures that if one co-owner buys out the other, the price is fair.
- Judicial Sale of the Property : If no agreement is reached regarding ownership transfer, the court may order a public auction. The proceeds from the sale are then divided among the co-owners based on their ownership shares. This is not an ideal scenario for anyone and many enforced dissolutions of joint ownerships reach an agreement before this point.
Costs and Timeline
The legal costs of enforcing dissolution include court fees, lawyer fees, and valuation costs. While the process can take several months to over a year, it provides a definitive resolution when private negotiation fails
Why Legal Assistance is Essential
Navigating the Spanish legal system for property disputes requires expert legal representation. At Molina Solicitors, we specialize in property law and co-ownership disputes, ensuring our clients achieve the best possible outcome in enforcing a dissolution of joint ownership. If you are facing difficulties in dissolving joint ownership, contact us for professional legal guidance tailored to your situation.
