Property division - risks and features

It is not uncommon for a property to be the cause of disputes that sometimes take years. This most often happens in the case of co-ownership, which may be a consequence of inheritance, divorce, an agreement between co-owners or other situations.

Any co-owner, whether natural or legal person, state or municipality, regardless of how the co-ownership arose or the amount of his share, may claim partition of the common property.

Property division is a process whereby property is divided between its co-owners. While it can provide many benefits, it also carries risks and features that need to be considered.

When dividing a property, it is important to comply with all legal requirements and procedures relating to the transfer of ownership. Failure to follow these steps correctly can lead to legal disputes and a waste of time and resources.

To deal with these risks and peculiarities, it is important to turn to qualified lawyers, specialists in the field of property law. Те ще ви помогнат да се запознаете по-подробно с вашите права и задължения и да намерите оптималното решение при делба.

1.What is co-ownership of a property?

Co-ownership of a property exists when there is more than one holder of that title. This means that each of the co-owners has a share(s) in the property and the corresponding rights and obligations attached to it.

Co-owners can use the property together or share its use according to agreed terms. Where there is co-ownership, the co-owners may sell or transfer their shares, but the consent of all co-owners is required for such a transaction.

2.Means of terminating co-ownership

The termination of co-ownership, regardless of which of the methods is used, should be affected in respect of all co-owners.

Co-ownership of a property can be terminated in various ways - by renunciation of the ownership right, by sale of an ideal part or the whole property by all co-owners or by partition.

1. Voluntary agreement – co-owners may agree to voluntary terminate co-ownership and divide the property, usually by selling the property or transferring the shares to other co-owners.

2. Share agreement – the co-owners can agree to divide the property by diving the shares among themselves without having to sell the property. This may include calculating and compensating the value of each share.

3. Judicial partition – if the co-owners cannot reach an agreement on the division of the property, one of them can request a judicial partition. The court can divide the property or order a sale of the property and a distribution among the owners according to their shares.

4. Sale of the property – The co-owners may agree to sell the property and distribute the proceeds according to their respective shares.

5. Share transfer – co-owners may transfer their shares to other persons, which may lead to the termination of co-ownership. This is usually done by contract or deed of transfer.

It is important to note the partition may not always taka place. Some types of co-ownership are indivisible by law (e.g. condominiums). The matrimonial property community is also indivisible, but after a possible divorce it becomes an ordinary community of property and can be divided under the ordinary procedure.

3. Risks of property division

One of the most important things is to carefully examine the property, how it came into existence and the title holders. In a partition involving heirs, it is necessary to assess who the heirs are according to the date of death of the heir.

Where not all co-owners are involved in the partition, the transaction is null and void. If a person who is not a co-owner takes part in the partition, he cannot acquire the property included in his share.

When dividing non-hereditary estates, it is important to know that if an estate is not included in the inheritance, for one reason or another, it can be divided further.

4.Types of division

Partition can be voluntary or judicial, depending on whether the co-owners can agree on the partition.

1. Voluntary division

Perhaps the most important thing in this type of partition is that all co-owners agree to it and are present when the partition agreement is signed. If one of the co-owners is not present, the partition becomes null and void.

This type of partition takes the form of a notarised contract, in writing, which is concluded between the co-owners.

The contract agrees on who gets what part of the property. As we said earlier, if one of the co-owners receives nothing, the partition will be null and void and the co-ownership will not be dissolved.

As a result of the voluntary partition, the co-owners acquire ownership of one or more of the co-owned properties.

2. Judicial partition

If the co-owners fails to reach an agreement between themselves on the division of the property, there is always the possibility of a judicial division, as this procedure is not time-barred.

According to the Code of Civil Procedure, actions for partition of jointly owned immovable property are brought in the place where the property is located. The judicial partition is initiated by an action brought in the place where the property is located. The judicial partition is initiated by an action brought by one or more of the co-owners against the others. It is important to note that the action is not time-barred, i.e., it can be brought at any time by any co-owner.

Partition proceedings go through two phases.

The first phase aims to establish the existence of co-ownership and who are the persons holding part of the property and the amount of their shares. In order to be able to establish this, it is verified how the property was acquired and whether it is actually owned by those persons.

When dividing property from an inheritance, it must be ascertained whether the heir is really the owner, who his heirs are and who owns what share of the inheritance.

In this phase of the partition, additional claims may be brought to challenge the descent of any of the co-partitioners, the grounds, or the validity of a will. It may be requested that one of the properties be excluded from the division or that others be included. This phase ends with a decision allowing partition, with the court deciding on the issues between which persons and for which properties.

Once the court has established these facts, it proceeds to a second phase, which aims to carry out the admitted partition. In this phase, the actual and definitive division of the property/properties takes place. When the properties have been divided in such a way that each co-owner receives his/her share, a division report is drawn up. It records/identifies the shares that each should receive. Based on this court decision, the co-owners become the exclusive owners of the property included in their share.

Where there are insufficient properties to be divided so that everyone gets at least one, the court orders that the common property/properties be sold at public sale. Based on this decision, the sharers obtain a writ of execution and can file a case with a bailiff to sell the property at public sale. He then distributes the amount received among the partitioners according to their shares of the property.

Our legislation provides for the possibility of a property being co-owned between many persons, and when it comes to inheritance, the number of holders of the property increases. As the number of right holders increases, so do the opportunities for disputes between them. Given the specific nature of judicial partition, legal aid will protect your rights and interests throughout the partition procedure.

The KGK team has extensive experience in property law, if you need legal assistance with this or any other type of matter you can contact us.