The co-ownership, as a type of ownership of several persons being entitled to exercise co-ownership rights over a physically undivided thing, or immovable property may be a cause of potential co-owners’ disputes.

This type of dispute especially arises in cases when the heirs/ex-spouses become co-owners of the same property after an inheritance proceeding, or after dividing property in a divorce. This legal problem is most often solved by the dissolution of the co-ownership; the right of each co-owner to request and obtain a change in the existing situation - even against the will of the other co-owners - which leads to the termination of the co-ownership.

The dissolution by mutual consent means that all co-owners have entered into an agreement on how the co-ownership is to be dissolved (voluntary termination). An agreement on the dissolution of the co-ownership shall be concluded in writing, the signatures of all co-owners shall be certified by the notary public, and in addition to the decision regarding the dissolution of the co-ownership, the agreement includes the subject and method of termination.

If all the co-owners cannot agree on how the co-ownership is to be dissolved, there is a possibility of the dissolution on the basis of court’s ruling. A court proceeding shall be started with petition for dissolution and the courts shall apply rules on extrajudicial procedure. However, if there is no agreement between the co-owners on, for example, the subject of the dissolution and the scope of a jointly-owned thing; on the right of co-ownership of each individual co-owner or the size of their shares, the initiating party shall be instructed to resolve the matter in lawsuit. A decision shall be made on the above-mentioned disputable right as well as the dissolution. It is important to point out that in addition to the decision on dissolution, the court shall determine the method of division and all that would be necessary for such division to take place.

Regularly, the court shall divide a physically undivided thing physically, and the real estate geometrically.
Physical division shall be carried out if it is possible to divide things into the required number of independent things, each of which shall belong to one of the co-owners.
Geometrical division is a method of dissolution in which the land parcels are divided in smaller parcels so that every co-owner acquires a new parcel in proportion to his co-owner share.

Special consideration has been paid to the dissolution by payment when prescribed by law, determined in a legal transaction, or if the co-owner makes it probable that there is a serious reason for considering that.
In such cases one co-owner acquires the real estate in entirely, and at the same time he pays out other co-owners according to the proportional share of each co-owner.

When the dissolution of the co-ownership shall be concluded on several things at the same time, on the request of one of the co-owners, the court may decide that each of the co-owner shall get a particular thing or several things in proportion to his co-owner share.
Also, there is a possibility to connect a certain ideal part with the ownership of a separate part of the co-owned real estate (establishment of condominium ownership).

Finally, if the division in above mentioned ways would not be possible without significantly reducing the value of the thing, the court shall carry out the procedure of civil division in which the market value of the thing shall be determined and then sold on a public auction or in another appropriate way. The amount gained by such sale shall be divided among co-owners according to the size of their co-ownership shares.

Author: Silvija Žužić | Lawyer Croatia | Law office Rijeka, Krk