Extinction of condominium or joint ownership What is it?

The extinction of condominium or proindiviso is a common cause of dispute between owners. Specifically, it involves the disappearance of the property shared by several people with a certain share in it. Here we would like to delve into this concept and explain its main keys.

What is an extinction of condominium?

To answer this question, the first thing to do is to determine what condominium is. It is the property itself, provided that it is shared by several owners. In many cases, it is also referred to as community of property or co-ownership as they are synonymous.

The extinction is usually carried out by mutual agreement in most cases. Here we can cite the example of a couple who, after the end of their relationship, decide to sell the house they own together. However, it is possible that one of the parties expresses its intention to dissolve the condominium and the other does not.

According to the Civil Code, the party who does not want to dissolve the condominium cannot force the other party not to sell it. This is why, in the case of an indivisible property, as in the case of a private home, the division of the common property must be carried out by auction if no agreement is reached.

Who can dissolve the joint ownership?

Any of the co-owners of the property. All of them have an inalienable right to do so. However, it can be done for different reasons:

• The co-owner wants to sell his part of the condominium to another co-owner or to a third party. No one can force him not to do so.
• The co-owner wants to extinguish the condominium by buying the parts of the property held by the others. This is usually for the purpose of exclusive enjoyment of the property.

What are the established grounds?

They are reflected in articles 395-406 of the Civil Code. In addition, in the event that the extinction has to be carried out by means of a judicial auction, the provisions of the Civil Procedure Act must also be taken into account.

The destruction of the condominium, its abandonment and its usucapion can lead to its extinction. However, these are also elements contemplated for the extinction of ownership. The Civil Code establishes a series of specific causes for this figure:

• Sale to a third party. One of the co-owners can sell his share to an outsider, who will then become part of the community property. He can also sell it to someone who is already a co-owner or to several co-owners to increase their share.
• Waiver of rights. Any co-owner can renounce his or her share in the ownership of the property.
• Dividing the common thing. Provided that the property is not indivisible. This is a judicial process in which it is divided. If it is indivisible, there is the option to go to auction or for the co-owners to reach a fair agreement.

What are the consequences of extinguishing a condominium?

Now that you know what a proindiviso is, it is time to specify the consequences for each of the affected parties.

Consequences for co-owners

It will depend on how the extinguishment is carried out. It is possible, for example, that one of the co-owners retains full ownership of the property and that the other co-owners receive financial compensation in exchange for their shares. It is also possible that the property is sold to a third party and that, as a result, everyone loses their rights to the property in exchange for money.

Something else must be taken into account here. The extinguishment of the condominium without mortgage is just as we have explained it above. However, it should be noted that extinguishing the condominium of a mortgaged property does not settle the debt of the debtors. The house may cease to be yours, but you will still be obliged to make the payments.

Consequences for third parties

They need not be affected at all. It does not matter whether the property is mortgaged or subject to easement rights. In any case, it is advisable to have the services of a specialist to analyse the agreement and all the details related to the use and enjoyment of a joint tenancy.

Consequences vis-à-vis the Public Administration

One of the most common doubts has to do with the condominium extinguishment tax. In fact, many people interested in getting rid of their part of the co-ownership want to know how much it will cost them. In this sense, they do not really have much to worry about, since extinguishing the condominium is an action exempt from payment of ITP (Transfer Tax). Depending on the autonomous community we are talking about, its value can be between 3.5 and 8 % of the sale value. So it is a considerable saving.

However, the action to extinguish the condominium is subject to IAJD (Stamp Duty). It also depends on the autonomous community in which the property is located. Its value usually ranges between 0.3% and 1.4% of the sale value.

Condominium in community property

This is a special case. Generally, when there are no children, there is usually no problem in carrying out the sale or in reaching an agreement on the use and enjoyment of joint ownership. However, when there are minor children involved, the judge will award the use of the family home to one of the children if there is no agreement.

The law clearly specifies in this sense that the extinction of the condominium cannot affect the right of use and enjoyment in any case.

In short, the extinction of the condominium is a figure traditionally associated with inheritances, separations and divorces. This is normal, as these are the times when having a property in co-ownership can be more problematic. We hope to have resolved all your doubts about this legal figure included in the Civil Code.