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Joint real estate: Fractional ownership explained in a simple way

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Establishment of a fractional community in real estate

Such a community is created either by a legal transaction or by operation of law. A corresponding legal transaction exists if several persons acquire ownership of a property, but there is no community of joint ownership. In the case of legal regulations, it comes into being through the joining or mixing of movable property, as a result of a treasure hunt or - in the case of real estate - through the condominium owners' association. Renting and sale of the real estate by the community are possible without further ado. However, in the case of fractional community and renting, care must be taken to ensure that it is done by all the participants of the community together.

The sale of the entire property is also possible only jointly, but each fractional owner may sell his share independently. In addition, each fractional owner may use the common property or the real estate, provided that he/she does not thereby interfere with the use by the other part-owners. The management of the common property is subject to the common responsibility of all members of the community. Decisions on management and use are made by majority vote. Within the framework of the condominium owners' association, the owners' meeting is the decision-making body here in the case of the fractional ownership community.

Fractional share community and joint ownership community

The two forms of joint ownership have some similarities and are often confused with each other, but there are a few important differences. In some respects they even contradict each other. In the case of community of joint ownership, all persons have joint ownership of the property, but the individual owners do not have a share right. For example, a Erbengemeinschaft (community of heirs) is a Gesamthandsgemeinschaft__ (community of joint owners), since the heirs are obliged to manage the estate jointly. In the case of so-called co-ownership according to fractions, each partner has the right to freely dispose of his or her own share and can, for example, independently sell his or her real estate share without coordinating this with the other partners. However, it is possible to convert a community of heirs into a fractional community. The latter offers the individual heirs more flexibility and room for maneuver. It can thus help to prevent possible disagreements and disputes. The conversion is carried out by a notary, requires the presence of all members of the community of heirs and must be entered in the land register.

The cancellation of a fractional community can be initiated by any member

Dissolution of the fractional ownership: your rights

The dissolution of a fractional community can be initiated by each individual member. For this purpose, the dissolution of the community must be applied for. It is possible through various procedures. For example, the community is dissolved if the property is sold to a third party and each member receives the proportional proceeds of the sale. Also, if one member takes over the share of the other partner(s) and thus becomes the sole owner of the property, the fractional community is dissolved. If the members cannot agree on a unified course of action and a partition auction has to be held, the community is also considered dissolved. However, this is always the worst of all solutions, since in such cases sales prices are usually achieved that are significantly below the market value of the property.

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Written by:

Elvis Miculis, Marketing

Elvis is an expat who just recently moved to Berlin. He loves to explore the city, especially architecture and parks.

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