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Co-ownership. Is it for life, or can I get out?

“I am a co-owner of a property together with a friend. For a number of years I have been trying to convince him that we should sell the property, but he keeps refusing. I just don’t see the value of keeping the property anymore. Is there any way I can force him to sell?”

A distinctive feature of co-ownership in property when compared to all other forms of co-ownership such as partnerships or associations is the fact that a co-owner may freely sell his share of the property without reference to the other co-owner. You can however only exercise this right if no prior agreement was concluded between you and your co-owner in which you both agreed on how the disposal of your share in the property should be handled. Choosing to exercise this right to sell your share can however strain the relationship as your co-owner may feel that he is being forced into a co-ownership with someone else he does not know or approve of.

The competing interests here are that you cannot force your co-owner to sell his share of the property if he does not want to and neither can your co-owner force you to remain a co-owner against your will.

The inexpensive and less time consuming option would be if you and your friend could agree that he buys your share at a market related price. The important fact here is that you and your friend should first try your utmost to resolve your dispute and settle the matter amicably before you decide to litigate, as our Courts will ask that you and your co-owner to present the steps that you have taken to resolve the issue.

If the above is not possible, our law allows you the right to approach the Court for partition of the property. Partition of the property essentially entails that the property itself will be split with the court dividing it physically amongst the co-owners in accordance with the value of the property and each co-owner’s share in it.

If the actual partition of the property is impracticable, the Court will have the freedom to decide on whatever other solution it sees fit, such as ordering that the property be sold by public auction and the proceeds thereof be shared between the co-owners according to your respective shares in the property. The Court can also for example order your co-owner to buy you out. The Court will therefore, with reference to the circumstances, make an order that is just and equitable for both you and your friend.

What is clear from your situation, that should you wish to enter into a co-ownership of property arrangement, you should obtain legal assistance to discuss the available structures and entities that will best suit your needs and have an agreement drafted which clearly spells out aspects like sale of the property and the respective rights and duties of you and your friend. This can help avoid many headaches and even litigation at a later stage.

July 7, 2016
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