A community of co-owners of a property is not uncommon. It often arises from the joint purchase of a property by spouses or non-marital partners or from an inheritance within families. While such a community is a blessing for one person, it is also a curse for another: because the acquisition and running costs of the property are borne equally by all co-owners. But not every co-owner is prepared to accept this obligation. Legal advice is particularly needed when there is a dispute between the co-owners about the existence of the co-ownership community and the sale of the property.
But how does a dispute of a co-owners' association actually proceed? Do such dispute proceedings have to be brought before a Spanish court? Can an individual co-owner retain ownership of the property? And what costs can I expect as a co-owner in the event of a dispute?
The following article provides a brief overview of these issues, but does not claim to be exhaustive.
Where is it regulated how a co-owners' association is dissolved?
The dispute between co-owners of a property is governed by Art. 392 et seq. of the Código Civil, Royal Decree of July 24, 1889 publishing the Civil Code (Spanish Civil Code). Art. 400 Código Civil gives each co-owner the right to dissolve a co-ownership community. According to Art. 404 Código Civil, the dissolution is carried out by selling the property Sold and dividing the proceeds obtained among the co-owners.
What is the concrete procedure for a dispute between co-owners' associations?
The dissolution of a co-ownership community can take place both in and out of court. If the co-owners reach an out-of-court agreement, the property can be dissolved in return for a payment to the departing co-owner based on the value of the property. The property remains the property of the other co-owners.
However, if the co-owners are unable to reach an out-of-court agreement on the dissolution of the community, the party seeking dissolution may file a partition action with the competent court. If this is successful, the court pronounces a judgment, which can then be used to apply for and carry out the compulsory auction of the property. Through the subsequent partition auction, the property is sold and the proceeds divided by the co-owners.
I am seeking the division of the co-owners' association. Can I bring such an action for partition myself? And if so, which court would have jurisdiction?
No, there is a de facto obligation to hire a lawyer in any legal proceedings with an amount in dispute of more than 2,000.00 EUR. In the case of an action for partition, the value of the property is the relevant amount in dispute, which should regularly exceed the EUR 2,000.00 limit. The court in whose district the property is located has local jurisdiction.
In contrast to German law, it must also be taken into account that a court representative, a so-called "procurador", is required for representation before the court. The procurador is a lawyer whose task is limited to the handling of the case. The procurador is a lawyer whose task is limited to the handling of the lawsuit. The lawyer who is visited and authorized by the client is exclusively responsible for the consultation, the preparation of the statement of claim and the presentation of the plea. Accordingly, two lawyers act on behalf of one co-owner.
The court has pronounced a judgment, which has been served on me. Does this mean that the proceedings are over?
Although this formally concludes the proceedings, the judgment, which is also a "title", can be used to enforce the judgment. This is a separate procedure that follows on from the court proceedings and implements the judgment (tenor) in practice. In Spanish law, it should be noted that already with the judgment (title), without further intermediate steps, the withdrawing co-owner can pursue the forced sale of the property.
How can the compulsory auction of the real estate be operated concretely?
The forced sale of real estate is regulated in Spain in Art. 655 et seq. Ley de Enjuiciamiento Civil, Law 1/2000 of January 7, in short LEC (Spanish Civil Procedure Code). The court of execution is responsible for the auction of the property. According to Art. 667 para. 1 in conjunction with. Art. 645 LEC, the auction of a property is announced electronically on the portal of the judicial administration (Official Gazette), so-called "Boletín Oficial Estado". The auction value of the property is the value of the property minus the registered encumbrances and charges. An auction date is set, at which interested bidders can participate after depositing securities. The bidder who wins the auction becomes the legal successor to all encumbrances and charges on the auctioned property and the co-owners' association is dissolved.
What costs are incurred by the court process and the forced sale of the property? And who has to bear these costs?
Various cost items arise in the course of the court action and the subsequent compulsory auction proceedings.
The costs of a Spanish civil lawsuit are made up of the fees for the lawyers commissioned, experts, compensation for witnesses and court fees. In addition, there are further costs for the court attorney, the "Procurador". The costs incurred by a "procurador" depend on the amount in dispute in the proceedings and are regulated in the Schedule of Fees for Court Attorneys, Royal Decree 1373/2003 of November 7, 2003. The fees
The fees of the appointed lawyer can be negotiated freely with the client, but are usually based on the so-called "Criterios Orientativos Baleares", a kind of fee schedule for lawyers.
Furthermore, it must be taken into account that the aforementioned fees are incurred for each party, which quickly leads to the fact that such an action for partition results in high costs.
The total costs of legal proceedings for the settlement of a co-owners' association are shown by way of example using a fictitious amount in dispute, which corresponds to the value of the property, of 500,000.00 EUR:
Legal fees
According to the "Criterios Orientativos Baleares" the assigned lawyer can demand a fee in the amount of 60-100% of the costs, so that these would amount concretely to 22.680,00 EUR to 37.800,00 EUR.
Procurador fees
The schedule of fees for court attorneys shows that these amount to a total of EUR 1,428.00 for a notional amount in dispute of EUR 500,000 .00.
Procedural costs of the forced sale
The amount of the attorney's fees in the compulsory auction proceedings is regularly 80% of the costs, so that a fee of EUR 30,240.00 would result here. The procurador must also be paid again in the compulsory auction proceedings. His costs are EUR 1,428.00 for the aforementioned amount in dispute.
In the court proceedings, the unsuccessful party whose claims have been dismissed in their entirety shall generally bear the costs of the proceedings. These include, in addition to the aforementioned costs, the same costs for the opposing party. In the worst case, these would amount to a total of EUR 78,456.00 for the aforementioned amount in dispute and two co-owners. In addition, the costs for the compulsory auction proceedings are also incurred.
In view of these costs, priority should be given to out-of-court dispute resolution. In addition to soft skills and experience, this requires a good overview of the respective interests and legal know-how. Accordingly, legal advice is also recommended at this stage of negotiations.
Porta & Associates - Your real estate lawyers in Mallorca.
As German-speaking lawyers in German-Spanish real estate law, we are happy to support you in the purchase and sale of your property in Spain. We accompany you from the preparation of the purchase to the signing of the contract in front of a notary and the follow-up of the purchase. Gladly in close cooperation with your real estate agent on Mallorca. We apply for your license for vacation rentals, advise you on current tenancy law and provide legal support for owner associations.
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