Lawpractice

Judicial distribution

In many cases, multiple heirs share ownership of one or more properties (co-owners), but are unable to agree on how to utilize them. For example, not all of them may agree on whether the property should be sold or leased, and even if they do agree, they may not agree on the price. At the same time, they all incur shared expenses and are taxed (e.g., property tax) according to their ownership share. Similar issues arise when two or more people jointly purchase one or more properties and later face disagreements and problems.

It is nearly impossible for a co-owner with, for example, a 10% share or more to sell their share, as the new owner will face the same seemingly unsolvable issues. As a result, the co-owner feels trapped.

Although this situation may seem like a dead end, in reality, it is not. This is because the law allows any co-owner to seek judicial distribution of the property, or properties in which they hold a share, regardless of the agreement of the other co-owners or the share of the co-owner seeking the distribution. However, in the case of a bare owner and a usufructuary, the action for distribution can only be filed by the bare owner or jointly by the bare owner and the usufructuary, but not solely by the usufructuary.

Before filing the relevant lawsuit, there must have been an extrajudicial attempt at distribution, which must have failed. This means that the other co-owners must have rejected the proposal for distribution by the interested co-owner. For this to occur, an extrajudicial notice must be communicated to all co-owners. Of course, if all co-owners agree, the distribution can occur out of court, and the process ends there.

If an agreement is not reached, judicial distribution is achieved through a distribution action, which aims to divide the common property, or properties. If the court accepts the request, it issues a decision that may provide for:

the division of the property, or properties (if feasible);
the sale of the property, or properties through auction;
the sale of part of the property, or properties and the division of the remainder (if feasible);
the creation of smaller groups of co-owners within the total ownership (if feasible);
the partial dissolution of the co-ownership, while retaining it over the remaining parts of the property, or properties (if feasible).

Through judicial distribution, unused properties acquire new ownership or an owner who can now utilize them without obstruction. Meanwhile, co-owners who wish to be relieved from the maintenance costs of a property they cannot exploit are able to achieve their goal.

Once the distribution action is filed, it must be registered with the competent Mortgage Registry or Land Registry, and a judicial fee must be paid. It must also be communicated to all co-owners, and those who may have real rights on the property or part of it must be summoned.

Our office specializes in filing distribution actions and provides comprehensive legal support, ensuring the best possible outcome for our clients.