
Co-ownership refers to the joint ownership of a property by two or more persons in undivided ideal shares. These shares are not determined or demarcated, but rather represent a general existence of real and personal rights over the whole.
Co-ownership may arise upon the registration of the property according to the wishes of the transferor and transferee. Many people proceed with donations of property in ideal shares to their relatives or purchase shares with the ultimate goal of subdividing the property later. Co-ownership can also arise during the administration of a deceased person’s estate where the heirs choose to inherit property in ideal shares.
These examples clarify that co-ownership is a real issue that concerns society. The existence of interests over the same property among more than one person inevitably leads to conflicts among co-owners, thus making the issue particularly important.
Cap. 224, “The Immovable Property Law,” has been characterized as a revolutionary piece of legislation for its time, as it includes provisions that regulate and limit co-ownership.
According to Article 21 of the aforementioned legislation:
“When immovable property is held in undivided ideal shares, all co-owners are entitled, proportionally to their respective shares, to:
(a) any building or other structure erected on, or permanently attached to the property;
(b) any tree or vine planted, or well opened on it;
(c) any permanent improvement made to it,
regardless of whether it was erected, attached, planted, opened, or improved by a co-owner or any other person.”
Article 21 essentially provides that any development or planting on the property belongs to all co-owners in proportion to their respective shares. For example, two co-owners each hold a ½ share in a 1000 sq.m. property and one of them builds a house at their own expense. The other co-owner also has rights over the house.
Furthermore, Article 25 of Cap. 224 provides for the right of first refusal. Specifically, when someone wishes to sell their share, they must give priority to their co-owner to purchase it. For this purpose, if the co-owner does not wish to purchase the share, they must sign a written consent which is submitted to the Land Registry during the transfer.
These two provisions highlight the need to limit co-ownership.
Co-ownership is terminated by transferring the shares to one of the co-owners or by subdividing the property into separate independent units with full ownership. However, subdivision is not always feasible, as there are conditions and restrictions. A property cannot be subdivided or split into smaller plots except in accordance with the provisions of Article 27 of Cap. 224.
Property suitable for development or construction may be divided into separate plots according to the provisions of any applicable law or regulation at the time. Among others, the Streets and Buildings Regulation Law and the Town and Country Planning Law provide for such subdivision. In practice, when land is held for development purposes, it is subdivided according to the decision (and terms) of the planning authority and the respective municipal or community authority. In the case of an apartment building, it is subject to horizontal division in accordance with the terms of the planning and building permits issued by the competent planning authority and municipality or community so that separate titled apartments are created.
- No vineyard, garden, forest, or land irrigated by continuous or seasonal water source may be subdivided into plots smaller than one donum (1338 sq.m.) if irrigated by a continuous water source, or smaller than two donums if irrigated by a seasonal water source.
- Land that is not irrigated or is not capable of being irrigated may not be subdivided into plots smaller than five donums (6690 sq.m.).
- No tree may be assigned to more than one person.
- In areas where there is a land consolidation and redistribution cooperative (land reallocation), the one, two, and five donums mentioned above increase to two, four, and ten donums respectively.
If the conditions of Article 27 are met, Article 29 sets out the procedure for subdivision. In cases where, due to the nature of the property, not all co-owners can receive a plot equivalent to their share, the Director of the Land Registry determines compensation to be paid by those receiving plots of greater value. In any case, Article 29 aims to respect the will of the parties. Where there is no agreement, the matter is resolved by the Director through a lottery.
If the conditions of Article 27 are not met, then the procedure of Article 28 applies for the sale of undivided shares.
According to this article, any co-owner of undivided property may request a certificate from the Director stating that the subdivision of the property is impossible. If the Director of the Land Registry is satisfied that the provisions of Article 27 are not met, he will issue a certificate of indivisibility. A notice is then served along with a copy of the certificate to the other co-owners informing them that within 30 days they must reach an agreement so that the property is held by one person. Otherwise, the Director may proceed to sell the property at auction, and each co-owner will receive their respective share from the sale proceeds.
Beyond the above, a practical and immediate solution for defining co-owners’ shares is a private distribution agreement, which may be registered with the Land Registry. This is an agreement that specifies which part of the property belongs to which owner, using an attached site plan. Such agreements are often registered with the Land Registry as a bank requirement during loan arrangements. The reason is to mortgage a specific portion of the land and not an undefined share.
This article is for informational purposes only and should not be considered legal advice.
Panayiotis G. Kyprianou
Lawyer
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