Real estate in a co-ownership: how does it work and how to manage it well?
Our real estate agency in Paris's 16th arrondissement, our CENTURY 21 Auteuil Immobilier and Auteuil Seine offices will explain how joint ownership works, its advantages, its risks, and best practices for buying, managing, or selling a property owned by multiple parties.
What is real estate indivision?
Joint ownership is a legal situation in which at least two people become joint owners of the same real property, without a physical division of their shares. Each co-owner holds a share proportional to their financial contribution, but all co-owners collectively own the entire property.
This rule applies automatically in several situations:
- Buying real estate as a group (couple, friends, family);
- Inheritance (upon the death of a person, the heirs temporarily become co-owners);
- Divorce or separation.
Indivisuality is often chosen for its simplicity: no specific formalities, no special status to create, unlike a SCI.
How does real estate indivision work?
In the case of joint ownership, all decisions regarding the property must be made in accordance with specific rules:
- Precautionary measures (emergencies, essential repairs): a co-owner may decide on their own;
- Decisions regarding day-to-day management (repairs, rentals, etc.): a decision requires a two-thirds majority of the undivided shares;
- Transactions involving the disposal of property (sale, gift, mortgage): Unanimity is required, except as otherwise provided by law (Article 815 of the Civil Code).
Each co-owner must contribute to the expenses, repairs, taxes, insurance, and debts in proportion to their share.
Why buy a property in an indivision?
Buying as joint owners has several advantages:
- No administrative steps are required: the program applies automatically.
- Flexible financing: each person contributes whatever they wish (30/70, 50/50, etc.);
- A wide range of coaching partners: married couples, civil union partners, cohabiting partners, friends, parents and children…
- Equity: Everyone contributes to the expenses in proportion to their share;
- The opportunity to purchase a larger or better-located property by pooling resources.
This solution is particularly popular among unmarried couples or those in civil partnerships because it is easy to set up.
How to finance a purchase in installments?
Co-owners can finance their purchase in various ways:
- Each person takes an individual credit, proportional to their share;
- A joint mortgage is taken out by all parties, who then become jointly and severally liable co-borrowers;
- Some people finance their share through a personal contribution, others through a loan, or a combination of the two.
The shares are calculated based on each person's actual contribution (property value, notary fees, construction work, etc.) and included in the notarized deed.
Please note : First-time homebuyers are eligible for an interest-free loan (PTZ), even when purchasing a property as joint owners.
How to secure indivisibility through a convention?
A joint ownership agreement is strongly recommended to avoid disputes. It allows you to:
- Define each person's rights and obligations;
- Organize the management of the property (allocation of expenses, decision-making rules);
- Provide for the appointment of a manager;
- Determine the terms for ending joint ownership.
This agreement must be drawn up by a notary when real property is involved. It may be entered into for a renewable term of 5 years or for an indefinite term.
