Co-ownership share

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Co-ownership share

Ownership by floor or condominium ownership is a particular form of co-ownership that also represents a real estate property. Its particularity lies in the fact that the co-owner has the exclusive power to administer, use, and improve some parts of the building that are considered private.

In theory, an owner can freely dispose of his or her co-ownership share (for example use it as collateral or alienate it). The pre-emption right of other co-owners exists only if it has been specifically provided for and entered in the land register.

Condominium ownership basics

Only floors or parts of floors organised into residential or commercial premises can be the objects of exclusive right. This means properties that are independently accessible and potentially including additional annexes (such as cellars, attics, garages, workshops, etc.)

A common parking lot can also be part of a condominium. The related co-ownership shares can be assigned to a specific floor so that they can only be sold or used as collateral together with their floor.

Installations and areas that are also used by other co-owners, such as staircases or laundry rooms, are the only areas that should be co-owned.

Such is also the case with the land on which the property is built, as well as the parts of the property which are essential to its structure, layout, and solidity.

Establishment of a condominium property

A condominium is established through a founding act executed in the form of a deed and registered at the land register.

The founding act should contain at least two elements:

  • Delineation of floors (precise determination of the rooms intended for common use and those subject to exclusive right).
  • Shares (parts per floor, specified in hundredths and thousandths of the total value of the property).

The basis for the calculation of the share value takes into account the size of the co-ownership share as well as a certain number of other factors such as property location, sun exposure, air flow, etc. These factors can increase or decrease the value of the share.

An individual file is opened for each part of the condominium, and the base file for the whole residential property.

Regulations of administration and use

If such regulations do not already exist, the co-owners can demand that they be created. They will then have to be registered at the land register.

To the extent permitted by law, these regulations address, among other things, the following issues:

  • maintenance and renovation works
  • alienation of property
  • appointment and responsibilites of the administrator
  • distribution of charges depending on property shares
  • distribution of renovation funds
  • possibilities to exclude a co-owner

Charges related to co-ownership are incurred by the co-owners in proportion to their shares (repairs, redecoration, damages payable to the administrator, taxes and insurance). The condominium does not constitute a legal person. Internally, it resembles an association with its supreme authority being the co-owner assembly.

Practical problems with using co-ownership shares as collateral

As far as collateral is concerned, the rules applicable to ordinary properties are also valid for condominiums. Collateral can be established over both the entire property and each of the co-ownership shares. If any of the shares have already been taken as collateral, the co-owners cannot further encumber the subject matter of such collateral (CCS art. 648 III).

It is advisable to take out a construction loan for the entrepreneur who is in charge of the condominium construction or for all of the co-owners. The co-owners are liable as joint debtors.

From the moment the condominium planning begins, construction loans can be granted for each of the units making up the co-ownership.

In practice, this approach is not always feasible since it is very difficult to attribute overall construction to different units.

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The displayed interest rates are the best rates currently available. Your personal interest rates may vary depending on LTV, affordability, mortgage amount and the location of the property.

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