Joint ownership is when two or more people jointly own, for example, a property, flat, object, or animal.
Co-owners may fall out over who can use the property at any given time, how usage rights are divided, who decides on any maintenance and repairs, or who is responsible for maintenance or repair costs.
General principles of co-ownership
Joint ownership is usually held in fixed shares. Fixed-share joint ownership means that each joint owner owns a specific share of the jointly owned property. This is the case, for example, when spouses jointly own a property with each party owning a ½ share, for instance.
Regarding the rights and obligations relating to co-ownership
According to Section 2 of the Co-ownership Act, the shares of co-owners are equal to each other, unless otherwise shown.
A co-owner has the right to transfer their share, apply for pledges or security interests on it, and otherwise dispose of their share without consulting the other co-owners. In addition, they have the right to make use of the jointly owned item in such a way that their actions do not infringe upon the corresponding rights of the other co-owners.
A co-owner does not have the right to claim compensation from another co-owner if they use, for example, a summer cottage less than the other co-owner, unless separate agreement on such compensation has been made.
As a general rule, if the object of co-ownership is to be sold, the consent of all co-owners is required.
Co-owners are responsible for expenses and taxes relating to the jointly owned property (for example, insurance) in proportion to their respective shares. This principle may be deviated from by agreement.
Co-ownership agreement
It is advisable to draw up a contract at the initial stage of co-ownership, before any disagreements have arisen. It is very difficult to reach an agreement on the terms of the contract afterwards. The contract should at least cover decision-making related to the jointly owned item. It is advisable to agree on the division of costs, usage turn, and how the co-ownership will eventually be dissolved. The contract should also stipulate how the payment of bills will be handled.
The appointment of a trusted man
If no agreement is reached on the care of a jointly owned item, a co-owner has the right to apply to the court for the appointment of a trustee to manage the joint item and its administration for the common benefit of the owners.
The court shall then give an opportunity to those co-owners who have not joined the application to state their opinion on it. If there are valid grounds for appointing a trustee, the court shall appoint a trustee, either for a fixed term or indefinitely, to perform the task. This is a paid service.
How can you get rid of joint ownership?
Sale of ownership interest
Each co-owner can sell their share of the property, which is then considered a sale. Their share can be sold to other co-owners or to an outsider.
Subdivision of property
In a partition of real estate, the property is divided among the co-owners into new, smaller properties according to their ownership shares. Even a single co-owner can apply for a partition, and the consent of all owners is not required for the partition to be carried out. Partition is applied for from the National Land Survey of Finland.
Co-operation agreement
Co-owners of a property can enter into an agreement with each other, in which they agree on the division of the property, i.e., they agree on which part of the property each will receive. The division agreement must be made in writing and a registrar of deeds must be present at the signing of the agreement to confirm the division agreement. After the division agreement, each co-owner independently applies for title registration for the area they have received. After title registration has been granted, the subdivision process begins, during which new properties are formed for the contracting parties in accordance with the agreement.
Dissolution of co-ownership
If no one is willing to purchase a share of a jointly owned item and it cannot be divided, dissolution of the joint ownership is the only way to get rid of it. In such cases, the court, upon the request of a co-owner and after hearing the other co-owners, may order the item to be sold. The court must, if necessary, appoint a trustee to manage the sale of the property and the distribution of the purchase price.
Article written by Tuula Rainto, lawyer, Law Office Amos. You can always call him for free, tel.010 299 5090.
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