Extinction of Joint Ownership refers to the termination of the common ownership of a specific property by multiple people. Joint ownership is the shared ownership of a property by multiple holders, where ownership shares are assigned to each one.

The most common reason for the extinction of joint ownership is the desire of the owners to no longer be part of this community. However, it is not the only reason.

When it is not possible to terminate the joint ownership by mutual agreement and the property is indivisible, the division of the property will be carried out through an auction.

Causes of Extinction of Joint Ownership:

The causes for the extinction of joint ownership are established in the Civil Code in Articles 395 to 406.

Additionally, the Civil Procedure Law must also be considered in cases where the division of assets must be done through a judicial auction.

The causes of extinction of joint ownership are, in principle, the same as for the extinction of ownership, such as abandonment, destruction, or usurpation, among others.

However, due to the conditions of joint ownership, the Civil Code provides specific causes:

Renunciation of the rights of the co-owners in favor of one of them.
Sale of the property to a third party and distribution of the proceeds among the community participants.
Division of the common property: Any co-owner has the right to request the division of assets. This is a judicial procedure, and initiating the division of a common property declares the extinction of the joint ownership. The result can be a physical division, creating a horizontal property regime, or economic if the property is indivisible. In this case, one of the owners retains ownership, and the others receive compensation based on their shares. Division through auction may also occur if no agreement is reached between the parties.

Extinction of Joint Ownership by Mutual Agreement:

The extinction of joint ownership can be achieved by mutual agreement, choosing one of the available methods. This could involve one of the owners acquiring the indivisible parts of the others, or the owner wishing to withdraw from the joint ownership receiving compensation.

It is also possible for the property to be sold, and the co-owners can share the money according to their ownership shares.

The co-owners opting for an agreement must conduct a valuation of the property they wish to divide and establish pre-agreements on how the valuation will be done, as well as a commitment to accept that valuation.

The deed of extinction of joint ownership can be executed before a Notary, with the corresponding tax payment.

In the case of a family home of a couple undergoing divorce or separation, the extinction of joint ownership must be included in the regulatory agreement.

If this agreement is approved by the court, it becomes the deed of extinction of joint ownership along with the judgment. When done this way, unlike in a divorce before a notary, there is no tax on Documented Legal Acts.

Extinction of Joint Ownership via Judicial Means:

If the co-owners do not agree, whether on the price or the method of dividing the property, the only option is to resort to the courts by filing a claim for division of common property.

The action for division of common property involves requesting the court to extinguish the joint ownership, either through the allocation of each co-owner's corresponding share if the property is divisible, or through the sale and subsequent distribution of the resulting money if the property is indivisible.

In fact, there is no specific procedure in the laws for implementing the division of common property ruling. The aim is to carry out the process in the most efficient manner possible, without violating the rights of any of the parties.

For this reason, one of the most commonly used procedures is that outlined in Article 670 of the Civil Procedure Law, which provides for the sale or public auction of the property.

Necessary Documentation:

Property titles of the assets subject to the dissolution of the joint ownership.
D.N.I. of the co-owners. If a company is involved, the powers of attorney or current appointments of administrators.
For urban properties, a certificate from the property owners' association confirming that community expenses are up to date.
Cadastral references for the properties (latest IBI receipt).
Whether the properties are leased or not.
The value assigned to each property.
How the properties will be allocated to the co-owners.
How the transaction costs will be paid: Notary fees, Municipal Plusvalía (if it is urban property).

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