In practice, it often happens that there are multiple owners of a property or that different kinds of rights are held over it. Given that tensions and conflicts between them are frequent, the law steps in to regulate the matter in a way that benefits both the owners and the future of the property. In this text, we will look at some key points regarding how the relationships between co-owners are shaped, even when it comes to the payment of ENFIA (a property tax) that affects most properties in Greece.

1.What is a “right of common ownership”?

The term “right of common ownership” simply refers to the coexistence of multiple rights, whether of the same or even different kinds, over the same asset, whether movable or immovable. Thus, each person who holds a right over the asset is called a “co-owner,” and their share is expressed as a percentage of the whole asset. For example, we might say that person A is the owner of 3/8 undivided of a property.

What is important to note is that the asset is not physically divided, and therefore, each co-owner can use the entire movable or immovable asset for their needs, as we will see further on. The fact that their share is 3/8 of the asset does not mean that the asset is mentally divided and that they can only use that specific “part” corresponding to their share.

Furthermore, it is possible for different co-owners to have different rights over the asset. Specifically, when dealing with real estate, one of them may own 2/8 of the property’s ownership, while another may hold 3/8 of its usufruct, etc. This situation does not cause legal problems, and usually, co-owners can resolve their disputes by applying the provisions of the law for each right separately.

2.What are the rights of a co-owner?

The co-owner’s share in the property obviously grants them certain rights that they can exercise even against other co-owners. More specifically, the co-owner has the right to:

• Receive the fruits and benefits of the property in proportion to their share. The co-owner retains this right even if they did not exercise it from the beginning but claimed it after a while. However, they can agree with the other co-owners that a particular co-owner will be excluded from the property’s fruits (usually in exchange for another consideration).
• Use the common property for their needs. A key condition here is that the use of the property by other co-owners should not be hindered, provided that they exercise their corresponding right to use the property. It is understood that the right to use extends to the whole property, as mentioned earlier, and not just to the co-owner’s proportional share.
• Freely transfer their share of the property. This means they can sell their share to another person, agree to exchange shares with another co-owner of the same property, or establish a real right on their share, like a mortgage, etc. However, they cannot validly lease their share to another without the consent of the other co-owners, as we will see.

3.What if the property was already rented before I acquired a share in it?

In practice, it is possible that a property is already rented, and subsequently, someone (now a co-owner) acquires an undivided share in it. The co-owner naturally has the right to receive the fruits of the property, i.e., the rent arising from the property’s lease. The tenant can pay the full rent either to one co-owner or to each co-owner separately, in smaller amounts derived from each co-owner’s share (this is usually a matter of agreement).

The co-owner can claim a share of the rent from the lease of the property, provided that the lease started or was renewed relatively recently after they acquired a share in the property. They cannot claim a share for previous leases that were in effect long before they obtained an undivided share of the property.

Upon acquiring a share, the co-owner can also have a say in the extension or renewal of the property’s lease, in agreement with the other co-owners. A majority of shares (more than 50% or 2/3 of the shares) is needed to make a valid decision. It is understood that if one co-owner exclusively uses the property for their own residence or exploitation, the other co-owners can seek compensation, which is calculated based on the rent the co-owner would have to pay for using a similar property in the area, compared to the average rent in the area.

4.Does a co-owner also have corresponding obligations?

Regarding the obligations of a co-owner, they are initially required to:

• Compensate the other co-owners of the property (especially the co-owners) if they cause damage to them through their actions. For example, if they get involved in a legal dispute due to a neighboring rights issue related to the property, and the other co-owners are harmed without any fault of their own, they should be compensated for the expenses they incurred.
• Participate in the expenses of the property, which can be of any kind, such as municipal fees/ENFIA/property identification document costs. Obviously, the co-owner must cover these expenses in proportion to their share, and if they pay additional expenses beyond their share, they can seek reimbursement from the other co-owners.
• Act in good faith towards the other co-owners, meaning they should not intentionally try to harm their interests—for example, by unreasonably refusing to approve a decision that would be beneficial for the property’s exploitation.
• Attempt to resolve disputes with other co-owners out of court, rather than taking legal action over minor violations that could be settled through discussion with the other co-owners.
• In case the co-ownership is dissolved (through one of the ways we will discuss later), cooperate with the other co-owners for the needs of the process, especially when the court is involved, and various documents that the co-owners possess and are familiar with need to be submitted.

5.How is the common property managed?

The method of managing the common property depends on the changes or modifications that are being proposed by the co-owners. For simple or routine changes that do not radically alter the common property but even fall under its maintenance, the co-owners can make decisions among themselves by majority vote. Since the law does not specify, a simple majority may suffice—meaning that more than 50% of the votes of the shares are required to make a valid decision.

For changes or interventions to the common property that are disproportionately costly or do not fit with its intended use, unanimity among the co-owners is required to make a valid decision. That is, all co-owners must vote in favor of the specific proposal, and the decision may be rejected even if only one of them disagrees.

For example, renting out the property to a third party requires a simple majority of the co-owners’ shares to make a valid decision. However, a significant renovation of the property, changing its use to a commercial space for a business lease, or selling the property to a third party requires the unanimous agreement of the co-owners for these actions to be valid. Of course, it always depends on the nature and purpose of the specific property where the proposed action would bring a substantial or non-substantial change.

6.What if the co-owners disagree on the management of the property?

In this case, the law stipulates that the court will become responsible for determining how the common property will be managed. However, this is under the condition that the management of the common property is impossible either due to issues among the co-owners (e.g., they cannot reach a decision due to disagreements) or even due to force majeure (e.g., a co-owner has passed away or been declared under legal guardianship, and their heirs have not yet acquired their share of the common property).

The court must arrange the management of the property in a way that does not harm the interests of the co-owners. The co-owners cannot subsequently alter the arrangement for the common property as established by the court’s decision through a new decision among themselves. To make such a change, they would need to file a new lawsuit requesting a modification of the property management regulation if the circumstances upon which the previous decision was based have changed.

It is important to note that the court’s decision cannot address matters that require unanimous agreement from the co-owners for a decision to be made. Such matters include the sale or transfer of the common property in any way, for which the consent of all co-owners is necessary. For better management of the common property, the court may appoint an administrator, who will have the authority to represent the co-owners in both legal and out-of-court matters, concerning contracts and legal relations related to the common property.

7.Can I transfer my share to the other co-owners in exchange for compensation?

Given that transactions proceed at a rapid pace, the law allows each co-owner to transfer their ideal share of the common property either to another co-owner or to a third party for an agreed-upon compensation. They may also encumber their share of the property with a real right (e.g., to establish a mortgage on their share of the property), provided that this does not hinder the use of the common property by the other co-owners.

It is self-evident that a co-owner cannot allocate a specific part of the property to another co-owner or a third party, as their ideal share encompasses the entire property and not a particular portion of it. Similarly, they do not have the right to lease their ideal share to another person, as a valid lease would require the transfer of the entire property to the third party, which is impossible due to the disagreement of the other co-owners.

In contrast, if two co-owners share 50% undivided ownership of a property, each can validly lease their share of the property to the other, provided there is an agreement among all co-owners on the management of the property, and the decision is ultimately legal. Thus, the legal relationship between the two co-owners will change, with one becoming the tenant and bearing all the obligations under the law towards the other, while the other co-owner assumes the role of the lessor.

8.How is the co-ownership dissolved?

The legal relationship of co-ownership between the co-owners can be dissolved in various ways as provided by law. The preferred method here is an out-of-court resolution if the co-owners agree. More specifically, the co-ownership can be dissolved:

• By exchanging the ideal shares of the co-owners among themselves, meaning that one co-owner can acquire the shares of the others and thus become the sole owner of the property. However, the exchange contract must be executed by a notary and registered as is generally required for property transfers.
• Through a partition lawsuit in court. Practically, any co-owner can file a lawsuit requesting the court to either divide the property into separate plots or to sell the entire property as a whole.
• The co-owners can agree among themselves to prohibit a partition lawsuit for up to 10 years, meaning that the co-ownership cannot be dissolved during this period, and they must wait for a later time to do so.
• This lawsuit must be filed against all co-owners of the property; therefore, their residence and details must be known to serve the necessary documents.
• The partition can also be achieved by establishing horizontal ownership of the property, especially if it is a building where no horizontal ownership has been previously established. Thus, each co-owner will receive one or more apartments according to the size of their share.
• If there are disagreements among the co-owners regarding the horizontal ownership, the difference in the value of each share can be compensated in cash from one co-owner to the other.
• Vertical ownership can also be established on the property, provided that the co-owners’ shares are equal. Each co-owner would then receive one ownership unit, according to a court decision.

9.Can the common property be auctioned?

If the judicial partition of the property fails using any of the methods mentioned above, the law provides the option to auction the property so that the co-owners can be compensated from the proceeds according to the size of their respective shares. The auction process follows the procedures described in the law, which will be detailed in another document.

Specifically, a judicial officer must prepare a description report of the property, and a specialist appraiser must estimate its value to set the starting bid price. It should be noted that the fees for these individuals, as well as those of the notary, are considered expenses of the process, which will be deducted from the auction proceeds, with the remaining amount distributed to the co-owners to satisfy their financial claims based on their shares.

If a co-owner disagrees with the description of the property or the starting bid price set for it, they may file an appeal requesting either the annulment and repetition of the process from the point where the error occurred or the correction of the description report to clarify the identity of the property, preventing confusion among the public interested in bidding.

10.How does co-ownership work in the payment of ENFIA (property tax)?

As mentioned earlier, a fundamental obligation of the co-owners is to cover the regular expenses of the property, including the payment of ENFIA (property tax). The law states that the primary person responsible for paying the tax is the owner of the property and anyone who has acquired a right over it, such as the bare owner, the usufructuary (if the usufruct has been separated from the bare ownership), someone receiving the property as a gift, or the highest bidder who acquires the property through an auction.

Therefore, according to the law, the owner of the property is obligated to pay the ENFIA according to their ownership percentage. In cases where there are multiple co-owners of a property, all are liable for the payment of the tax, each up to the extent of their share. If a co-owner pays more tax than is due for their share, they have the right to seek reimbursement from the other co-owners for the excess amount paid.

Regarding usufruct, the law differs: even though the usufructuary is responsible for paying the ENFIA on behalf of the property, their liability decreases as their age increases. For example, an 80-year-old usufructuary is obligated to pay only 1/10 of the total ENFIA assessed on the property. The remaining tax, after subtracting the amount due from the usufructuary, must be paid by the bare owner of the property.

Next to the client and his needs.

Athina Kontogianni-Lawyer

The above does not constitute legal advice, and no responsibility is assumed for it. For more information, please contact us.