Co-ownership

right

Co-ownership, also called a condominium, is the application of the community to the right of ownership. In this way, constituting the most important modality of the community of goods and rights.

Co-ownership, in other words, is the situation in which the property of a good belongs, as its name suggests, to several subjects. That is, it belongs to more than one owner. Co-ownership usually manifests itself in companies or real estate, where the property can have different owners or owners. In this way, the co-owners have an indivisible part of the property, being able to use it freely.

Depending on the regulation that the country presents, its implications could vary.

Sometimes it is also called undivided.

Co-ownership characteristics

The characteristics that define it are the following:

  • Several owners (physical or legal), without limit.
  • Unity of good. That it cannot be found divided.
  • The co-owner owns an indivisible share of the property, which he can freely use.

Why does co-ownership occur?

Co-ownership is a very common concept to see on a day-to-day basis. When a person suffers the loss of a relative, his inheritance remains for the legal heirs or legatees. Thus, when a family inherits a property, a house for example, it remains in the hands of all the siblings and, if applicable, the couple.

In this way, the house, indivisible as reflected in the definition, is owned by a group of siblings. Brothers who, as it is also said in the definition, have a part of the house, indivisible until its sale.

Therefore, until it is sold, the house remains under joint ownership, while the children become joint owners of the property.

Thus, this is the most frequent cause in which we see the figure of joint ownership. However, in the business world, this figure is also often seen. Just as it is seen in other areas such as marriage.

Extinction of joint ownership

Co-ownership, in Spain for example, can be terminated when requested by one of the co-owners. However, as long as the division of the asset does not lead to the obsolescence of said asset and, therefore, the loss of value for the rest of the co-owners.

However, depending on the legislation of each country, these regulations may vary.

To do this, other reasons are set out below that, internationally, could lead to the extinction of co-ownership:

  • Disappearance or extinction of the asset.
  • Agreement between all co-owners.
  • Loss of right.
  • Expiration of the terms.
  • Compliance with the agreed resolution condition.

Example of co-ownership

As the example of housing has been set out, below, a different co-ownership situation is exposed, in the business world.

Imagine a company that goes public, in which a limited number of shares are issued. The buyers of these shares are co-owners of the company. However, since the company cannot be divided, giving a piece of the company to each of the shareholders, they remain in a joint ownership regime. Therefore, if the person wants to sell his share, he can go to the market and sell it.

In addition, to sell them, here is an example of what would be a termination of co-ownership, or the transfer of co-ownership, of the right.

Tags:  latin america economic-analysis Argentina 

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