Dividing Inherited Property: Dissolution of Co-Ownership

An inherited property stays, until the heirs agree, an asset none of them can fully deal with. It cannot be sold, letting it causes arguments, and nobody will invest in it. There are two ways out, and the difference between them reaches as far as the price the property fetches.

Agreement first: the partition agreement

Where the heirs can agree there is no need to go to court. A partition agreement between heirs is valid in written form; no official form is required even for real property in the estate.

This is a particularity of estate division and it saves months. But the agreement has to be drafted in detail:

• Which property goes to whom,
• How differences in value are equalised,
• In what order the land registry transfers are made,
• Who bears the costs and taxes,
• What happens if a transfer is not carried out.

The last point is usually the one omitted. A loosely drafted partition agreement replaces one dispute with another.

Without agreement: the court route

Where no agreement is reached, an action for dissolution of co-ownership is brought.

Mediation is now a condition of bringing such an action: a claim filed without it is dismissed on procedural grounds. The first step is therefore an application to a mediator, not to the court.

The court first considers whether the property can be divided in kind. Where that is not possible or does not suit the co-owners' interests, it orders dissolution by sale, conducted by the sales office through a public auction.

What a public auction really costs

At auction, property frequently sells materially below market value. After months of proceedings, every heir ends up with less than expected.

There is a practical way to change that: where all co-owners agree, the auction may be held among the co-owners alone.

The property is then not opened to third parties; the co-owners bid against each other and it stays within the family. What matters in practice is that the request is filed before the sale stage and with every co-owner joining in. Objections raised later do not change the outcome.

Choosing between them

Three factors, weighed together:

1. Time. A partition agreement is measured in weeks; proceedings in months or years.
2. Price. An agreed division values the property at market; an auction offers no such guarantee.
3. Relationships. Litigation usually damages relations between heirs permanently.

Proceedings are therefore best treated as the route taken once the prospect of agreement is exhausted. While that prospect remains, a well-drafted partition agreement produces the better result on nearly every measure.

Conclusion

An action for dissolution of co-ownership is a solution, but not the best one. Wherever the heirs can sit down together, a properly drafted partition agreement is both faster and worth more.