How does shared ownership differ from joint ownership?

Quite often there are situations when one piece of real estate (for example, an apartment) belongs to several owners at the same time. Such property is considered common. At the same time, current legislation divides common property (CO) into shared and joint property. In this article we will understand what is the difference between one type of property and another.

We would like to draw your attention to the fact that issues arising in the field of property are classified as particularly complex. If you need advice, qualified assistance in resolving a conflict situation or in registering property, it is better to contact a professional lawyer.

Do you want to figure it out, but don’t have time to read the article? Lawyers will help

Entrust the task to professionals. Lawyers will complete the order at the cost you specify

290 lawyers on RTIGER.com can help with this issue

Solve the issue >

What you need to know about common property

The right of common ownership arises for indivisible things and property that cannot be divided by law (for example, securities). The object of this type of regime can also be divisible goods. This must be provided by law or by agreement of the owners.

In more detail, what the legal term “common property” means can be found in the Civil Code of the Russian Federation.

The specificity of such property is that it belongs to several persons at once. Owners own, use and dispose of benefits at their own discretion.

The basis for the emergence of such ownership is civil transactions, for example, the conclusion of a purchase and sale agreement, inheritance and other circumstances.

According to the law, common property can be shared or joint. In the first case, the parts of the owners are specifically identified, in the second - not.

What the law says

The main legal framework governing the law of common property is the Civil Code of the Russian Federation. In particular, Ch. 16 defines:

• concept and basis for common ownership (Article 244);
• the procedure for determining shares (Article 245);
• the procedure for dividing property and so on.

The specifics of joint ownership are regulated by the Family Code. This regime most often occurs between spouses.

You need to focus on Chap. 7 of the RF IC, which defines as:

• jointly acquired benefits are formed ();
• husband and wife manage and own them;
• there is a division of property (Article 36) and other nuances.

Both shared and joint property can arise in a marriage, which will be discussed in more detail below.

Bankruptcy

It is proposed to make significant changes to the bankruptcy legislation in relation to the sale of property of a citizen declared bankrupt and having a spouse (including a former one). The bill establishes that only what is allocated to a citizen as a result of the division of joint property of spouses (including former spouses), which is carried out in accordance with the rules provided for by family law, is subject to sale in a bankruptcy case. At the same time, in order to save time, demands for division are considered by the arbitration court hearing the bankruptcy case.

Another proposed innovation in bankruptcy legislation is the introduction of a new article regulating the possibility of joint bankruptcy of spouses (including former spouses), if the claims of creditors relate to the common obligations of the married couple.

Joint and shared property

Fractional ownership occurs when each of its participants has a share in a common object. This mode is more common than the joint one, since the second one is usually established in exceptional cases.

The procedure for determining shares is regulated by law or prescribed in the agreement of all participants. The owners' contribution to the property should be taken into account. If the size of the parts is not specified, they are considered equal.

Joint ownership implies that the object belongs to several persons, but their shares are not determined. Participants in such a regime usually have a special relationship, for example, they are married.

The characteristics of shared and joint ownership allow us to better understand the specifics of property regimes, highlight their common features and identify differences.

Joint ownership regime: emergence and legislative regulation

According to Art. 256 of the Civil Code of the Russian Federation, a joint ownership regime arises in relation to benefits acquired during marriage (for a peasant farm - Art. 257). Participants use them jointly, unless other provisions are provided for in a separate agreement.

Joint property can be disposed of with the consent of all participants. Each of the owners has the right to make transactions with the object, since it is assumed that approval for the transaction has already been received from the other party.

The common joint property of spouses is regulated by the norms of the Civil Code of the Russian Federation and the IC of the Russian Federation. The husband and wife can determine for themselves how to dispose of the property, for example, establishing shared ownership of an apartment.

Unless otherwise specified in the agreement between the spouses, the property of the husband/wife may be recognized as common. A prerequisite is that investments have been made through the joint or personal property of the other marriage partner that increase the value of the common property. Suppose a major renovation of the apartment took place.

In the absence of a dispute between spouses, the division of property occurs voluntarily. For this purpose, a written agreement is drawn up. If the husband and wife cannot reach a compromise, the issue is resolved in court.

The property of a farm belongs to its members on the right of common joint ownership, unless otherwise provided by agreement between the participants. In their possession:

• land plot;
• plantings;
• outbuildings and other buildings;
• reclamation and other structures;
• draft animals and so on.

All this must be purchased using the common funds of the members of the farm. Products and income from the activities of the organization are common property that is used with the consent of the co-owners.

If the operation of the farm ceases due to the exit of all its members or for other reasons, all of the above is divided by analogy with the share regime. If one of the members leaves, the land and means of production are not subject to division. In return, the citizen has the right to monetary compensation commensurate with his share.

The main thing about shared ownership

Basic information regarding what common property is is enshrined in the Civil Code of the Russian Federation (Articles 247-250). Ownership under such conditions is subject to the consent of all its owners. If a dispute arises, the participants go to court.

The owner can dispose of the share as he wants: donate it, bequeath it, pledge it, and so on. When alienating a part, the owner must comply with the conditions established by Art. 250 Civil Code (right of first refusal).

Each participant in shared ownership has the right to allocate his part.

If the owners' agreement does not provide for the procedure, you must act in accordance with the law. In Part 3 of Art. 252 of the Civil Code states that a shareholder may demand the allocation of a share in kind in court. If this cannot be done, monetary compensation is provided at the expense of the remaining co-owners.

In addition to joint property, there is also common shared property of spouses. As a rule, it arises on the basis of a marriage contract or agreement between husband and wife. Shared ownership is formed when the marriage partner allocates his share, for example, in an apartment. It should be noted that after this procedure, relationships are no longer regulated by the Family Code, but by the Civil Code.

Common joint property (OCS): disposal, property of spouses

Let's highlight the key points that are worth paying attention to.

How owners can suffer from a bona fide purchaser

Joint disposal means that each participant in the OSS can sell the common property, but only with the consent of the other participants. But here, as if in mockery, the code hid a surprise, this time for owners of joint property:

If suddenly one of the participants in the OSS decides to make a transaction with property without the permission of the other participants, at their request it can be terminated, but only if the acquirer knew that the alienator did not have the authority to complete the transaction (Article 253 of the Civil Code of the Russian Federation).

It turns out that if the property was registered in the name of one person, and the acquirer is able to prove in court that he had no idea about the presence of other owners, then it will not be possible to cancel the transaction. Here something else is interesting: why confiscate property from bona fide purchasers, on the basis of Art. 302, is possible only in transactions with shared ownership, but in transactions with joint ownership, termination of the contract and reclaiming the property is possible, on the contrary, from unscrupulous purchasers? Whereas Art. 302 protects common property rights (it does not say about the protection of exclusively shared or joint property).

Comparison of the two modes

The difference between joint and shared ownership is significant. An important role is played by nuances regarding the scope of the rights of co-owners, the procedure for operating things, the distribution of expenses, and so on.

A comparative analysis of the two modes is given in table form:

The above information clearly shows how joint property differs from shared property, and what are the features of property regimes.

Registration of a mortgage

Banks do not always issue mortgages secured by common property. This is due to the shared responsibility of borrowers. The chances of getting a loan are higher for spouses who are purchasing or already own a joint home.

There are nuances of obtaining a mortgage depending on the property regime. Shareholders can pledge shares without obtaining permission, which cannot be done by owners of joint property.

The difference in mortgages between forms of ownership lies in the amount of responsibility. Spouses who own joint property are jointly and severally liable for the obligation - the bank does not specifically determine which of them will make payments. In shared ownership, each shareholder is responsible to the creditor for his part and pays off the debt independently.

To sum it up: the main differences

Before moving on to the differences between shared and joint ownership, let us note their common features. In both cases, we are talking about property that implies the rights of several persons simultaneously to some property, for example, to residential real estate.

The main difference between the forms of ownership under consideration is that joint ownership does not have clearly defined percentages of ownership of the property, which are present in shared ownership.

It is from this fundamental rule that all other differences flow:

• with joint ownership, each of the owners of property value has identical rights to the corresponding object, and with shared ownership, the size of the shares, and, therefore, the scope of rights may differ;
• joint ownership can arise only in situations directly defined by the legislator, and shared ownership - in all other cases of common ownership;
• shared ownership is available to all citizens without taking into account the degree of their relationship, and joint ownership, as a rule, arises between spouses in the presence of officially registered marriage legal relations;
• co-owners of jointly owned property assets incur financial expenses for their maintenance and payment of tax payments in a joint and several manner, and owners who own their personal share pay the required expenses in proportion to the size of their property shares;
• in marital legal relations, joint legal ownership is established by default, upon the acquisition of common property by spouses, and shared ownership between spouses arises from contractual relations or a court decision;
• the owner of an object belonging to joint ownership can sell it only with the consent of the second co-owner, and the owner of a specific share in a common property object has the right to freely alienate his own part, observing the rule of priority redemption of the share by other shareholders.

Procedure for drawing up a land plot plan

All the details of buying a garage at GSK

Details about receiving benefits for capital repairs for pensioners after 70 years of age

What is land surveying, procedure

Apartment flood insurance

The procedure for restoring documents for an apartment

Which property regime is better?

To understand what is better, shared or joint ownership, you need to take into account the type and cost of the property:

1. Real estate – shared ownership is preferable. This will prevent infringement of rights during the division or sale of property.
2. Vehicles – it is better to choose shared ownership. Easier to design and use. If the car is very expensive, it is more logical to allocate shares.
3. Other property (jewelry, equipment, etc.) – there is no point in allocating shares. It is extremely difficult to identify them in nature.

If you have particularly valuable assets, such as diamonds, it is advisable to provide for the procedure for their use in the marriage contract/other agreement.

Often citizens do not know how to properly register ownership of an apartment in order to retain their right to property. This is another reason to choose shared ownership. A person will be sure that he has a certain part of the property, and if it cannot be allocated in kind, he will receive monetary compensation.

Features of dividing an apartment purchased during marriage

An apartment purchased during marriage can be registered to one owner. However, you need to remember that registering property rights for only one spouse has its pitfalls. We are talking about the possible division of jointly acquired property.

This situation most often arises in the process of divorce, but even if the family is preserved, it is quite likely that the second spouse will want to secure his right to real estate. And it is not at all necessary that the apartment or house will be divided equally.

If the spouses fail to reach an agreement through negotiations, the size of each share will be determined by the court. The interests of minor children, the existence of a marriage contract and other legally established nuances will be taken into account.

However, an owner who bought real estate while married and registered ownership only in his own name, in certain cases may well claim its indivisibility. There are several reasons for this decision.

Housing was purchased with money inherited or donated by a relative

In such a situation, you will need to take care of two things:

• record the fact of donation by agreement with a notary or make copies of documents on bank transfer of funds from the donor to the recipient. In an inheritance situation, you will need an appropriate notarial certificate;
• record the fact of transfer of funds for the purchased housing from the buyer’s personal account.

If the apartment was purchased in cash, you must have a document confirming the origin of the amount spent on the purchase. This will help subsequently prove that the purchased housing was, in fact, given to one of the spouses and the second cannot claim a share in it.

The apartment was purchased entirely with the owner’s income

If the second spouse is fully supported by the owner of the property without good reason, then the housing purchased during the marriage may go to the person who purchased it.

It should be borne in mind that the court may recognize the following as valid reasons for lack of income:

• the need to care for a sick relative, confirmed by a doctor’s conclusion (certificate of disability);
• the presence of minor children who are being raised by a non-working spouse;
• a serious illness that does not allow the second spouse to work and earn their own income.

Presence of a marriage contract

All possible property disputes can be described in detail in the marital agreement between the spouses. These necessarily include questions about the distribution of shares in real estate acquired during marriage.

A marriage contract is a document of title and is not contested in court, except in cases where the interests of minor children are directly affected. In such situations, the court will focus on family and civil law to protect the rights of the child.

Registration of real estate purchased during marriage in the name of one of the spouses somewhat simplifies the process of its registration, but in the future it can cause many unpleasant moments when dividing property.

Lawyers involved in real estate issues advise deciding on the distribution of shares between spouses even before the purchase. Registration of property rights in accordance with the agreements reached by the spouses will help avoid unnecessary conflicts later.