What is the difference between joint ownership and shared 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.

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What does the law say?

The law does not prohibit the ownership of one property by several people at once. Often, apartments and residential buildings are jointly owned by spouses, children and parents, other relatives, as well as complete strangers. In order to regulate the procedure for holding real estate in common ownership, the legislator introduced an article into the Civil Code of the Russian Federation (Civil Code of the Russian Federation) devoted to the main aspects of this issue. Thus, first of all, let us turn to Art. 244 of the Civil Code of the Russian Federation: it will help you understand how joint property differs from shared property.

The following feature helps to distinguish joint ownership from shared ownership: the presence of a definition of the shares of each owner in the OS. If the OS defines the shares of the owners, it will be considered shared ownership. If the shares are not allocated, and the owners own it jointly, it is, accordingly, joint property.

Since joint ownership does not provide for the determination of shares, in this case the owners dispose of the real estate or other property jointly (taking into account the principle of good faith). If the owners have a desire to divide the property, the law does not prohibit this. After division, the shares will constitute shared ownership.

Important! The shares can be either equal or unequal. Owners have the right to dispose of property within the limits of the shares that belong to them.

What is the difference between joint ownership and shared ownership?

There are 3 main types of property rights:

1. Property – property is owned by one person. He can dispose of it at his own discretion.
2. Common shared ownership - property is owned by several people. Each of them has a certain share.
3. Joint ownership - several owners, but without defining shares.

The type of ownership is prescribed in title documents: an extract from the Unified State Register of Real Estate, a purchase and sale agreement, a gift agreement, a certificate of inheritance, etc.

When does shared property between spouses arise?

As we have already noted, various questions regarding the disposal of OS often arise among married spouses. It should be noted that shared ownership of property (for example, an apartment owned by a husband and wife together) can arise when the contractual regime is applied. If the legal regime established by family law is used in relation to property, joint property arises. In order for an object of property to belong to spouses on the right of shared ownership (the difference is very important), it is necessary:

• conclude a marriage contract;
• conclude a separate agreement for the acquisition or creation of property assets.

If joint property is converted into shared property by concluding a marriage contract, then the contractual regime will apply to all property belonging to the spouses (and mentioned in the terms of the document). The conclusion of a separate contract for an object provides for the extension of the contractual regime to a certain property. In controversial situations, shared ownership of property can be established through the court.

Important! One part of the spouses’ property may be in shared ownership, and the other in joint ownership. Accordingly, for different objects of property it is possible to apply different regimes - both legal and contractual.

Common property is the ownership of a thing not by one, but simultaneously by two or more persons (co-owners). Common property relations are characterized by a plurality of subjects of ownership of a specific object. The right of common ownership is the right of two or more persons jointly, at their own discretion, to own, use and dispose of their property, which constitutes a single whole. In this case, co-owners, like any owners, own, use and dispose of the property belonging to them, but do not have the full right to the thing, being limited by the rights of other participants.

Common property - arises primarily when two or more persons acquire property that cannot be divided without changing its purpose (indivisible things) or property that is not subject to division by law. Property may be in common ownership with the determination of the share of each owner in the right of ownership (shared ownership) or without determining such shares (joint ownership). Common ownership of divisible property arises in cases directly provided for by law or agreement (clause 2 of Article 244 of the Civil Code ). For example, common property in relation to the property of spouses arises by force of law - Art. 33, 34 of the RF IC, and when creating a simple partnership, common property arises on the basis of Art. 1043 part 2 chapter 55 of the Civil Code of the Russian Federation. The basis for the emergence of common shared ownership of the property of the spouses is the marriage contract (Articles 41, 42 of the RF IC). In relations of joint ownership between the participants, the right to a common thing is not divided - it belongs to them jointly, jointly. None of the participants knows in advance their share, which is determined only in cases of division or allotment. Relations of joint (shareless) ownership develop between spouses or members of a peasant (farm), i.e. between persons related by close family ties. That is why the law establishes that common shared ownership is the rule, while joint ownership is an exception expressly provided for by law (clause 3 of Article 244 of the Civil Code of the Russian Federation). In the event of a paid alienation of a share to an outsider, the remaining participants in the common property have a pre-emptive right to purchase the sold share at the price for which it is sold, and on other equal conditions, except in cases of sale at public auction (Clause 1, Article 250 of the Civil Code of the Russian Federation). The pre-emptive right to purchase does not apply to the following cases: - sale of a share by one of the participants in the common property to another; — alienation under a rent agreement; - gratuitous alienation under a gift or donation agreement. Under certain conditions listed in paragraphs 2 and 3 of Art. 245 of the Civil Code of the Russian Federation, redistribution of shares in the right of common shared ownership is allowed. Thus, the procedure for determining and changing their shares depending on the contribution of each of them to the formation and growth of common property is established by agreement of all participants in the common property. In addition, a participant in shared ownership, who has carried out inseparable improvements to this property at his own expense in compliance with the established procedure for the use of common property, is granted the right to a corresponding increase in his share in the right to common property. An increase in the share can be made either by agreement of all participants in the common property, or by a court decision.

Shared ownership: pros and cons

Shared ownership is the actual allocation of a separate share of property to each owner of the property.

Example : The simplest example of shared ownership is a communal apartment. There is one common corridor for everyone, a common kitchen, a bathroom, a toilet and, perhaps, some other additional rooms. However, each share owner has his own separate room with personal entrance and exit, inaccessible to other owners. The owner of such a part can do whatever he wants with his share, but if he decides to sell it, he must first offer to buy the share to the other co-owners. This is called preemption. In addition, the use of common areas usually follows certain rules. For example, apartment No. 3 has kitchen hours from 9 to 10 and from 17 to 18 hours.

How to convert joint property into shared property

To transfer common property into shared property, you will need to follow the following algorithm:

• Specify the method of transfer: through the court or by agreement;
• Conclude an agreement certified by a notary or obtain a court ruling;
• Collect the established documentation package for Rosreestr;
• Submit documentation through the MFC or at the Rosreestr branch.

A week later, the parties receive a new statement of ownership and divided shares for each.

Having studied the features and nuances of separate and common ownership, citizens independently determine the appropriate option. You should also remember in what situations you can register only shared ownership.

Apartment with plenty of space

Today, such situations with the division of real estate shares, unfortunately, occur frequently. Therefore, the interpretation of the law by the Supreme Court may be necessary not only for judges, for whom these interpretations are given, but also for citizens who are faced with something similar.

So, in Ryazan, a young family decided to buy an apartment in a building under construction. All required documents have been completed. A year later, the couple divorced. They entered into an additional agreement with the developer to transfer the property from joint ownership to common ownership. But it didn't work out for them. The local Rosreestr refused to register the document. According to Rosreestr, the additional agreement “contains elements of a marriage contract, and it must be certified by a notary.” Local courts agreed with the opinion of the Ryazan Rosreestr. But the Supreme Court corrected its colleagues.

Now let's look at the situation in legal detail. A young family and a developer entered into an agreement to participate in shared construction. Such an agreement means that when construction is completed, the apartment becomes joint ownership. But a year later the marriage broke up, and the future apartment had not yet been built. After the divorce, the young people entered into an agreement on equal shares in the apartment under construction. Two years have passed, and the developer of the house under construction has changed. It became a local foundation.

Then the ex-spouses entered into an additional agreement with the company to the contract. They replaced “joint ownership” with “common share of 1/2” and handed over the paper for state registration. But Rosreestr demanded that it be notarized. Officials explained that the agreement contains elements of a marriage contract, since the ex-spouses are changing joint property to common property. Rosreestr referred to Article 38 of the Family Code. This article talks about the division of common property of spouses.

Then the ex-wife sent to the department an agreement on equal shares, which she and her husband concluded back in 2015. But the registrar felt that his former spouses should also have had their documents certified by a notary. Not agreeing with this decision, the ex-spouses filed a lawsuit against Rosreestr in the local district court.

In court, the exes stated that they entered into an agreement on August 24, 2015, then the wording of Article 38 of the Family Code on the division of the common property of spouses allowed the division agreement to be certified by a notary at will. Six months later, changes were made to this norm. According to the new changes, contacting a notary has become mandatory. Our heroes concluded the deal before the legislation changed. But Rosreestr continued to insist that both documents must be certified by a notary.

The district court agreed with the former spouses that the registrar misinterpreted the rule, so the agreement from 2015 does not need to be certified by a notary. But the additional agreement with the fund under the same part 2 of Article 38 of the Family Code needs to be certified, the first instance decided. Since the spouses did not do this, Rosreestr rightfully refused. In general, the district court denied the former spouses. And he did the right thing, the following local courts said.

Rosreestr is obliged to be guided by the rules on registration of rights, and not on family relations

The case was studied by the Judicial Collegium for Civil Cases of the Supreme Court and did not agree with the Ryazan decisions. The Supreme Court stated the following. According to Article 26 of the Law “On State Registration of Real Estate”, the grounds for suspension of state registration of rights are the lack of necessary documents, discrepancies in the form or content of documents. Judging by the case materials, the parties certified the additional agreement with their signatures and a document confirming the authority of the fund. But the defendant did not provide evidence that the requirements for drawing up an additional agreement were not met by either party. This means that Rosreestr illegally denied the former spouses.

According to the Supreme Court, all arguments that the document contains elements of a marriage contract are erroneous. Rosreestr should have been guided by the rules that regulate the procedure for registering rights, and not family relations.

The Supreme Court said that the law does not prohibit the registration of a newly created property in the shared ownership of construction participants. That is, in the additional agreement you can indicate which part of the apartment will go to each of the former spouses. As a result, the Supreme Court upheld the cassation appeal of the ex-wife and ordered the local office of Rosreestr to reconsider the issue of registering an additional agreement between the ex-spouses and the developer.

What's better?

What is best suited for registration is up to the future owners of the property to decide. Both options have both positive and negative sides. If the parties (spouses) want to have clearly demarcated share rights, they can divide the property and manage the directly owned share.

How to allocate a share in an apartment?

Also, separate ownership has a great advantage over common ownership when carrying out the divorce procedure. In addition, when dividing shares, an additional portion is allocated for children, parents or other relatives.

With common ownership, the parties have equal responsibilities, and if there are debts, for example, for housing and communal services, they will pay them jointly. Whereas with a share, only for your own part.

What is better: joint or shared ownership?

The differences between joint and shared ownership are quite significant and therefore it is impossible to say unequivocally which option is better in all respects. So, for example, joint ownership will be the optimal ownership option for close relatives and/or any other persons who get along well with each other or are able to take into account the opinions of other owners without much damage to themselves (and this should be true for all parties).

Shared ownership is different in that it provides the owner of the share with certain freedom. Not as comprehensive as with sole proprietorship, but still much greater than with joint ownership. This option is perfect for groups of people who cannot or do not want to get along with each other beyond certain rules and schedules. An ideal system for a communal apartment.

In each individual case, the features of joint or shared ownership can be expressed more or less clearly. You can deal with possible or existing problems with the help of experienced lawyers. During a free consultation, our specialists will provide useful information and they are ready to act as your representatives in court or in an out-of-court dispute with other owners.

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Author of the article

Natalya Fomicheva

Website expert lawyer. 10 years of experience. Inheritance matters. Family disputes. Housing and land law.

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