Co-ownership: buying or owning a property jointly

What is co-ownership?

The simple definition: co-ownership means that several people own a specifically defined portion of a property collectively. Legal basis: Art. 646–651 of the Swiss Civil Code (CC).

The rights and obligations for each co-owner are the same as the rights and obligations of any other owner. All decisions relating to the property must be approved by the majority of the co-owners.

Differences between joint ownership and other forms of ownership

The main difference with joint ownership is that there is no community ownership structure between the co-owners and they are not personally linked to one another – making it more flexible and allowing you to sell your share of ownership at any time.

In the case of joint ownership, a legal or contractual relationship must be present. This is the case in a community of heirs, for example, or when a married couple record their joint ownership in a contract. In order to sell a share, the owner wanting to make the sale must obtain the consent of all parties.

Condominium ownership is a particular type of co-ownership, and specific legal provisions apply. Through condominium ownership, freehold flats in a multi-dwelling unit are allocated to the individual owners. It’s not a community of owners, but each owner can have their own spatially defined portion of ownership for their sole use.

Finally, there is also sole ownership. As the name implies, in this case only one person owns a property.

How does co-ownership come about?

Co-ownership can arise in two ways: purchasing a property or converting an ownership structure.

Purchasing a property = co-ownership occurs when property is bought by multiple people and the co-ownership ratio is specifically determined.

Conversion of ownership = sole ownership and joint ownership can be converted into co-ownership. This can take place via the sale of shares of co-ownership by the sole owner or through an inheritance, by which the heirs become co-owners.

What does dependent or subjective in-rem co-ownership mean?

This refers to a share of co-ownership that is inseparably tied to the main property (i.e. dependent), for example a parking space or similar – facilities that are valuable to the entire property and therefore may not be sold separately. It is subject to neither the right to dissolution nor statutory right of pre-emption.

Rights and obligations of co-owners

As a co-owner, you naturally have certain rights and obligations:

The rights of co-owners

First of all there is obviously the right to give away, mortgage, bequeath or sell your share of ownership.

There are generally no restrictions on the use of the co-owned property within a property or house. With a co-owned apartment, usage can be limited to certain rooms. For condominiums, this is shown through the division into different residential units.

The obligations of co-owners

There are also certain obligations linked with co-ownership. The main one is bearing costs such as management fees, costs for construction work, maintenance of various systems – as long as the decisions are made by the majority and regardless of whether the affected co-owners use the systems in question.

Transfer and dissolution of co-ownership

Because co-owners can sell, bequeath or give away their share of ownership, this transfer of ownership must be recorded in the land register. A transfer is also possible when changing the co-ownership proportions.

Furthermore, the co-owners have the right to request the dissolution of the co-ownership (in accordance with Art. 650 (1) of the Swiss Civil Code), at least under certain conditions. The dissolution can be achieved through division or through a sale. The co-owners can also exclude dissolution for a certain period of time by agreement, but only for a maximum of 50 years.

If no agreement can be made regarding the dissolution, what is known as a division order can be imposed. In this case, a judge can have the co-owned property auctioned off. If the defendant(s) want to purchase the property, the auction will be carried out among the co-owners. Otherwise the property will be put up for public auction.

What else co-owners should be aware of when selling property

When selling a share of co-ownership, the statutory right of pre-emption applies (Art. 682 (1) Swiss Civil Code). This means the other co-owners have priority as potential buyers. They may waive or revise this right, but this needs to be publicly registered.

Regardless of the right of pre-emption, the sale of a share of co-ownership can also be difficult to organise depending on the type of property. A share of a family home isn’t a particularly attractive prospect, while an apartment in a condominium, for example, is easier to sell.