What Does It Consist Of?
First, let's understand what a community or condominium is. It occurs when a property or right is shared among several people.
Additionally, ownership shares are assigned to each individual. If the property in question is real estate, it is referred to as co-ownership or a condominium, although these terms are often used interchangeably.
Once we are clear on what a community is, we can discuss the termination or dissolution of a condominium. Essentially, it refers to the end of a shared ownership situation involving a property.
Sometimes, you might hear other terms like "pro indiviso," "co-ownership," or "common ownership," but they all mean the same thing.
Types of Condominium Termination
Termination by Mutual Agreement
When all parties agree, terminating the condominium is straightforward. One party can buy out the shares of the others, or the person wanting to leave can receive compensation. Alternatively, the property can be sold, and the proceeds divided among the owners according to their shares.
Before proceeding, the owners must appraise the property and agree on how to proceed. They can then formalize the process at a notary by drafting a deed and paying the necessary taxes.
If the property is the home of a divorcing couple, the agreement must also be included in the regulatory agreement. If approved by the court, the agreement and the ruling become the deed that cancels the condominium.
Termination Through Judicial Process
If there is no agreement, the only option is to go to court and file a lawsuit to divide the property. The court will decide whether each party receives their share or whether the property is sold, and the proceeds are divided.
While no specific procedure is outlined in the law, this is generally done through a public auction to sell the property.
Required Documentation
Property titles for the assets subject to community dissolution.
IDs (DNI) of the co-owners. If a company is involved, valid powers of attorney or current administrator appointments.
For urban properties, a certificate from the homeowners' association confirming community fees are up to date.
Cadastral references for the properties (latest Property Tax (IBI) receipt).
Information on whether the properties are rented.
Assigned value for each property.
Allocation of assets to co-owners.
Payment details for operation costs: Notary fees, municipal capital gains tax (if urban properties are involved).
When Can This Service Be Used?
The causes for condominium termination are outlined in the Civil Code, Articles 395 to 406.
Additionally, the Civil Procedure Law applies if the division of assets must be carried out through a judicial auction.
The causes for condominium termination are generally the same as those for ownership termination, such as abandonment, destruction, or usurpation.
However, due to the nature of condominiums, the Civil Code specifies some particular causes:
Renunciation of rights by co-owners in favor of one of them.
Sale of the property to a third party and distribution of the proceeds among the community members.
Division of common property. Any co-owner has the right to request the division of assets. A judicial process initiates the division of a common asset, resulting in the termination of the condominium.
The outcome could be:
Material division, creating a horizontal property.
Economic division if the asset is indivisible, where one owner retains ownership, and others receive compensation according to their shares.
Division by auction if there is no agreement among the parties.
The most common cause for condominium termination is the owners’ decision to no longer remain part of the community. However, as we have seen, it is not the only one.