Co-owners of a real property must know their rights and obligations and how to claim any benefit obtained by one co-owner to the detriment of the others. The joint exploitation and joint management of a thing, movable or immovable, is usually a cause of disputes and quarrels between co-owners, who seek at all costs the dissolution of the community of rights, even by judicial means.
It is often observed, particularly in large families, that with the passage of years the full ownership of a real property is divided among more than one co-owner. This occurs when, after the death of the owner-father, the property is inherited by his children according to each one’s hereditary share, and even by his grandchildren, in the event of death or renunciation of inheritance by the children. The transfer in this manner of undivided ownership shares of the property to numerous owners usually becomes the starting point for future disputes and recriminations, due to disagreement as to the exploitation of the common thing. The co-ownership of the common property, which arose against their will, among other things, exacerbates their personal differences, with the result that finding common ground for its management becomes impossible.
Exploitation of the common property by majority decision of the co-owners
Pursuant to the provision of Article 789 of the Civil Code (AK), the manner of regular administration and exploitation appropriate to the common object may be determined by a decision of the majority of the co-owners (community members). The majority is calculated on the basis of the size of the co-owners’ shares. Each co-owner’s decision concerns only his share, and the majority is formed by the sum of the individual shares (Areios Pagos 212/2003, Elliniki Dikaiosyni 45.466). Following from the above, since the deciding majority is reckoned by shares (i.e. percentages of undivided ownership) and not by heads, where there are only two co-owners, the majority is constituted by one of them, if he has the larger share.
Example: First cousins X1, X2, X3 and X4 acquired an undivided 25% full ownership share each in an agricultural plot. X1, X2 and X3 may decide to lease the entire property to a third party, despite X4’s disagreement, since the three of them hold 75% of the undivided full ownership of the property. If X1 subsequently purchases the undivided full ownership shares of X2 and X3, thereby becoming owner of 75% of the agricultural plot, his share will constitute the majority of the community members and he will accordingly be able to decide on the exploitation of the property without X4’s participation, provided that the conditions analysed below are met.
Leasing of the common property by majority decision of the co-owners
The acts of regular administration and exploitation of the common thing include the lease agreement concerning it, as well as any other act tending to maintain or remove the consequences of the lease. From the combined provisions of Articles 481, 494, 495, 574, 788 and 790 of the Civil Code (AK) it follows that, if the leased thing belongs by co-ownership to several persons, then for its leasing a decision of all or of the majority of the co-owners or a decision of the court or of the appointed administrator is required. The granting of the use of the common thing constitutes an act of management and not of disposal. For this reason, it is impossible for a co-owner to lease only his ideal share, since the granting of the use of the leased thing is by its nature indivisible (Kafkas, pp. 246–48; Vallindas 6.49; Thessaloniki Court of Appeals 364/52, EEN 20, 46). The decision of the majority taken within the framework of Article 789 AK does not concern only the internal relations of the community members, but also entails the power of representation, and consequently is valid and binds all community members, that is, even those who disagreed and were in the minority, even if they did not take part in it (Athens Court of Appeals 475/03, Elliniki Dikaiosyni 2004.1086).
Example: K1 and K2 hold 75% and 25% respectively of the undivided full ownership of an apartment and disagree as to its exploitation. K1 wishes to lease the property and to collect the rent jointly with K2 in proportion to their shares, while K2’s wish is for the property to be sold immediately. K1, as owner of 75% of the property, constitutes by his share the majority of the community members in the common thing and may lease the entire apartment to a third party, collecting the entire rent. He has, however, the obligation to pay K2 the percentage of the rent that corresponds to her share, namely 25% of the rent received, after deduction of management costs, as benefit from the exploitation of the property. However, it is proper that he notify K2 of his decision in good time, by extra-judicial notice served by a bailiff. K1 cannot lease only his own share in the apartment, since this is legally and practically impossible, and his decision to lease the property also binds K2 vis-à-vis the future tenant.
Obligations of co-owners exploiting the common property towards the others
Community members who make exclusive use of the common property are obliged to provide the other community members, even if they have not claimed joint use of the common thing, with compensation for the benefit which would have accrued to them had they used the common property, which corresponds to the rental value of their share at the time of its exclusive use, while any claim for fruits is limited to the balance after deduction of the maintenance, administration and use expenses of the common thing, which constitute acts of management of the common thing (see Areios Pagos 74/2004, Elliniki Dikaiosyni 45.780; Athens Court of Appeals 3908/1999, Elliniki Dikaiosyni 40.1609; Piraeus Court of Appeals 640/1997, Elliniki Dikaiosyni 40.416). It is noted that, in the case of leasing of the common property by some of the co-owners, the benefit they obtained from the use of the shares of the other co-owners does not constitute rent, since there is no lease relationship, but is rendered under the provisions on the community of rights pursuant to Articles 786, 787, 792 §2, 962 and 1113 of the Civil Code (AK 1671/1995, Elliniki Dikaiosyni 39.367; Piraeus Court of Appeals 6407/1997, Elliniki Dikaiosyni 40.416). The consequence of this is that, when a lawsuit is brought for the rendering of this benefit by the co-owners against the others, since what is sought is not the rent but the benefit corresponding to the rental value, on the one hand no stamp duty is payable (Piraeus Court of Appeals 839/2000, Elliniki Dikaiosyni 2001.804; Athens Court of Appeals 12554/1988, Archeio Nomologias 40.267) and on the other hand the said amounts are payable with statutory interest from the service of the lawsuit and not from the end of each rental month.
Right of judicial claim of the benefit obtained by co-owners in the case of leasing of the common thing — method of calculation — elements of definiteness of the lawsuit
From the provision of Article 1113 of the Civil Code (AK) (which states that “if the ownership of the thing belongs to several persons in undivided ideal shares, the provisions on community apply”) it follows that, where one of the community members makes exclusive use of the common thing, the other community members, irrespective of whether they had advanced claims for joint use of the thing, are entitled to demand from the community member who used the common thing exclusively that he render to them the benefit (under Articles 785, 786, 787, 792 §2 AK) which he obtained from the exclusive use and which corresponds to their share. This benefit (the benefit payable in the event of exclusive use of the common thing), in the case of an urban real property, is equivalent to the rental value which the shares of the community members who did not use it had at the time of the exclusive use of the common property. The said (acquired and payable) benefit does not constitute rent, but a statutory debt arising from the aforementioned provisions (AP 1465/2006, published on NOMOS; AP 1480/2000, Elliniki Dikaiosyni 2001, 670; Athens Court of Appeals 6386/2009, Elliniki Dikaiosyni 2010, 554; Athens Court of Appeals 134/2008, Elliniki Dikaiosyni 2008, 893). For this compensation to be assessed, account is taken of the rental conditions of the area where the common property is located, in conjunction with its position and condition, where it concerns a building (AP 181/1974, NoB 23, 723; Athens Court of Appeals 6386/2009, Elliniki Dikaiosyni 2010, 554).
Consequently, in view also of Articles 111 §2, 118 item 4 and 216 §1 of the Code of Civil Procedure (KPolD), in order for the community member’s lawsuit by which he claims from the co-owner who made exclusive use of the common thing compensation for a specified period of time to be definite, it suffices that there be specified in it the common object and the plaintiff’s share therein, that the defendant co-owner made exclusive use of it, the benefits the latter obtained from the exclusive use, and the proportional share of the plaintiff in such benefit, which, in the case of an urban real property, corresponds to the rental value of the thing. No other element, and in particular no reference in the relevant lawsuit to comparative data for ascertaining the rental value of the common urban real property, is required, since the said value will emerge from the evidence (AP 1465/2006, AP 1480/2000, published on NOMOS; Athens Court of Appeals 6386/2009, Elliniki Dikaiosyni 2010, 554).
In the same example as above, if K1 leases the property and does not render to K2 the benefit obtained from its leasing, then K2 may claim it judicially, by filing a lawsuit against K1. This benefit consists of 25% of the rental value of K2’s share in the property for as long as K1 exploited it, after deduction of 25% of the costs of exploitation, administration and maintenance of the apartment (e.g. the costs of repairing the plumbing installation, the painting expenses, the broker’s fee, etc.).
Who bears the maintenance, exploitation and administration expenses of the common property?
Pursuant to the provision of Article 794 of the Civil Code (AK), the expenses of co-owners for the administration, exploitation and maintenance of the common thing burden all co-owners in proportion to their share. The decision to incur the specific expenses must have been taken by the majority of the co-owners (community members) or by virtue of a court ruling. Such expenses may include the cost of fencing an agricultural plot, the cost of painting an apartment, the cost of changing a lock, a broker’s fee for renting out a property, the costs of repairing a plumbing installation and the cost of thermal insulation due to mould on the walls.
Can expenses incurred for the maintenance of the property by one of the co-owners be claimed?
If one of the co-owners has incurred maintenance expenses or exploitation expenses of the common property, he is entitled to claim these amounts from the other co-owners in proportion to each one’s share, always provided that the action was taken pursuant to a decision of the majority of the co-owners or a relevant court ruling.
Defence of the majority of co-owners — filing of an ordinary lawsuit for the appointment of an administrator over the common property in case of exploitation by minority decision
Pursuant to Article 790 AK, if the administration and use of the common thing has not been determined by common agreement or by majority, each of the community members has the right to request that the court regulate it in the manner most appropriate and most beneficial to all community members. If necessary, the court may appoint an administrator. This provision does not specify the methods of administration of the common thing by court ruling, and only by way of indication is the appointment of an administrator provided. This regulation does not tend to the determination of a substantive right, but constitutes a regulatory intervention by the court, aiming at finding, on the basis of the prevailing circumstances at any given time, the most appropriate manner for all community members of administration and use of the common thing (AP 1118/1995, Elliniki Dikaiosyni 38.589). Thus the court, to which any community member may apply, invoking, among other things, the absence of a decision of all or of the majority of them (AP 1769/1998, Elliniki Dikaiosyni 32.92), regulates the administration or use of the common property in the manner most appropriate and beneficial to all community members, having also the possibility, for the better achievement of the community members’ common purpose, to appoint an administrator, whose powers, defined in the ruling, include any act of administration and management of the common property tending to the exploitation, use, taking of fruits and increase in value of the common property for the benefit of the community members, and therefore also its leasing, as well as the collection of rents of the common thing which had been leased prior to the appointment of the administrator (Athens Court of Appeals 9314/1996, Elliniki Dikaiosyni 38.1654; Athens Court of Appeals 5562/1992, Elliniki Dikaiosyni 35.146).
Defence of the majority of co-owners — application for interim measures for the appointment of an administrator over the common property in case of exploitation by minority decision
In urgent cases or to avert imminent danger, it is possible to obtain interim measures for the temporary regulation of the administration of the common property, and consequently the appointment of an administrator may be sought by application for interim measures, which is heard pursuant to the provisions of Articles 682 et seq. and 731 et seq. of the Code of Civil Procedure (KPolD), before the territorially competent Single-Member Court of First Instance and, in the case where the common thing is real property, in the special (exclusive) procedure of the place where the common property is situated (AP 283/75, NoB 29.1069; AP 282/72, NoB 20.1932; Athens Court of Appeals 4188/74, NoB 27.998; Athens Single-Member Court of First Instance 19275/95, DEE 1996.268). In this case, in the application for interim measures, which may have as its sole request the appointment of an administrator, since this may be the only beneficial manner of administration of the common property, there may be stated, in addition to the elements specified in Article 118 KPolD: 1) the existence of a community between the parties, 2) the absence of a unanimous or majority decision, since this is a precondition for accepting the application, 3) the assertion that the applicant is in possession of the common property, 4) proof by the applicant as to the more appropriate and proper manner of administration and management in his judgement, and 5) the existence of an urgent case or the averting of imminent danger from delay.
Example: The above-mentioned K2, although she notified K1 by extra-judicial notice served by a bailiff of her decision not to participate in any leasing of the common apartment to a third party, hands over the keys of the apartment to her son, who is preparing to move into the apartment. K1, who in the meantime learns of K2’s intentions, may file an ordinary lawsuit against K2 requesting the appointment of an administrator over the property. However, since the immediate installation of K2’s son in the apartment is imminent, K1 may also seek the appointment of an administrator by application for interim measures and at the same time request the immediate issuance of a temporary restraining order by the court prohibiting any possessory act by K2 on the property, such as the installation of her son therein.
Elements that render the majority decision of the co-owners for exploitation of the common thing void or abusive
From the combined provisions of Articles 725 to 729 of the AK it follows that the majority of the co-owners may, by decision according to the size of their shares in the common thing, determine the manner of administration, use and exploitation of the common property, appoint an administrator thereof and define the powers granted to him, subject to the restrictions of Articles 789, 790 and 729 AK. These provisions prohibit the majority from determining a manner of administration and exploitation of the common property which is incompatible with its nature and destination and with the rules of diligent management for the benefit of all community members, or which entails a substantial alteration of the common property or a disproportionately costly addition thereto, or deprives any of the community members entirely or partly of the proper proportion of the benefits of the common thing. Non-compliance with these restrictions renders the majority decision void and ineffective, pursuant to the provisions of Articles 174 and 180 AK.
A decision of the co-owners which does not constitute a violation of the above restrictions may be challenged by the minority as abusive, within the meaning of Article 281 AK, where, due to certain facts relating to the majority decision itself, the exercise of the right contained therein manifestly exceeds the limits imposed by good faith or morality or the social or economic purpose of the right (AP 212/2003, op. cit.).
Defence of the minority of co-owners — filing of an ordinary lawsuit for the nullity or abusiveness of the majority decision regarding the exploitation of the common thing
From the above it clearly follows that, in the event that the majority, exercising its right, makes use of the common urban real property (residence), an act falling within the regular administration and exploitation within the meaning of Article 789 AK (Athens Court of Appeals 4916/1999, Elliniki Dikaiosyni 41.183), the remaining co-owners constituting the minority have the right to challenge the majority decision for nullity only when the majority decision exceeds the framework of the rules that must govern the regular administration and exploitation of the common property as delineated by the aforementioned provision of Article 789 AK and does not safeguard the interests of all community members, in which case it is unlawful or abusive, by asserting that the manner of exploitation decided by the majority is not appropriate because it is contrary to good faith and harms the legitimate interests of the other community members whose opinion was not sought and who were not heard, and that the majority decision taken is not in accordance with the nature and destination of the common thing and the rules of regular management and exploitation for the benefit of all community members. The minority’s relevant lawsuit for the nullity of the decision and for the determination by the court of the manner of regular exploitation proposed by the minority as appropriate is brought before and heard by the competent court under the ordinary procedure (Athens Court of Appeals 13433/1987, Elliniki Dikaiosyni 30.346). The competent court is the Multi-Member Court of First Instance, since the subject matter of the said proceedings cannot be assessed in monetary terms (Article 18 §1 KPolD; see also Athens Court of Appeals 4857/99, DEE 1999.873; Athens Court of Appeals 9314/1996, Elliniki Dikaiosyni 38.1654).
Damages for tort by co-owners in the case of exploitation of the common thing by a co-owner through an unlawful act
If the exclusive use of the common property by one of the community members occurred because he took possession of it by an unlawful act, the other community members may also claim further damages for tort (AP 1761/2008).
Defence of the minority of co-owners — application for interim measures for the appointment of an administrator over the common property in case of nullity or abusiveness of the majority decision
However, the appointment of an administrator of the common thing is also made by court ruling even where there exists a unanimous or majority decision of the community members regarding the manner of administration of the common thing, and in the aforementioned case where the majority decision, due to violation of the restrictions imposed by Articles 789, 790 and 792, is void and ineffective under the provisions of Articles 174 and 180 AK, or constitutes, within the meaning of Article 281 AK, an abuse of right by those in the majority, in which case, in the existence of an urgent case or the need to avert imminent danger, the minority may, by challenging the majority decision as legally non-existent for the above reasons, which the court will examine incidentally pursuant to Article 284 KPolD, request that, for the safeguarding and preservation of its (the minority’s) right, the appropriate interim measures from time to time be ordered, pursuant to Articles 18, 682 §1, 683 §1, 684, 686 et seq., 731 and 732 KPolD, by the court, namely the appropriate manner, for the benefit of the community members, of determining the administration of the common property and the appointment of an administrator (AP 556/1971, NoB 20.21; see Tzifras, Interim Measures, 4th ed., pp. 334, 335, 340, 341). Furthermore, from the provisions of Articles 682 and 688 KPolD it clearly follows that the granting of interim measures is permitted and ordered in the event of imminent danger constituting the disputed right or claim and for its aversion, or in the event of an urgent case requiring the swift and immediate granting of judicial protective measures before or during the ordinary declaratory proceedings (Athens Single-Member Court of First Instance 3066/99, D 30.521). By requiring imminent danger or an urgent case, the law clearly means the existence of an unusual need for extraordinary judicial protection of the parties, justified by the existence of present factual circumstances of some specific risk of frustration of the claim or an urgent case of the present moment.
From the interpretation of the above provisions, it clearly follows that the court may also, in the form of an interim measure: a) apportion the use of the common thing among the community members in proportion to their shares, provided of course that this is feasible, and where it concerns urban real property, order joint occupation of certain parts thereof, b) order that the use of the common thing pass entirely to one or more community members or even to a third party by leasing of their shares, with payment of consideration in proportion to their share and the benefit from its use, c) order alternating use of the common object, where this is possible, and d) appoint an administrator of the common thing. Finally, pursuant to the provision of Article 692 §1 KPolD, the court may order such interim measures as are appropriate in each case and is not obliged to order the measure requested (see AP 283/1975, NoB 23.1069).
Example: The above-mentioned K1, in order to obtain the greatest possible profit from leasing the common property, decides to divide it into two apartments without obtaining a building permit. K2 may request from the court, through the procedure of interim measures, the issuance of a ruling and a temporary restraining order by which a) K1 will be prohibited from carrying out any act of dividing the apartment into two smaller ones, and b) an administrator of the property will be appointed, since K1’s decision will, on the one hand, subject both of them to large expenses in proportion to each one’s share and, on the other hand, will result in a substantial and town-planning unauthorised alteration of the property.
The co-owner community member exploits the entire common thing and not only a part thereof in proportion to his share
Each community member’s right to use the common object is independent of his share therein, since his power over the common object is distinguished into an ideal share theoretically but not in practice, inasmuch as the physical acts by which this (immediate) power is exercised do not admit of such apportionment that each may exercise over it as much power as corresponds to his share. Thus, if the common object is in the possession of one of the community members, he is entitled to its overall use and not only to the use of such part as corresponds to his share, on condition, however, that the joint use of the other community members is not impeded, that is, joint use which is in fact exercised or claimed by them and not that which might possibly and abstractly be claimed, since this is how the extent of the right under AK 787 is defined (see AP 2348/2009, published on NOMOS).
Co-ownership of agricultural plots in the Greek countryside
Innumerable cases of co-ownership in real properties by many co-owners are observed in the Greek provinces, where, due to the high birth rate in the past, undivided ownership shares of most cultivable agricultural plots have devolved upon many relatives and co-heirs. It is indeed common for most co-owners not to have title deeds, since by custom sales and wills were concluded orally and informally, as the word of the parties sufficed to sell or bequeath a property. As a result, the phenomenon arises of ownership shares of agricultural plots belonging to many co-owners, who disagree as to their use and exploitation. The problem is usually addressed in practice by a notional, fictitious division of agricultural plots into several parts, where each co-owner exploits his own part at will. This informal partition, although not lawful, constitutes a convenient solution for avoiding disputes between the co-owners. It is particularly noted that the leasing (renting) of part of the agricultural plot to a third party is not permissible, owing to the character of the use as an indivisible right (AP 1817/06, ChrID 2007.2008), and the relevant lease agreement is void (Dodecanese Court of Appeals 150/08, Nomos). That is to say, the disposal by the co-owner of his ideal share over a specific part of the common agricultural plot, and the creation of separate ownership over a part of the common thing, is void (AP 507/2013; AP 207/1973, EEN 40.698; AP 1265/1976, NoB 24.892; and Opinion 7/2011 of the Public Prosecutor’s Office of Areios Pagos).
Our law office has extensive experience in handling cases concerning the exploitation of real property by multiple co-owners. Do not hesitate to schedule an appointment with us so that we may advise you responsibly and indicate the appropriate steps for resolving your problem.
See also the article Sale of Real Property
FREQUENTLY ASKED QUESTIONS ON CO-OWNERS OF REAL PROPERTY
1. What can I do if a co-owner exploits the common property alone?
When one co-owner makes exclusive use of the common property or leases it without rendering the share due to you, you have the right to claim the benefit he obtained from the use of your own percentage. This benefit, in the case of an urban real property, equals the rental value of your share at the time of the exclusive use, after deduction of the corresponding management and maintenance expenses.
In practice, the lawyer files a lawsuit against the co-owner who used the common property, on the basis of Articles 785, 786, 787, 792 §2 and 1113 of the Civil Code (AK). An important advantage: this claim does not constitute rent, so it is not burdened with stamp duty.
2. I hold 75% — can I lease the property without the other co-owner’s consent?
As a rule, yes. Pursuant to Article 789 AK, the manner of regular administration and exploitation of the common property is determined by majority decision, which is calculated by shares and not by heads. Whoever holds the larger percentage constitutes the majority on his own and his decision binds the minority too, even if the minority disagrees.
The lawyer, however, recommends that the decision be notified in good time to the other co-owners by extra-judicial notice served by a bailiff. This safeguards the validity of the lease and forecloses future claims of abusive exercise of right or covert exploitation.
3. How is the compensation I am entitled to as a minority co-owner calculated?
The compensation equals the rental value of your share during the period of exclusive use of the property by the other co-owner. Account is taken of the rental conditions of the area, the position and condition of the property. From this amount, your proportion of the management, maintenance and exploitation expenses is deducted (broker’s fees, repairs, painting, etc.).
In the lawsuit it suffices to specify the object, your share, the exclusive use by the defendant and the rental value; reference to comparative data is not required, as these emerge from the evidence. Interest is calculated from the service of the lawsuit, not from the end of each month.
4. What do I do if the minority is in practice obstructing the exploitation of the property?
When the minority co-owner acts obstructively — handing over keys to third parties, installing relatives in the property, or refusing to cooperate — the lawyer files a lawsuit for the appointment of an administrator under Article 790 AK. At the same time, an application for interim measures is submitted to the territorially competent Single-Member Court of First Instance, with a concurrent request for a temporary restraining order.
The temporary restraining order is issued immediately and prohibits any possessory act undermining the agreed or lawful exploitation. The appointed administrator takes over the leasing, the collection of rents and any administrative act serving the common interest of the co-owners.
5. How do I challenge an abusive majority decision as a minority co-owner?
When the majority decision exceeds the limits of regular administration, alters the nature and destination of the property, entails disproportionate expenditure, or deprives you of the proper share in the benefits, it is void under Articles 174 and 180 AK. If it does not formally violate the restrictions but is contrary to good faith, it may be challenged as abusive (Article 281 AK).
The lawyer files an ordinary lawsuit before the Multi-Member Court of First Instance, since the subject matter cannot be assessed in monetary terms. A declaration of nullity or abusiveness is sought, together with the determination by the court of the appropriate manner of exploitation, possibly with the appointment of an administrator.
6. What is the role of the lawyer in disputes between co-owners?
The lawyer first assesses the co-ownership percentages, the title deeds and any majority decisions, in order to identify whether the client belongs to the majority or the minority and what tools are available. He then drafts extra-judicial notices, negotiates the dissolution of the community, or prepares a lawsuit for the rendering of benefit, damages for tort, or appointment of an administrator.
Where there is urgency, he files an application for interim measures with a temporary restraining order. He follows the case until the final ruling and, if necessary, proceeds to a partition lawsuit or auction for the dissolution of co-ownership, ensuring that the client’s share secures the maximum economic and legal protection.