Disputes between co-owners
Possession and use of an apartment in shared ownership is carried out by agreement of all co-owners. Conflict situations often arise when co-owners cannot agree among themselves on the procedure for owning and using an apartment. For example, one of the participants in shared ownership may prevent others from accessing the apartment, create conditions incompatible with living, etc.
In this case, any of the co-owners has the right to go to court, which will establish the procedure for using the apartment. In resolving such a requirement, the court takes into account the actual procedure for using the property, which may not exactly correspond to the shares in the right of common ownership, the need of each of the co-owners for this property and the real possibility of joint use. However, even with a court decision establishing the procedure for using the apartment, it is impossible to completely eliminate conflicts (for example, if the other co-owner, not agreeing with the court decision, will in every possible way interfere with comfortable living).
In addition, a participant in shared ownership has the right to demand the separation of his share from the common property by agreement of the parties or in court. If the allotment of a share in kind is impossible, the allotted owner has the right to have the value of his share paid to him by other participants in shared ownership. Payment of compensation to a participant in shared ownership by the remaining owners instead of allocating his share in kind is permitted with his consent.
However, in cases where the owner’s share is insignificant, cannot be realistically allocated and he does not have a significant interest in the use of the common property, the court may, even in the absence of the consent of this owner, oblige the remaining participants in the shared ownership to pay him compensation.
The question of whether a participant in shared ownership has a significant interest in the use of common property is decided by the court in each specific case on the basis of a study and assessment of all evidence presented by the parties, confirming, in particular, the need for the use of this property due to age, health, professional activities, presence of children, other family members, including disabled people, etc. (Clause 36 of the Resolution of the Plenum of the Supreme Court of the Russian Federation No. 6, Plenum of the Supreme Arbitration Court of the Russian Federation No. 8 of July 1, 1996 “On some issues related to the application of part one of the Civil Code of the Russian Federation”).
The insignificance of the share is also determined in each specific case at the discretion of the court. The size of the share that can be considered insignificant is not established by law. As a rule, the court takes into account the area that corresponds to the existing share (and residential area is taken into account separately from non-residential), and on the basis of this decides whether such a share is insignificant.
Judicial practice has developed according to which the calculation of monetary compensation for a share should be made not on the market value of the share, but on the market value of the apartment. Obviously, the market value of a share is always lower than the cost of the entire apartment. Therefore, this decision seems fair. However, there are often situations when a participant in shared ownership does not have sufficient funds for redemption.
Thus, when purchasing a share in an apartment, you must be prepared for the following:
1) allocate a share in kind (and this is not always possible), or
2) determine in court the procedure for using the apartment, or
3) sell your share to other participants in shared ownership (if they have such an opportunity), or
4) buy back shares from other participants in shared ownership (they can be obligated to sell their shares only if such shares are recognized by the court as insignificant).
Possible nuances
There are four main questions that should be studied before signing an agreement and transferring money, namely:
- The procedure for concluding a transaction.
- Consequences of acquiring a share if other owners have not given consent to the transaction.
- What risks may arise if one of the owners is a minor?
- Who can be registered in the purchased living space?
If other owners are against
To sell a share, obtaining consent from the owners of neighboring shares is not required. Problems can only arise when the seller did not notify neighbors of his intention in accordance with the procedure established by law.
If the necessary regulations were observed and none of the owners expressed a desire to purchase a share, after concluding a purchase and sale transaction, no court will cancel it solely on the basis that the seller did not obtain consent to sell the share from all owners.
One of the owners is a minor
In this case, the seller must obtain permission from the guardianship and trusteeship authority before concluding the transaction. Such certificates are issued only if, after the sale of the share, the child’s living conditions either remain the same or become better. Otherwise, the guardianship will not approve the transaction.
If the consent of the guardianship and trusteeship authorities was not obtained before the paperwork was executed, but the agreement was still concluded and registered, the transaction can be canceled in court. An employee of the guardianship authorities or any other interested person can submit an application.
Limitation of the right to dispose of shares
The disposal of an apartment in shared ownership is also carried out by agreement of all co-owners. If one of them refuses to sell their share, it will not be possible to oblige him to do so. In this case, you will only be able to sell the share that belongs to you. Moreover, if the share is sold not to another participant in shared ownership, but to an outsider, the remaining co-owners must be notified of the sale, since they have the preemptive right to purchase the share being sold at the price for which it is sold (Clause 1, Article 250 Civil Code of the Russian Federation).
And only if the remaining owners of the shares do not purchase the share being sold within a month from the date of notification or refuse in writing to exercise the pre-emptive right to purchase before the expiration of this period, the seller has the right to sell his share to another person (and for the price offered to the other co-owners).
Transactions on the alienation of shares in the right of common ownership of real estate are subject to notarization, with the exception of transactions on the alienation by all participants in shared ownership of their shares in one transaction (Part 1, Article 42 of the Federal Law of July 13, 2015 N 218-FZ “On State Registration real estate"). Therefore, when performing them, it is necessary to take into account the explanations of the Federal Notary Chamber.
In particular, in the Methodological Recommendations for checking by a notary the observance of the preemptive right of purchase of a participant in shared ownership when certifying contracts for the sale of a share in the right of common ownership of real estate to an outsider, approved. by decision of the FNP Board (minutes dated March 28, 2016 N 03/16), explanations were given on the procedure for sending notices to other participants in shared ownership and on the procedure for obtaining waivers of the pre-emptive right to purchase.
Indisputable confirmation of sending a notice to participants in common shared ownership of real estate about the intention of one of the participants to sell his share to an outsider can be:
- a notary's certificate of transfer or sending of notice to a co-owner;
- a copy of the telegram issued by the post office, sent by the seller to the co-owner independently.
The inventory of the attachment, in the case of sending a letter to the co-owners with an inventory of the attachment, is not an indisputable confirmation of the sending of the corresponding notice, since the text of the inventory does not reflect the content of the notice.
There are often situations when the seller of a share does not know the registration address and the actual residence address of the co-owner, to which he needs to send a notice of the sale of the share. If there is no information about the registration of a participant in shared ownership at the place of residence or stay, including in the Unified State Register of Real Estate, in the Ministry of Internal Affairs, it is allowed to send a notice to the address of the location of the apartment.
Indisputable confirmation of the refusal of the participant in shared ownership to use the pre-emptive right to purchase is the presentation of a notarized refusal. If the notary is provided with the refusal of the co-owners, made in simple written form, the notary has the right to use the norms of Articles 15 and 41 of the Fundamentals of the Legislation of the Russian Federation on Notaries (postponing the performance of a notarial act and sending a corresponding request to the co-owners) in order to ensure the legality of the concluded sale agreement. In the case where the share belongs to a minor, it is required to obtain prior permission from the guardianship and trusteeship authority to waive the preemptive right.
When selling a share in violation of the pre-emptive right to purchase, the participant in shared ownership has the right, within three months, to demand in court the transfer of the rights and obligations of the buyer to him within three months. The specified three-month period is calculated from the day when such co-owner learned or should have learned about the violation of his right.
A judicial act that satisfies the claim for the transfer of the rights and obligations of the buyer will be the basis for making the appropriate entries in the Unified State Register of Real Estate. It should be borne in mind that the plaintiff in this case does not have the right to satisfy the claim to invalidate the transaction (clause 14 of the Resolution of the Plenum of the Supreme Court of the Russian Federation No. 10, the Plenum of the Supreme Arbitration Court of the Russian Federation No. 22 of April 29, 2010 “On some issues arising in judicial practice when resolving disputes related to the protection of property rights and other property rights").
Thus, a participant in shared ownership whose rights have been violated must pay the cost of the share to the buyer, and the buyer, in turn, has the right to demand compensation for losses from the seller of the share who entered into an agreement in violation of the preemptive right.
Pitfalls and risks when buying shares
Buying a home, even in shared ownership, is a very important stage in life. After all, most people, in order to earn money for an apartment, have to work in production for decades or pay off a mortgage for half their life. By the way, such loans are issued against the security of purchased or other real estate. Therefore, it is very important to carefully purchase a property before concluding a purchase and sale transaction:
- check the documents provided by the seller for authenticity;
- find out who left the apartment and for what reason;
- ask all existing owners to provide certificates that impair their legal capacity.
This way you will minimize possible risks and be able to identify fraudsters at the early stages of the transaction.
Before purchasing a share, always be on your guard, because such financial transactions are often accompanied by pitfalls, for example:
- Neighbors may turn out to be very conflict-ridden or lead a riotous lifestyle; living with them in the same apartment will be difficult, and selling or exchanging a share is definitely not possible quickly.
- If at least one of the owners has not yet reached the age of majority at the time of concluding the purchase and sale agreement, the transaction may be declared illegal at the initiative of the guardianship and trusteeship authorities.
New “trends” in the real estate market
Sale of a share under the guise of a separate studio apartment
In recent years, many offers of studio apartments located on the first floors of apartment buildings have appeared on the real estate market. Such studios are most often “cut” from three- or four-room apartments. For this purpose, redevelopments are made in the apartment, which are not always agreed upon in the prescribed manner. The buyer is offered to buy a separate apartment, but legally they are selling him a share in the apartment with an unapproved redevelopment.
This may lead to receiving an order from the authorized body to restore the apartment to its original condition, to a fine, and in some cases to the forced sale of the apartment at auction. All of these are the negative consequences of purchasing a share rather than an independent property.
Sale of a share without the right of residence
Another innovation in the real estate market is the sale of a “microshare” in an apartment “for registration.” There are advertisements for the sale of 1/8, 1/32, 1/50, 1/210, etc. shares Moreover, such shares are sold even in one-room apartments. In advertisements for the sale of shares, sellers honestly indicate that living in the apartment is impossible, and often indicate that it is impossible to view the apartment before buying a share in it.
An example of scammers' actions when selling a share in an apartment
One of the fraudulent schemes is this: after selling a share, the seller suddenly turns out to be allegedly incompetent, claiming that at the time of the transaction he simply could not control his actions and give an account of his actions. He goes to court and attaches the necessary documents. The court invalidates the transaction and cancels it. The seller moves into his room, and the court obliges him to return the money to the buyer. However, the seller, with all the desire to return the money, may simply not have it!
