The extinction of condominium is the disappearance of the joint ownership of a particular property by several people. Condominium is the joint property of several owners, with ownership quotas assigned to each of them.
The most common cause of the extinction of condominium is the owners' decision not to continue being part of this community. However, it is not the only one.
When it is not possible to carry out the extinction of the condominium by mutual agreement, and the property is indivisible, the division of the property will be carried out by auction.
Causes of the extinction of condominium:
The causes of the extinction of condominium are established in the Civil Code in its articles 395 to 406.
It is also necessary to take into account the Law of Civil Procedure, in the event that the division of property must be carried out through a judicial auction.
The causes of the extinction of condominium are, in principle, the same as those for the extinction of ownership, such as abandonment, destruction, or usurpation, among others.
However, due to the conditions of the condominium, the Civil Code establishes some specific causes:
Waiver of the rights of the co-owners in favor of one of them.
Sale of the property to a third party and distribution of the proceeds among the participants in the community.
Division of common property. Any co-owner has the right to request the division of property. It is a judicial procedure, the beginning of the division of a common property declares the extinction of the condominium. The result can be the material division, constituting a horizontal property, or economic if the property is indivisible. In this case, one of the owners maintains ownership, and the others receive compensation according to their quotas. It can also be divided by auction if there is no agreement between the parties.
Extinction of condominium by mutual agreement:
The extinction of condominium can be achieved by mutual agreement, choosing one of the prescribed forms, either that one of the owners acquires the undivided parts of the others or that the one who wishes to withdraw from the condominium receives compensation.
It is also possible for the property to be sold, and the co-owners distribute the money according to their quota shares.
The co-owners who opt for an agreement must carry out an appraisal of the property they wish to divide and establish pre-agreements on how the appraisal will be carried out, and also a commitment to accept said appraisal.
The deed of extinction of the condominium can be drawn up before a Notary, paying the corresponding tax.
In the case of a property that is the family home of a couple going through a divorce or separation, the extinction of the condominium must be included in the regulatory agreement.
If this agreement is approved by the court, it becomes the deed of extinction of the condominium together with the judgment. When done in this way, unlike divorce before a notary, the tax on Documented Legal Acts is not paid either.
Extinction of condominium through the courts:
If the co-owners do not agree, either on the price or the form of division of the property, the only possible course of action is to resort to the courts by filing a demand for the division of common property.
The action for the division of common property involves requesting the court to declare the extinction of the condominium, either by assigning each of the owners their corresponding part if the property is divisible, or by selling it and subsequently distributing the resulting money if it is indivisible.
In reality, there is no specific procedure in the laws to carry out the division of common property sentence, but the idea is to achieve it in the most expeditious way possible without violating the rights of any of the parties.
For this reason, one of the most commonly used procedures is provided for by Article 670 of the Civil Procedure Law, which establishes the auction or public sale of the property.
Required documentation:
Property titles for the assets subject to the dissolution of the community.
ID cards of the co-owners. If any company is involved, the powers or appointment of current administrators.
For urban properties, a certificate from the community of owners indicating that they are up to date with community expenses.
Cadastral references of the assets (last property tax receipt).
Whether or not the assets are leased.
The value assigned to each asset.
How the assets are awarded to co-owners.
How the expenses of the operation are paid: Notary fees, municipal capital gains tax (if it concerns urban properties).