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What is an indivision?

Following a divorce or an inheritance, you may at any time be affected by joint ownership. Although at first sight this formula seems ideal, it has its limits. Indeed, the ownership of a property by several people is not always obvious, especially in case of conflict.

What are the risks associated with this model? What are the necessary precautions to take? Is it possible to get out of indivision?

In the following sections we will answer all these questions to avoid that the beautiful story of the family inheritance or the construction of the dream between friends or couple ends in court.

2.1 What is joint ownership?

This is the situation in which two or more individuals find themselves when they jointly own one or more properties. You can be under the indivision status following:

  • Buying a common property
  • Receiving an inheritance
  • A divorce when you are married under the community of property regime and the sharing of the community has not been carried out.
    1. How joint ownership works?

How to manage a joint property?

Joint ownership is often preferred over other solutions when buying real estate because it is:

  • Fast
  • Cheap
  • There are very few formalities to complete

Each person becomes the owner during the act of purchase up to their financial contribution. The individuals who hold shares in this furnished property are called co-owners (indivisaires in French) and are required to manage the joint ownership in accordance with the legal framework.

The law distinguishes three categories of legal acts according to their degree of importance. To each of these acts correspond different majority rules:

  1. The acts of conservation concern:

all the work necessary for the preservation of the property.

They can:

      • Be decided by a single co-owner
      • The co-owner can use the funds of the co-ownership in order to keep this property or advance the costs and recover them at the time of the partition.

In the event of a dispute, the co-owner may ask the court to oblige the other co-owners to share in the costs incurred.

2. Administrative acts designate:

  • Carrying out maintenance work;
  • The administration mandate entrusted to a third party;
  • The conclusion of residential leases;
  • The sale of furniture to settle the debts of joint ownership.
  • Before the law of January 1, 2007: acts of administration were subject to the unanimous vote of the co-owners.
  • After the law of January 1, 2007: it was agreed in order to avoid blocking situations, to relax the voting rule: henceforth, a 2/3 majority is sufficient to carry out such acts.

3. The acts of disposition concern:

  • The most serious acts because they impact the fate of the good.
  • Before the law of May 12, 2009: the acts of disposition required unanimity.
  • Since the law of May 12, 2009: the alienation of the undivided property is now possible at the request of one or more co-owners holding at least two-thirds of the shares of the joint property.

Summary table of the legal rules for the management of joint ownership

Nature of the acts What Who
Acts of conservation Acts to preserve the property. Decisions that can be taken by a single co-owner without the agreement of the others
Acts of administration Current management acts:

  • Sell furniture to pay joint debts
  • Conclude or renew residential or professional leases
  • Grant an administrative mandate
  • All co-owners must be aware.
  • The agreement of 2/3 of the shares is necessary in order to carry out these acts.
  • The 2/3 majority can be held by a single co-owner
Acts of disposition Most important acts:

  • Conclusion of commercial or rural leases
  • Sell of real estate
  • Unanimity

Declare a furnished property in case of an indivision

When buying an indivision, you must:

  • Get a SIRET number for joint ownership
  • Make a declaration on behalf of the joint ownership (property tax return)
  • Report the result of the liasse on each person’s personal tax form (2042)

The regime that applies is that of “régime réel”: the co-owners share the costs and revenues up to their percentage of possession of the property.

A married couple does not need to create an indivision, as they already declare their common income and expenses on a joint tax return (and thus income and expenses are already considered as income for both). In this case you need:

  • To have a SIRET number on one person’s name.
  • Make a single declaration every year (property tax return)
  • Report the result of their liasse on their joint personal tax form (2042)

French Tax Online is a tax consultancy firm specialized in foreigners investing and living in France.

A member of the Budiz Company Group, which is a French chartered accountant registered with the Order of French Chartered Accountants (OEC).

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