Too often, especially in inheritance cases, co-ownership arises between two or more persons. In many cases, however, co-ownership causes many inconveniences that co-owners wish to avoid. The way to do this is to partition the co-owned property. This partition can be judicial or voluntary, with the signing of a voluntary partition agreement always being the better option. This is because, through mutual concessions, the co-owners can agree in such a way that each of them is satisfied.
Essence of the agreement for voluntary partition
According to the Property Law, an agreement for voluntary partition may be concluded only in writing with notarized signatures. The form is for validity and applies to movable property worth over BGN 50, as well as to real estate. If the movable property to be divided is worth less than BGN 50, it is not necessary to comply with the written form with notarized signatures. Given the economic situation, however, this hypothesis is practically very rarely applicable.
Parties to an agreement for voluntary partition
Only the co-owners of the property to be partitioned can be parties to an agreement for voluntary partition. It is important to bear in mind that the participation of all co-owners is necessary in the voluntary partition. If any of them is not included, then the partition will be entirely null and void, i.e. it will not produce the desired legal consequences.
Subject of an agreement for voluntary partition
The subject of each agreement for voluntary partition may be property – movable, immovable or both. For example, X and Y have inherited a one-bedroom apartment worth BGN 100,000, a two-bedroom apartment worth BGN 200,000 and a car worth BGN 10,000. In this example, there are many options for action.
It is possible for the parties to agree that X will receive the one-bedroom apartment and the car, and Y – the two-bedroom apartment, paying X BGN 90,000 in equalization. An agreement is possible according to which X receives all the property, but will have to equalize Y’s share in money – BGN 300,000. In short, X and Y can agree in any way who gets which part of the property, with the co-owner who received a smaller share of the total property necessarily having the right to receive monetary equalization.
Legal possibilities of co-owners
Each co-owner may request that a voluntary partition of the common property be carried out, even if there is a contrary agreement. An exception to this rule is made when carrying out the partition is incompatible with the nature and purpose of the property.
Each co-owner may claim his share in kind, as far as this is possible. Inequality of shares is equalized with money. Properties that cannot be conveniently divided are put up for public sale.
N.B. When agricultural land is divided by an agreement for voluntary partition, the law does not allow the division of arable land into parts smaller than 3 decares, meadows into parts smaller than 2 decares and vineyards and orchards into parts smaller than 1 decare.
In the event that any property is omitted when concluding the agreement for voluntary partition, it shall be divided separately.
Challenging an agreement for voluntary partition
Although regulated in the Property Law and the Inheritance Law, the voluntary partition is still a contract. It is an agreement between two or more parties who, in order to liquidate their co-ownership, dispose of common property. Due to this characteristic, the Law on Obligations and Contracts (LOC) should be applied by analogy to unresolved issues.
The general grounds for nullity of contracts are contradiction or circumvention of the law and violation of good morals. Nullity exists in contracts where there is no consent or grounds, the subject matter is impossible, the form prescribed by law is not complied with or the contract is fictitious. In addition to the general grounds, the voluntary partition will be null and void if any of the co-partitioners has not participated in it.
The general grounds for voidability of contracts are lack of capacity or non-compliance with the requirements of legal representation. Contracts concluded in error, fraud, threat or extreme need are also voidable. Here, too, the law provides for a peculiarity with regard to the agreement for voluntary partition.
It cannot be challenged as concluded in error. An exception is made only if one of the co-owners is damaged by more than 1/4 of the value of his share. A difference compared to the general rules for challenging a contract concluded due to an error also exists with regard to the limitation period for challenging. According to Art. 32, para. 2 of the LOC
The right to seek annulment is extinguished by a three-year limitation period. The limitation period starts to run from the day the error was discovered.
With regard to the agreement for voluntary partition, the challenge may be made until the expiry of 1 year from the performance of the partition. Annulment is not allowed if, before the decision of the last court instance, the share of the injured party is supplemented in money or in kind by the remaining co-owners.
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More interesting topics related to the rights and obligations between relatives and the ways of settling property relations between them can be found in the section “Family and Inheritance Law”.
Law Firm “Petkova” provides specialized legal assistance when it is necessary to draw up an agreement for voluntary partition, as well as representation in proceedings for judicial partition.
Contact:
working hours: Monday to Friday from 10:00 to 18:00
address: Sofia, 2 Tri Ushi Str., fl. 3
tel. 0885 47 77 57
email: office@petkovalegal.com