What does it consist of?
First, it is important to understand what a community or condominium is. This occurs when a good or right is shared among several people.
Additionally, property shares are assigned to each of them. If the shared good is a property, it is called co-ownership or condominium, although people often use all three terms as synonyms.
Once we have a clear understanding of what a community is, let's talk about the extinction or dissolution of a condominium. Essentially, it is when the situation in which multiple people share ownership of a property comes to an end.
Sometimes, you might hear other words like "proindiviso," co-ownership, or community of goods, but they all refer to the same thing.
Types of Condominium Extinction
Extinction of condominium by mutual agreement
When everyone agrees, canceling the condominium is a piece of cake: one person can buy the others' shares, or the person who wants to leave can receive compensation. The property can also be sold and the proceeds divided among the owners according to what corresponds to each.
However, before doing this, the owners must appraise the property and agree on how to do it. Then, they can go to a notary and make a deed to formalize everything, paying the necessary taxes. If the property is the house of a couple getting divorced, the agreement must also be included in the regulatory agreement, and if approved by the court, that agreement and the ruling will become the deed for the cancellation of the condominium.
Extinction of condominium by judicial means
If there is no agreement, the only option is to go to court and file a lawsuit to divide the property. The court will decide whether each person receives their share or if the property is sold and the proceeds are divided. There is no specific procedure in the law for this, but generally, a public auction is held to sell the property.
Required Documentation
Property titles of the goods subject to the dissolution of the community.
National Identity Document (DNI) of the co-owners. If a company is involved, the powers of attorney or appointment of current administrators are required.
For urban properties, a certificate from the homeowners' association confirming that all community expenses have been paid.
Cadastral references of the properties (latest IBI receipt).
Whether they are rented or not.
Value assigned to each property.
How the properties are assigned to the co-owners.
How the transaction costs are paid: Notary fees, municipal capital gains tax (if it concerns urban properties).
In what situations can this service be used?
The causes for the extinction of a condominium are established in the Civil Code in Articles 395 to 406.
It is also important to consider the Civil Procedure Law in the event that the division of goods needs to be carried out through a judicial auction.
The causes for the extinction of a condominium are generally the same as 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:
Renunciation of rights by 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 goods. It is a judicial process, and the initiation of the division of a common good declares the extinction of the condominium. The result can be a material division, forming a horizontal property, or an economic one if the property is indivisible. In this case, one of the owners retains ownership, and the others receive compensation according to their shares. It may also result in a division by auction if there is no agreement between the parties.
The most common cause of condominium extinction is the owners' desire to no longer be part of the community. However, as we have seen, this is not the only one.