The elements of Art. 495A of the Civil Code, and its effects on the right of co-ownership in the light of recent judgements

Abstract

It is obvious that people owning property have rights over their possessions, which rights include disposing and using one’s own property without any interference from third parties. Notwithstanding this, there might be a situation where different persons share the ownership rights over a particular property. This is the right of co-ownership which effectively emanates from the right of ownership itself. The difference between the two is that whilst ownership implies the property is fully owned by one person, co-ownership rights are shared between two or more people. This commonly results from inheritances where multiple people are instituted as heirs. When drafting the Civil Code, our legislator followed mostly the Italian Civil Code and sometimes even made reference to the French one. The Civil Code of Malta provides different guidelines as to how this property is to be managed by the different co-heirs. Amongst other duties, co-owners should be responsible for maintaining the property which forms part of the community property, indemnifying each co-owner for any expenses incurred for this reason and to agree on any alterations to that same property. Due to the ever-increasing properties being co-owned, and the difficulties for these properties to be sold, many properties have been left vacant for too many years. For this reason, the legislator had to find a solution and as a result, Article 495A was introduced back in 2004 and through this, the legislator introduced a possibility for co-owners to dispose of their property held in common. What this provision holds mainly is that whenever the majority of the co-owners enter into an agreement with a purchaser for the transfer of the property, then they can enforce the minority to sell as well, and as a result the property is sold in its entirety. For this to occur, certain requisites must be met, including the duration of the time for which the property has been held in common, whether there are or were any judicial proceedings instituted with the intention to divide the property, and most importantly that the minority is not prejudiced with this sale. Before this article was introduced, each co-owner was in a much steadier position as one could not force another co-owner to sell his undivided share. Today, it might be said that this is a double-edged sword as despite making life easier for co-owners who want to dispose of their property, their ownership rights have been to an extent weakened. For this reason, it is clear that the legislator’s primary intention was to eliminate as much as possible situations of co-ownership. This professional report focuses on the primary elements of this provision of law, and how it has effected the rights of co-ownership and the notarial profession. By dissecting the provision sub-article by sub-article, and by also making reference to the interpretations of the Maltese courts in the judgments, this professional report firstly highlights the intrinsic elements of this provision. By understanding these elements, one can concretely grasp the intentions of the legislator and understand the reasons for which this law had to be introduced. Subsequently, this professional report delves into the rights, limitations and obligations of co-ownership and how the introduction of this article has affected them. Later, the report also goes into the effects this article has on the notarial profession and how notaries have benefited from its introduction.