In our country, the ownership of some properties is shared among several individuals. This situation often arises from inherited properties, which can be under joint ownership or fractional ownership. In both joint and fractional ownership, co-owners do not have the liberty to dispose of the shared properties as they wish. This unity requires a consensus on the use and benefit of the property, which is not always possible to achieve. The lawsuit for the termination of joint ownership, as discussed in this article, involves dividing joint or fractional ownership into individual ownership or selling the property and dividing its proceeds.
Joint Ownership : This is a situation of collectively owning properties as a community according to contracts formed by legal regulations. In joint ownership, there is no divided and specified share on the property; instead, all owners jointly own the entirety of the property. The most common scenario for joint ownership is when an individual passes away, and the heirs become owners of the inherited property. When there are multiple heirs, a partnership covering all rights and debts in the estate is formed among the heirs until the inheritance is divided. Heirs own the estate jointly, and unless otherwise specified by contract or law, they jointly dispose of all rights related to the estate. Joint ownership ends with the transfer of the property, dissolution of the community, or transition to fractional ownership.
Fractional Ownership : In fractional ownership, each owner uses their property rights in proportion to their share and has independent authority to dispose of their abstract share. In fractional ownership, several individuals own the entire undivided property in specified shares, which are considered equal unless otherwise stated. Each co-owner has the rights and obligations of ownership concerning their share. Shares can be transferred, pledged, and seized by creditors. In the case of an inheritance, the property of the deceased can be transferred as fractional ownership if all co-owners agree.
Methods of Partition in the Termination of Joint Ownership Lawsuit
Partitioning is carried out either by physically dividing the property or by selling it through negotiation or auction and then dividing the proceeds. If the co-owners cannot agree on a method of partition, upon the request of one of the co-owners, the judge will order the property to be physically divided and shared. If the divided parts do not have equal value, compensation will be made by adding money to the part of lesser value to equalize them. If partitioning by division is not suitable due to circumstances and conditions, and especially if there is no possibility of dividing the shared property without causing significant loss in value, the property will be ordered to be sold in an auction. The decision to sell the shares among co-owners through auction depends on the consent of all co-owners.
Termination of Joint Ownership by Physical Division
It refers to the physical division of movable or immovable property. This method requires a divisible asset. While money is easily divisible, some properties are not suitable for physical division. In cases where physical division is not possible or would result in significant loss of value, the property will instead be divided by sale through enforcement procedures. If the co-owners cannot agree on a method of partition, the judge will first investigate whether physical division is possible and, if so, will order the property to be divided accordingly. In cases where physical division is possible, the property will be divided into equivalent parts. If there is a value difference between the divided parts, compensation may be requested. Thus, physical division can be sought in the lawsuit for the termination of joint ownership, and if the judge concludes that physical division is possible, they can rule for termination of joint ownership through this method. However, it should be noted that the majority of termination of joint ownership lawsuits are resolved by selling the property. This is often due to pragmatic reasons, such as the parties wanting to avoid further legal disputes like right-of-way lawsuits. Additionally, especially in the division of agricultural lands, the indivisible parcel sizes are considered. In this context, the Soil Protection and Land Use Law No. 5403 and related administrative decisions regarding agricultural lands are taken into account by the court handling the lawsuit for the termination of joint ownership. These are some of the obstacles to physical division. Therefore, during the litigation, numerous legal reasons can be presented as to why physical division is not possible.
Termination of Joint Ownership through Sale
If partitioning by division is not suitable due to circumstances and conditions, especially if there is no possibility of dividing the shared property without causing significant loss in value, the property will be ordered to be sold in an auction. The decision to sell the shares among co-owners through auction depends on the consent of all co-owners. If there is no agreement among the co-owners for such a procedure, or if even a single co-owner does not consent to the auction among the co-owners, the sale will be conducted publicly through negotiation or open auction, typically through an auction method. The proceeds from the sale will be distributed among the co-owners in proportion to their shares. The court's judgment should specify how the sale proceeds are to be divided in terms of proportions and amounts. When the court decides on the sale, an officer should be appointed to conduct the sale.
To initiate this lawsuit, one first needs an inheritance certificate obtained from a civil court of peace or a notary. The division is carried out in accordance with the inheritance shares stated in the inheritance certificate. The inheritance certificate is a document that indicates who the heirs are and the share of inheritance each heir is entitled to.
Parties in the Lawsuit for Termination of Joint Ownership
The parties to a lawsuit for the termination of joint ownership include everyone with ownership rights over the movable or immovable property. Anyone who has ownership rights over the property can initiate this lawsuit. The lawsuit is filed against all co-owners except the person initiating it. If one of the co-owners dies after the lawsuit has been initiated, a request should be made to the court for authorization and time to produce an inheritance certificate on behalf of the deceased co-owner, and all heirs mentioned in the inheritance certificate of the deceased co-owner should be included in the lawsuit. One of the most common problems in lawsuits for the termination of joint ownership is the necessity of serving proper notice to each individual due to the multiplicity of parties, which significantly slows down the process.
Competent and Jurisdictional Court in the Lawsuit for Termination of Joint Ownership
In Turkey, the Civil Procedure Law explicitly states that Civil Courts of Peace are competent for lawsuits related to the partitioning and termination of joint ownership of movable and immovable property or rights.
The competent court for a lawsuit for the termination of joint ownership is the court of the location where the immovable property is situated if the subject of the lawsuit is an immovable property. If the lawsuit concerns multiple immovable properties, the lawsuit can be initiated in the court of the location where any one of those properties is situated. If the subject of the lawsuit is a movable property, the competent court is determined according to the general jurisdiction rules set out in the law.
Mediation Requirement in the Termination of Joint Ownership Lawsuit
As of September 1, 2023, it is mandatory to apply for mediation before filing a lawsuit for the termination of joint ownership. If a lawsuit is filed without applying to a mediator, it will be rejected due to the lack of a prerequisite condition.
Determination of Sale Value, Valuation, and Objection in the Termination of Joint Ownership Lawsuit
In lawsuits for the termination of joint ownership, a valuation must be conducted for the property or rights in question. This is determined with the help of evidence such as inspections, expert reports, and expert opinion reports. For example, for immovable property, an inspection is conducted on-site with an expert committee to collect necessary information for value determination. After this information is gathered, the committee prepares a report within a specific time frame to calculate the sale value of the property. Parties to the lawsuit can object to these reports. Based on the objections, the judge has the authority to order an additional report or a new expert report. Even if the sale value is determined during the lawsuit, after deciding on the sale, the court appoints a sales officer to conduct the sale, who must independently reassess the value. This valuation is notified to the parties, who can object if they find the valuation unacceptable. The starting bid in the auction is half of the final valuation determined in this process.
Court Fees and Costs in the Termination of Joint Ownership Lawsuit
The lawsuit for the termination of joint ownership involves bilateral and similar outcomes for the parties. As each co-owner gains in proportion to their share, there is no distinct winner or loser in this lawsuit. Thus, litigation expenses and attorney fees are charged to the parties in proportion to their shares. If the property to be sold is subject to fractional ownership, the sales price and fees are charged to the co-owners in proportion to their shares registered in the title deed. However, if the property is subject to joint ownership, the distribution of the sales price and fees will be decided based on the shares indicated in the inheritance certificate. If both fractional and joint ownership exist in the same property, both shares noted in the title deed and the inheritance certificate are considered.
The cost of notifications will increase with the number of co-owners involved in the lawsuit for the termination of joint ownership, particularly when co-owners reside abroad, as notification procedures can be complex and expensive. Notifications to non-Turkish nationals are translated into the language of the country of citizenship through an expert and served accordingly. Like any lawsuit, notifications to defendants abroad in the termination of joint ownership lawsuit can delay and slow down the litigation process. If one of the co-owners cannot be reached, public notification will be necessary, making the lawsuit significantly more costly and prolonging the process.
Initiation of the Lawsuit for the Termination of Joint Ownership by a Creditor of One of the Co-owners
The creditors of a co-owner with joint ownership rights in a property can, based on the execution file at the enforcement office, obtain authorization from the Execution Court to request the transformation of joint ownership into fractional ownership. If it becomes necessary to sell properties like an undivided inheritance, a share in a company or partnership, or property subject to a usufruct right, the enforcement officer will inquire from the Execution Court how the sale should be conducted. The Execution Court may invite concerned parties whose addresses are known, listen to those who attend, and then either conduct an auction or appoint an officer for the sale or take any other necessary measures.
If the ownership is not joint but fractional, it is possible to sell the share of the debtor that has been seized through enforcement. Therefore, in this case, the creditor is not given the authority to initiate a lawsuit for the termination of joint ownership. Additionally, following the compulsory sale of this share through enforcement, the other co-owners do not have a right of pre-emption. Consequently, giving a creditor the authority to initiate a lawsuit for the termination of joint ownership is possible in cases of joint ownership.
In cases of fractional ownership, when a share of the property owned by one of the individuals is seized, the enforcement office notifies the other owners of the action. It is also warned that all yields belonging to the share of the person whose share has been seized must be deposited with the enforcement treasury. Otherwise, if the other co-owners provide these yields to the co-owner whose share has been seized, they will have to make additional payments to the enforcement department.
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