Owning real estate with other people leads to conflict above all over financing repairs. This article examines why a majority owner cannot arbitrarily bypass the minority and what legal risks they face for doing so. You will learn the difference between a necessary repair and a luxury investment from the perspective of cost recovery and limitation periods. You will also find out how to properly assert your past investments in court when co-ownership is dissolved and settled. Finally, the author offers practical guidance on how to secure evidence in advance and protect your money.
Owning real estate together with someone else – whether siblings or individuals who jointly bought or inherited a flat, cottage, or family house – brings not only advantages but also plenty of friction. The most common source is money. What happens if the roof leaks, one of the co-owners replaces it completely at their own expense, and the others refuse to contribute?
Court practice is clear on these questions. When and how much you can claim back from the other co-owners depends on two key factors: whether they consented to the investment and whether the repair was necessary.
In practical terms, we must first determine whether a repair or investment constitutes management of the common thing (maintenance, repairs) or an important change to the common thing (a fundamental conversion leading to a change in the purpose of use). For management of the common thing, the majority calculated by the size of shares decides, and a minority co-owner must comply with the majority decision and cannot ask a court to order different management of the common thing. The situation is different for an important change to the common thing, where outvoted co-owners may ask the court to decide on the important change, regardless of whether a majority was reached or not.
Many people labour under the misconception that if they own the majority of a property (for example 70% or even 95%), they can decide on repairs and investments entirely on their own and merely announce the result of their decision to the minority co-owner as a done deal. Court practice says a resounding NO.
According to the Supreme Court of the Slovak Republic (file no. 3 Cdo 162/2004), a strict rule applies: The process of deciding on the common thing must take place jointly. The majority's view cannot be born in the decision of one person without the other ever getting a chance to comment.
If the co-owners agree on a necessary investment – and the consent may also be given orally, or by the others seeing that the building is being repaired or altered and raising no objection (so-called implied consent) – a joint obligation of all of them arises (§ 511(3) of the Slovak Civil Code).
What if an emergency looms – the roof is leaking or the walls of the house are damp – but the other co-owners do not pick up the phone or refuse to comment on the repair? If it is a necessary repair or maintenance without which the property would suffer damage, you may act on your own.
In this case, the courts protect the investing co-owner through the institution of unjust enrichment:
An entirely different situation arises where the investment was not necessary. For example, if you decide to build a luxury swimming pool at the common house or replace a functional façade with a more modern one, without the consent of the other co-owners.
In this case, court practice is much more considerate towards the non-investing co-owners, so that they are not forced to pay for luxury they did not want:
If you apply to the court for the dissolution and settlement of fractional co-ownership, you can claim your past investments within the so-called settlement in the broader sense.
Strict procedural rules apply here, however:
Do you want to resolve a dispute with your co-owners safely and protect your investments?
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