In Mallorca, as across Spain, one form of ownership can raise questions for buyers and sellers: the undivided share. Several people own an interest in the whole property, without any one owner having title to a particular physical part of it. Here we look at what that means, the difficulties it can raise and the options open to co-owners.
What is an undivided share?
An undivided share exists when a property has several owners but has not been physically divided between them. Their rights extend to the whole property rather than to a particular room or section. For example, if two people buy a house in equal shares, each owns 50% of the whole. Neither can claim the bedroom as their own and assign the sitting room to the other. Both have the same share in each part of the house.
In Mallorca this often arises when several heirs inherit a property without dividing it, or when business partners or members of a family buy a property together.
The difficulties of owning an undivided share
Co-ownership can make both the management and the sale of a property more complicated. Common difficulties include:
- Selling a share. An owner can sell their percentage interest, but cannot separately sell a physical part of the property. A buyer would acquire a share of the whole. That limits the pool of interested investors, as relatively few want to buy without being able to use a defined part of the property as their own.
- Disagreements between co-owners. Important decisions, such as alterations or a sale of the whole property, can call for agreement between all the owners. If one objects, it may become very difficult to proceed and a dispute can continue for a long time.
- Sharing the costs. The owners have to divide maintenance bills, taxes and other property expenses between them. Problems can arise if someone cannot afford to contribute or is unwilling to do so.
Ways to manage undivided ownership
- Ending co-ownership (extinción de condominio)
If the owners want to end the arrangement, this is the most direct option. Where possible, they can divide the property physically. Alternatively, one owner can buy the other’s share and become the sole owner. In Mallorca, cases that reach the courts can take time, but ending co-ownership is one practical way to resolve a dispute or enable a sale. - Selling together
All the co-owners can agree to sell the property as a whole. This usually makes the home easier to market, since buyers generally prefer to own the whole property. In Mallorca’s active market, particularly in areas of strong demand, a well-managed joint sale may produce a good return. - Agreeing how the property will be used
Co-owners may agree rules for using and enjoying the property without dividing or selling it. For example, owners of a holiday home or second home in Mallorca could draw up a calendar allocating time at the property to each of them. - A court auction
If the owners cannot agree, one of them may ask the court for an auction. The proceeds of a sale by auction are divided according to each owner’s share. An auction may be a less attractive option because the price achieved is often below market value. - Selling the undivided share separately
If the co-owners cannot reach agreement, an owner may consider selling their share. To assess an offer, look at the property, the size of the share and the arrangements for using the home. The price of the share is negotiated for each sale.
Undivided shares arising from an inheritance
Inheritance is one of the most common reasons for undivided ownership. In Mallorca, many properties have passed down through generations and several heirs often inherit the same home. They may disagree about what to do with it. Selling an inherited share can be complicated when the heirs have different views about the terms.
A Mallorca-based specialist in property or inheritance law can guide the heirs through their options, help them reach an agreement and avoid letting the matter drag on unnecessarily.
How undivided ownership affects Mallorca’s property market
Undivided shares affect the Palma property market too. They tend to take longer to sell because of their complexity. Many buyers prefer to avoid the potential for disputes and the practical difficulties involved. That can depress the value of a jointly held property compared with one in sole ownership.
Some investors see an opportunity in undivided shares. Because complexity can make shares available at lower prices, these buyers may acquire a share with a view to negotiating later with the other owners and acquiring 100% of the property.
What to consider as a co-owner
Undivided ownership is common in Mallorca, particularly after an inheritance or a joint purchase. It can complicate the management and sale of a home. Understanding the available legal options, including ending co-ownership or selling together, can help owners avoid disputes and get the most from the property. Advice from a lawyer and an estate agent can help you manage the situation effectively and understand the financial outcome.
At Inmogestión Balear, we specialise in dealing with undivided property shares, helping clients resolve disagreements and find solutions that work for all the owners. If you co-own a property or are considering selling an undivided share, get in touch for professional advice.
If co-ownership arose from an inheritance or you need to clarify ownership, see Selling an inherited property in Palma de Mallorca and Nota simple: what it contains and how to request one.
