In Switzerland, selling a property becomes more complex when multiple parties are involved. Whether the property was inherited, purchased jointly, or part of a marital estate, the type of shared ownership plays a critical role in determining what can be sold, by whom, and under what conditions.
This article explores the different legal structures of shared property ownership in Switzerland and outlines what homeowners need to understand when they wish to sell a jointly owned property.
Example cases of selling shared ownership property
Selling a shared ownership property as a married couple
When spouses own a property jointly—either under a community of property regime or as co-owners—both parties must agree to sell. The type of ownership determines how the sale proceeds are divided.
Selling a share in an investment property
Two or more individuals may purchase a property as an investment. In a co-ownership structure, each investor owns a defined share and can sell it independently. Because investment properties are rarely owner-occupied, the sale of a share poses no particular challenges.
Selling inherited property among heirs
Heirs who inherit a property together form a joint ownership group by law. No single heir can sell the property without the unanimous consent of all others. Disagreements can delay or block a sale unless resolved through legal partition or court proceedings.
Selling after divorce or separation
If a divorced couple still own a shared ownership property, they must clarify their rights based on the divorce agreement and the form of ownership. The process can be legally and emotionally complex, particularly if one party wishes to retain the property.
Types of shared ownership in Switzerland
Swiss law recognizes three primary forms of shared ownership, each governed by distinct principles and legal frameworks: joint ownership (Gesamteigentum), co-ownership (Miteigentum), and condominium ownership (Stockwerkeigentum), with the latter technically being a form of co-ownership. Understanding which of these structures applies is crucial before taking any steps toward a sale.
Joint Ownership
Joint ownership is the most restrictive form of shared ownership property. It arises not simply from property ownership, but from an external legal relationship among the owners. This form is typically used in cases where the relationship between the parties requires unity and indivisibility in decision-making.
Key Characteristics:
- There are no individual shares; all decisions must be made jointly.
- Legal basis stems from an external relationship, not from the property itself.
Common Scenarios:
- Inheritance: When multiple heirs inherit a property, they form a legal community that jointly owns the estate. Ownership shares only come into existence when the community of heirs is dissolved.
- Marriage under Community of Property (Gütergemeinschaft): If spouses have opted for this marital regime, most property acquired during the marriage is held jointly, even if only one spouse contributed to the purchase. This can even include property owned before the marriage unless explicitly excluded.
Selling Implications:
Under joint ownership, no single party holds a defined share of the property. Instead, the ownership is collective and undivided. This means:
- The owners are considered a single legal entity.
- The unanimous consent of all joint owners is required for any decision related to the sale.
- If even one party objects, the sale cannot proceed.
- In case of disagreement, the only recourse may be to petition a court to initiate a division of the property, which could ultimately lead to a forced sale or public auction—often a less favorable outcome for all involved, since there is a high risk of selling below market value.
Co-ownership
In contrast to joint ownership, co-ownership is more flexible and is commonly used when two or more people purchase a property together. Each owner has a defined share in the property, usually expressed as a percentage and registered in the land registry.
Key Characteristics:
- Each co-owner has a clearly defined share (e.g., 50% each), recorded in the land register.
- Each share can, in principle, be sold independently.
- If sold together, the sales proceeds are divided according to ownership shares as recorded in the land registry.
Typical use cases:
- Friends or partners jointly buying a holiday home or investment property.
- An individual selling a part of their property to another person.
- Heirs converting a joint inheritance into co-ownership shares through legal partitioning.
Selling Implications:
Legally, co-owners are entitled to sell their individual shares without needing consent from the others. However, several practical issues arise:
- The market for fractional property shares is extremely limited, especially for residential homes. Few buyers are willing to purchase a portion of a house without full control or access. This is of course less of a problem for jointly owned investment properties.
- Other co-owners usually have a right of first refusal (Vorkaufsrecht). This means that before the seller can finalize a deal with an external party, the existing co-owners must be given the chance to purchase the share under the same terms.
While co-ownership allows for more autonomy, any attempt to sell a share without coordination can strain relationships and may even trigger legal conflicts, particularly if one party wants out and others cannot or do not want to buy them out.
Condominium Ownership
Condominium ownership under Swiss law is a specific and well-defined form of co-ownership used in multi-unit buildings. Each owner holds exclusive rights to a private unit (such as their apartment) and a proportionate share in the property as a whole (land, common areas).
Key Characteristics:
- The private unit and the share in common property are both registered in the land registry.
An owners' association (Stockwerkeigentümergemeinschaft) governs rules regarding maintenance, renovations, and shared expenses.
Selling a Condominium:
Of the three ownership types, selling a condominium is the most straightforward:
- The owner may sell their unit at will, much like a standalone property.
- Buyers automatically assume the same rights and obligations, including membership in the condominium association and their share of the property as a whole.
- While internal rules (e.g., needing to inform the association) may apply, these rarely obstruct the sale process.
Still, potential buyers may be interested in reviewing the association's bylaws, financial statements, and planned renovations, which can influence the attractiveness of the unit.
Things to Know When Selling a Shared Ownership Property
Selling Under Joint Ownership
- You need unanimous agreement from all owners.
- If consensus is not reached, no sale can proceed.
- In some cases (e.g., unresolved disputes), the only legal solution is to go to court and request a division or forced sale.
Selling a Co-ownership Share
- Legally possible to sell your individual share.
- In practice, however, finding a buyer willing to purchase a fractional share of a residential property can be extremely difficult.
- Co-owners have a right of first refusal, which means they can match any third-party offer.
Selling a Condominium Unit
- Straightforward sale process similar to selling a privately owned property.
Buyers acquire exclusive rights to the unit and percentage ownership in the property as a whole.
Legal and Practical Considerations for Sellers
Resolving Disputes and Blockages
When multiple owners are involved, consensus is the most desirable path to a smooth sale. However, where disagreements arise:
- Owners may consider mediation to reach a resolution without litigation.
- In more serious cases, the matter can escalate to court proceedings, where a judge may order the division or sale of the property.
Valuation and Marketability
- Selling a share of a residential home is virtually impossible due to lack of control and usability for the buyer.
- Selling a share in a shared ownership investment property is straightforward.
Tax and Notarial Procedures
All real estate transactions in Switzerland involve notaries and may trigger taxes:
- Property gains tax (tax rate depending on canton and holding period).
- Property transfer tax in some cantons, though this may be waived in some intra-family or inheritance-based cases.
- Any sale must be executed before a notary public, who will update the land registry accordingly.
Conclusion
Selling a shared ownership property in Switzerland requires a clear understanding of the type of ownership involved. Legal advice is strongly recommended, especially in situations involving multiple owners or potential disputes.
