The regime of undivided co-ownership under the Civil Code of Québec (the “CCQ”)1 has given rise to several legitimate questions in cases involving partition and the end of indivision, and to extensive case law. This article provides a brief overview of the issues inherent in this type of property ownership.
The right to compel partition and the end of indivision
Article 1030 CCQ lays down the principle that “No one is bound to remain in indivision”, which flows from the right of every co-owner to put an end to undivided co-ownership. This provision, which is of public order, is aimed at protecting co-owners no longer wishing to remain in a situation of indivision, by giving them the possibility of acquiring the exclusive right to dispose of their property as they see fit2. A co-owner may request partition and the end of indivision without having to provide any justifying grounds3. It should be noted that Article 1030 applies to all cases of indivision, namely successoral (liquidation of an estate), conjugal and contractual4.
The author Pierre-Claude Lafond, in a treatise on undivided co-ownership, states that [TRANSLATION]: “The right to partition acts as a sword of Damocles over the heads of the undivided co-owners, with the potential to smite them at any time and put an end to the undivided co-ownership”5. While a state of indivision may last for a lengthy period, it is important to be aware that this type of ownership can end at any time, for a variety of reasons that can be more or less foreseeable6.
In a situation of undivided co-ownership, each of the co-owners has a share representing its undivided portion of the co-owned property7. Partition is a right that [TRANSLATION] “compels the co-owner(s) subject to it to divide the co-owned property or buy out the co-owner who requested its partition”8. The other co-owners cannot escape this compulsion unless they [TRANSLATION] “transfer their interest in the property or abandon their right to it”9.
When partition is demanded by a co-owner, the apportionment of that owner’s share is generally done in kind, and [TRANSLATION] “each of the co-owners will receive a share of the property equivalent to the value of his or her share”10. For example, a duplex separated by a common wall and having two civic addresses can easily be divided into two separate properties. However, where partition in kind is not possible, payment of an equalizing sum may be made.11 A co-owner can also insist that the property be sold if it cannot be suitably shared among the co-owners12.
The abovementioned principle that “No one is bound to remain in indivision” can also apply through the occurrence of an event other than partition specifically requested by a co-owner, such as the alienation, loss or expropriation of a major part of the undivided property, or the establishment of divided co-ownership13.
If certain circumstances, such as a depressed real estate market, warrant it, the court may postpone partition of the property14.
The mechanisms for partition and the end of indivision
Two distinct situations generally arise when partition occurs. On the one hand, when the co-owners reach an agreement on putting an end to indivision, partition is carried out according to the terms agreed upon by the parties15. On the other hand, where there is a disagreement on the composition of the shares to be allotted, the partition will be determined by a court-appointed expert; however, if the disagreement is over how the shares are to be allotted, the allotment will be determined by a drawing of lots16.
When the co-owners do not agree on how the undivided property is to be partitioned, the co-owner(s) who wish to put an end to the indivision may petition the court to decide the issue by filing an originating application17. The court may then order partition in kind, if the property can be divided, or the sale of the undivided property18. Such an action in partition can only be instituted against those who have that same right of action themselves19 and it must be instituted against all such co-owners20.
Three quarters of the co-owners representing 90% of the shares of the undivided co-ownership of a mainly residential immovable may terminate the indivision in order to establish divided co-ownership of it. The co-owners may satisfy those who object to the establishment of divided co-ownership by apportioning their share to them in money21.
The possibility of postponing partition
The right to demand partition may be exercised at any time, unless partition is postponed by an agreement, a testamentary provision, a judgment or by operation of law, or has become impossible because the property has been appropriated to a lasting purpose22. In the latter case, the courts have found, for example, that a water supply system, a telecommunications system, and a road providing access to a public thoroughfare constitute property appropriated to a lasting purpose23.
The possibility of postponing partition
In family matters, postponement of partition may be ordered by the court where use of the family residence is awarded to one of the parties24. In testamentary matters, it is also possible for the testator to provide that the vesting of each heir’s right to the share of an immovable that is sold be postponed until the person has reached a certain age25.
In conclusion, undivided co-ownership is a type of property right that is deeply rooted in Quebec society. Everyone who owns or acquires a share in a co-owned immovable should be well aware of the effects and consequences of this type of ownership, in order not to be taken by surprise in the event that partition is requested.
This article first appeared in French in the Autumn 2019 edition of the Copropriété Plus magazine.