Co-Ownership Session 3-4

Co-owners' Payment Responsibilities

• Co-owners of shared property are responsible for contributing to expenses such as utilities, maintenance, repairs, security, insurance, and other services.
• The amount each co-owner owes is calculated based on their ownership percentage, which is determined by the size or value of their unit.
• Failure to meet financial responsibilities can lead to a shortfall in the syndicate’s budget, affecting the overall maintenance of the building and creating friction between co-owners.

Recovery Procedures

• When a co-owner defaults on their payment obligations, the syndicate can take several steps to recover outstanding amounts, ranging from informal to formal legal actions.

Amicable Process: Relays, Notices, etc.

• The first step involves sending reminder notices to the co-owner, outlining the amount due and the consequences of non-payment.
• The syndicate may negotiate a payment plan with the co-owner to offer flexibility in meeting their obligations.

Common Law Procedure: Injunctions and Legal Execution

• The syndicate can initiate legal actions under common law to recover unpaid amounts, which could include:
  • Injunctions: A court order compelling the co-owner to make payment.
  • Legal Execution: If an injunction is granted and not complied with, the court can authorize the execution of the judgment, which might involve garnishing wages, freezing bank accounts, or seizing assets.

Super Procedure: Detailed Principle and Practical Implementation

• A "Super Procedure" is a fast-track legal remedy available in some jurisdictions, designed to simplify and speed up the legal process for syndicates to recover debts.

Principle of the Super Procedure:

• It streamlines the court filing process and provides quicker judgments compared to standard legal proceedings.

Practical Implementation:

• The procedure may involve submitting detailed financial documentation to the court and a formal request for immediate action.
• The co-owner is given a limited window to respond, and if they do not, the court can issue a default judgment in favor of the syndicate

Legal Mortgage: Its Application and Importance in Securing Payments

• A legal mortgage is an effective tool for syndicates to secure the payment of common charges and other expenses from co-owners.

Application of a Legal Mortgage:

• A legal mortgage is placed on the property when the co-owner defaults on their payment obligations and refuses to comply after legal notices and other recovery procedures.
• The syndicate registers a mortgage against the unit of the defaulting co-owner, making it impossible for them to sell or refinance the property without settling the debt.

Importance of a Legal Mortgage:

• It guarantees that the syndicate will be paid, either when the co-owner settles the debt or when the property is sold.
• It gives the syndicate a priority claim over the proceeds from the sale, ensuring that unpaid fees or contributions are covered before any remaining funds are distributed to the co-owner or other creditors.

Roles of the Seller, Buyer, and Trustee in the Transfer Process

Role of the Seller

• The seller is responsible for:
  • Disclosing all relevant information about the property, including outstanding charges, repairs, or legal issues.
  • Providing necessary documents for the sale.
  • Settling outstanding co-ownership fees before the transfer is complete.
  • Officially handing over the property to the buyer once the sale is finalized.

Role of the Buyer

• The buyer is responsible for:
  • Performing inspections and reviewing all relevant legal documents to understand the property’s condition and the financial health of the co-ownership.
  • Verifying legal documents to ensure the property is free of any encumbrances.
  • Paying the agreed-upon purchase price and covering any legal or notarial fees associated with the transfer.
  • Notifying the syndicate of co-owners to update the official records of ownership.

Role of the Trustee

• The trustee oversees the legal aspects of the transfer, ensuring that both parties comply with their obligations.

Special Real Estate Privilege

• This is a legal mechanism that gives the syndicate a security interest over the property in the case of unpaid co-ownership fees.

Priority Claim:

• The syndicate has a priority claim over the property when it comes to unpaid fees, meaning they can claim these amounts from the proceeds of the sale before the seller can receive any money.

Automatic Registration:

• In some jurisdictions, this privilege is automatically registered on the property, informing the buyer of any unpaid fees and the syndicate's rights before the transaction is completed.

Effect on Buyers:

• Buyers must ensure that any unpaid fees have been settled by the seller before the transfer to avoid becoming responsible for these debts after the sale.

Relevant Legal Certificates

• These documents ensure that the transfer complies with local laws and protect both parties.

Certificate of Non-objection (Article 20):

• This certificate confirms that the seller has no outstanding debts related to the co-ownership and is often required before the transfer can be registered with local authorities.

Certificate of Transfer:

• This certificate confirms that the buyer is the new owner and must be provided to the syndicate to update their records.

Certificate of Compliance:

• This certificate confirms that the property is in compliance with local regulations and may be required by the buyer before finalizing the purchase.

Test your knowledge on the financial responsibilities of co-owners in shared property. This quiz covers expenses, assessment calculations, and recovery procedures for outstanding payments. Understand how co-ownership dynamics can impact maintenance and budgeting.