A joint property purchase allows several people to buy the same real estate property together, with each becoming the owner of a specific share expressed as a percentage. It’s a fairly common arrangement in real estate transactions: an unmarried couple buying their first apartment, siblings inheriting the family home, or friends investing in a rental property. Joint ownership is a simple way to buy property together without creating a separate legal structure.
What exactly is joint ownership from a legal standpoint?
Joint ownership is a shared ownership structure governed by Articles 815 and following of the French Civil Code. In practice, each co-owner holds an abstract share of the property (30%, 50%, 70%, etc.), but all are collectively owners of the entire property. You don’t own “the kitchen” or “the back bedroom”; you own a percentage of the whole.
This share is stated in the deed of ownership and determines your rights: the share of rental income, sale proceeds, and expenses. Many unmarried couples use this arrangement to buy their first home, and nearly all inheritances create joint ownership among heirs.
Relatively simple to set up, a joint property purchase only requires a clause in the notarial deed.
How does a joint property purchase work in practice?
Day to day, joint ownership follows strict rules designed to prevent disputes:
- For maintenance actions (e.g., roof repair), any co-owner can act alone.
- For administrative actions (e.g., signing a lease), a two-thirds majority is required.
- For major actions (e.g., selling or mortgaging), unanimity is mandatory.
Example: three friends buy an apartment for €900,000. Pierre contributes 50%, Marie 30%, and Paul 20%. If the apartment generates €3,000 in monthly rent, Pierre will receive €1,500, Marie €900, and Paul €600. But if the roof leaks and repairs cost €10,000, Pierre can pay for the work and demand reimbursement of each co-owner’s share.
What are the advantages and risks of joint ownership?
Joint ownership appeals for its simplicity. No company to form, no specific accounting, and notary fees identical to a standard purchase. For tax purposes, each person declares their share of income or capital gain.
However, beware of the main pitfall under Article 815 of the Civil Code, which states that no one can be forced to remain in joint ownership. Any co-owner can request a sale at any time. If your ex-partner demands their share or your sibling needs cash, the judge may order a public auction if no agreement is reached.
Another risk: a co-owner’s creditors can seize their share and trigger a forced sale. And daily management can become difficult if relationships deteriorate.
How to secure a joint property purchase?
To prevent issues, it’s advisable to sign a joint ownership agreement before a notary. This contract defines how the property is managed: duration (maximum five years), expense sharing, and preemption rights between co-owners. Cost: between €500 and €1,500 depending on complexity.
Before the purchase agreement, consider including a preferential allocation clause — essential for protecting the surviving partner.
Also consider a cross life and disability insurance policy, so that in the event of a death, the loan is repaid, avoiding a forced sale.
What’s the difference between joint ownership and an SCI?
Joint ownership is suitable for simple, short-term projects. Beyond five years, it’s better to buy through an SCI. An SCI costs more (€1,500 to €3,000), requires bookkeeping, but offers unparalleled stability: no partner can force a sale.
For high-end real estate, an SCI is often the preferred structure. A family château or a private mansion passed down through generations deserves a lasting legal framework.
Joint ownership remains more appropriate for a young couple’s apartment or a holiday home shared by siblings.
How does joint ownership with usufruct work?
A joint purchase with usufruct combines two mechanisms. Typical case: parents buy property with their children but retain the usufruct. They live in or rent out the property (usufruct), while the children hold the asset’s value (bare ownership).
Example: following a succession, the widow inherits the usufruct, and her three children inherit the bare ownership jointly. She can live in the property until her death, when the children gain full ownership. To value a property during an inheritance, the notary applies the tax scale: at age 70, usufruct is valued at 30%, and bare ownership at 70%.
Is joint ownership the best choice for buying property?
Joint ownership is suitable in three situations: an unmarried couple buying a primary residence, close relatives investing in a rental property for three to five years, or a temporary post-inheritance arrangement. It’s best avoided for groups larger than three people, those with prior conflicts, or complex projects involving major renovations.
To secure your joint real estate acquisition in the luxury market, Consultants Immobilier and its network of 17 agencies advise you on the optimal legal structure and connect you with the best notaries specialized in wealth management.