What is a Shared Title Deed?
Shared title deed is issued if a real estate has more than one partner. In the share title deeds, the number of partners of the real estate in question and the names of the partners are clearly stated in the title deed. Due to the fact that it has a different legal regulation than standard title deeds, different situations may arise in the purchase and sale transactions of shared title deeds. In this context, questions such as how to sell the shared title deed, how to divide the share title, what kind of risks exist in the shared title deed, or is it possible to sell unannounced in the shared title are frequently encountered. You will find answers to these questions and much more in our article.
First of all, let us state that there are two different types of ownership in shared title deeds. There is no set share rate for the partners of the real estate in joint ownership. In shared ownership, the proportions owned by the partners of the real estate are stated on the title deed. However, there is no information such as which partner owns which part of the real estate.
Certificate of Consent and Emancipation
One of the most curious and researched subjects about the share title deeds is the certificate of consent and emancipation. If the partners of the share deed sign a contract among themselves regarding which part of the real estate belongs to which partner, the equivalent of this contract in the legal processes is the consent distribution document. However, this document does not make any changes in the official processes related to the title deed.
When any of the partners of the share deed wants the relevant real estate to be sold, they can do so by filing a lawsuit. During this litigation process, the court notifies all partners of this situation; Then, the value of the real estate is determined and the amount of payment for each partner is calculated.
One of the most important issues to be aware of in the emancipation case is that it is not necessary to obtain consent from each of the shareholder title deed partners in order to file this lawsuit. Any of the title deed partners can sue for the sale of the real estate without asking the other partners and open up a sales request.
Management of Shared Title Deeds
In shared title deeds, partners can make various decisions and set rules regarding the use and management of the relevant real estate; they can also be registered in the land registry. In the absence of clearly outlined rules regarding the management of the real estate, some possibilities may arise. We can list these as follows:
- Depending on the type of real estate in question, one or more of the partners may carry out the operations such as maintenance, repair, tax payments, etc., and claim the resulting expenses from the other partners. The procedures for the equal distribution of costs in such works are determined according to equity and certain regional rules. When necessary, voting can be made and decisions can be taken by majority vote.
- On the other hand, a different approach is followed in important management transactions such as leasing, terminating the lease agreement, or making changes in the operating principles if it is a commercial enterprise. In such cases, the decision of the majority of the partners in terms of person and share is taken as basis.
- In some cases, the obligation of unanimity, not a majority, is sought among the partners. In important cases such as changing the purpose of use of the relevant real estate, realization of zoning studies or the emergence of a mortgage situation, the unanimous vote of all shareholders is required.
- Apart from such transactions, each partner of the share deed can use the relevant real estate without harming the rights of other shareholders. In case of any dispute regarding this use, the partners have the right to apply to the court.
- If any of the common title deed partners do not fulfill their duties in terms of title deed management (for example, not paying property tax, not participating in common expenses, etc.), this shareholder can be expelled from the partnership with the majority of votes of the other shareholders. Likewise, if a shareholder rents out or makes use of the relevant real estate to others without the consent of the other partners, the other shareholders have the right to exclude them from the partnership by majority vote.
Risks of Owning a Property With a Shared Title Deed
Shared title deeds are sometimes issued as a result of necessity and sometimes as a result of the special request of the partners. In this type of deed, there may be some risks that the partners should pay attention to. Below, we can list the most common problems and the risks that shareholder title holders face:
- Even if the shareholding of each partner in the real estate is written in the share title deeds, there is no information about which part of the real estate is given to which partner. For example, if a shared title deed is issued for an entire apartment, there is uncertainty about which flat on which floor is given to which of the share title partners. In this case, resolving the resulting dispute means a waste of both time and money for the partners.
- Even if the share title deeds are issued at the request of the partners or due to a legal obligation, a trust problem will arise between the partners in any case. Even if this problem is not in the first place, it may manifest itself in the future, in cases such as changing the management of the real estate, selling it, etc.
- In case of death of any of the common title deed partners, the number of partners increases. The legal heirs of the deceased person are also entitled to the real estate. This makes the management of the real estate much more difficult and makes it difficult to manage and, if necessary, sell the real estate.
- One or more of the partners has the right to sell their shares to others as they wish. Although the other partners have the chance to buy back the shares owned by the partner who wants to sell by paying the sale price, this situation makes the sale of the real estate difficult and may cause the sale to be released for a much lower price, than would have otherwise been sold for.
- The fact that the partners have the legal right to file a lawsuit for litigation is often a problem for the shared title deed. Because if one of the partners demands the sale of the real estate, the sale may be realized for a much lower amount than its value. In this case, there is a possibility that the partners of the share title deed will suffer huge losses.
What Should Be Considered When Buying a Property With Shared Title Deeds?
Shared title deeds are a type of title that should always be approached cautiously, due to the fact that there are some uncertainties and the frequent disagreement between the partners. It is very important for people who want to buy a real estate with shared deeds pay attention to some issues that may arise in the process. Otherwise, grievances that are difficult to reverse may arise.
Here, we have made a list of the main points that the buyers should pay attention to in the purchase of share title deed:
- The part to be purchased must be a share of the whole property, not a part of it. For example, if a shop, office, flat, etc. is to be purchased, this part must be shared at a certain rate over the entire real estate mentioned in the shared title deed.
- During the purchase process, a written consent must be obtained from the other partners of the share deed not to sell their own shares to others. If such an approval cannot be obtained, the sale transaction must be notified to all partners as soon as possible through a notary public. After this notification, other shareholders have 3 months to exercise this right.
- It should be ensured that the sale price is not specified as lower than it should be. Showing a low value in the deed may cause various legal problems in the future.
- If an entire shareholding is purchased, all shareholders must be present at the time of deed transfer. If the shareholders themselves cannot come to the title deed, their legal representatives must come.
- It should be well investigated whether there is any lien or mortgage for every real estate purchased, regardless of whether it is a share title.
