It is not uncommon to encounter the situation in which two people in front of a condominium decide to end it, carrying out an immediate termination of co-ownership.
You can reach this extinction agreement in two ways: the autocompositive way, in which an agreement between the parties is reached; or a heterocompositive way, in which the intervention of a third party or the issuance of a decision by a court is necessary.
The simplest way to extinguish a status of condominium would consist in awarding the ownership of the co-owners to only one of them, while it makes delivery of financial compensation to the other in accordance with the prescribed fee, making the first holder unquite entitled individual of the domain of the property. This compensation shall be subject to payment of the person’s tax obligations.
In addition, if an agreement cannot be reached or if strong disagreements between the parties begin to develop, there still remains the possibility of selling the property, and the posterior proportional distribution of the profit of such sale.
However, there is some complication in following this process, since not all real estate are free of charge, since in many cases we find that the property is encumbered with a real right, generating an obligation of spouses of mortgage payment to a credit institution. Given this situation, it should be set as a goal the extinction of the condominium so that only one spouse is considered owner of the property, while being recognized as the only debtor and leaving the other part free of charge.
For this, the credit institution must also give its consent, since when giving the credit loan initially, both spouses are considered debtors. To do this, the company will conduct a detailed analysis of the solvency of the commoner who will stay with the property, his/her capacity, if necessary, to find a guarantor and the remaining amount left to be paid to extinction the said mortgage itself. In case the creditor fails to accept this new situation, the individual who was to give up his/her part of the property, would remain a solidary debtor of mortgage credit. That is why, at the time of reaching an agreement with the bank, a novation of the initial mortgage loan writing before a notary public will be necessary.
Given the difficulties that may arise in a situation like this, being a separation process already complicated itself, we recommend addressing to the attorneys in DAEMI ZABALZA & ASSOCIATES, whose wide experience supports by itself the best result for their clients.