What applies when buying an undivided co-ownership share: the distinction from condominium ownership, the use agreement, the right to division and rights of first refusal.
BRANDAUER Rechtsanwälte
Salzburg law firm for real estate, property and corporate law
Every matter is handled by a coordinated team of lawyers, legal staff and specialists. In property purchase matters we look at the contract, land register, escrow and tax consequences together.
You do not always buy a whole property. Often it is about an undivided share, that is a fraction of the ownership, for instance a half or a third. In plain co-ownership the property belongs to all participants jointly in fractions, without a particular part being allocated to an individual alone.
This post explains what an undivided co-ownership share is, how it differs from condominium ownership, what role the use agreement, administration and the right to division play and what to watch for with rights of first refusal. It does not replace a review of the individual case.
From a lawyer’s perspective buying a share is more demanding than buying a whole property. You enter into a relationship with the other co-owners, with all rights and duties. Anyone who clarifies this beforehand avoids later conflicts over use and administration.
Answer one to three questions on the type of share and the relationship of the co-owners. You will receive a first classification of what to watch for.
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An undivided share is a mere fraction of the ownership, without any particular part of the property belonging to you alone. This is to be distinguished from a share linked to condominium ownership.
If condominium ownership is attached to the share, you acquire the exclusive right to a specific apartment or object. This follows its own rules, for instance on the reserve fund and the operating costs of the community of owners. The plain co-ownership at issue here is to be distinguished from it.
What applies to condominium ownership is explored in the post on condominium ownership, reserves and operating costs.
If you buy all shares from all co-owners, you acquire the whole property. Make sure all entitled persons really sell and sign, so that title passes to you in full. If one share is missing, you remain only a co-owner alongside the remaining entitled person.
Check the land register status carefully to capture all shares and entitled persons. How to classify entries is shown in the post on reading the land register extract.
As long as it is unclear whether you are buying a plain undivided share or a share linked to condominium ownership, the basis for the classification is missing. The two differ considerably in use, administration and value. Have the land register status checked and the type of share clarified before you bind yourself.
An early classification prevents misconceptions about what you actually acquire. Booking an initial consultation (72 euro) helps with the classification.
In plain co-ownership the property belongs to all jointly in fractions, without a particular part belonging to you alone. Who uses which parts is governed by a use agreement. If it is missing or unclear, conflicts over use loom. Have it clarified whether a rule exists and whether it binds you as a new co-owner.
Bear in mind too that every co-owner can in principle demand the dissolution of the community through division. That can thwart your plans. Booking an initial consultation (72 euro) helps to assess the situation.
If the use agreement is known and any rights of first refusal or consent requirements are checked, the acquisition of the share is well prepared. You know what you may use, and there is no surprise from a right of first refusal of a co-owner registered in the land register.
Bear in mind nonetheless that in plain co-ownership every participant can demand division and administration is carried out jointly. How the coexistence of several owners is organised is explored on the hub page on condominium and tenancy rights.
Before you buy a share, any rights of first refusal or consent requirements should be clarified. A right of first refusal of a co-owner registered in the land register can lead to that person acquiring instead of you. Have the land register status and any agreements checked before you bind yourself.
This way you avoid concluding a contract that comes to nothing through the exercise of a right of first refusal. Booking an initial consultation (72 euro) helps with the check.
In plain co-ownership, governed by sections 825 ff ABGB, a thing belongs to several persons in undivided fractions. Each participant has a share in the whole, for instance a half, but no right to a particular, physically delimited part of the property. The share is undivided, that is notional, not spatially allocated.
Over their own share each co-owner can in principle dispose freely, that is sell or encumber it. The administration of the common thing, by contrast, is carried out jointly, with measures of ordinary administration as a rule decided by the majority according to shares. Anyone who buys a share enters into this structure.
To be distinguished from plain co-ownership is condominium ownership, where the exclusive right to a specific apartment is attached to the share. A first orientation on the contract review is given by our purchase contract risk check.
Because in plain co-ownership no part belongs to an individual alone, the participants often govern the use through a use agreement. It determines who uses which rooms or areas. Such a rule can also bind a new co-owner, so you should know it before the purchase.
An important point is the right to demand the dissolution of the community. Under section 830 ABGB every participant can in principle demand division, provided it is not demanded at an inopportune time. This can lead to a physical division or, where this is not possible, to an auction. Anyone who wants to stay a co-owner with the others permanently should bear this in mind.
Finally you should check for any rights of first refusal. A statutory right of first refusal does not exist as a matter of course in plain co-ownership, but a contractual one may be agreed and registered in the land register. How to identify such entries is shown in the post on reading the land register extract.
These points decide whether you know what you acquire and whether later conflicts are avoided.
| Point | Recommended | Possible risk |
|---|---|---|
| Type of share Clearly determined | Plain co-ownership clearly identified | Confusion with condominium ownership |
| Use Governed | Use agreement known and considered | Dispute over the use of the thing |
| Administration Understood | Joint administration planned for | Surprise through majority decisions |
| Division Considered | Participants’ right to division taken into account | Unexpected dissolution of the community |
| First refusal Checked | Registered rights of first refusal observed | Acquisition comes to nothing through first refusal |
The rules on plain co-ownership follow sections 825 ff ABGB. Scope and effect in the individual case depend on the specific agreements.
Caution when buying a share: With an undivided share you do not acquire a delimited part of the property but a fraction of the whole with all rights and duties towards the other co-owners. Clarify use, administration, the right to division and rights of first refusal before signing. Booking an initial consultation (72 euro) can quickly provide clarity here.
The purchase contract should designate the share precisely and refer to an existing use agreement. It makes sense for the seller to disclose the current state of the agreements with the other co-owners, so that you know what relationship you enter into. The discharge of encumbrances on the share should also be governed.
If any rights of first refusal or consent requirements exist, they belong in the contract, where appropriate as a condition precedent. This avoids the contract coming to nothing through the exercise of a right of first refusal. The escrow handling ensures that the purchase price flows only once all requirements are met.
Because buying a share raises particular questions, support from a firm is sensible. A related constellation, buying from an estate with several heirs, is explored in the post on buying property from an estate.
In plain co-ownership under sections 825 ff ABGB a property belongs to several persons in fractions. Each has a share in the whole, for instance a half, but no right to a particular, physically delimited part. The share is undivided, that is not spatially allocated.
Under section 830 ABGB every participant can in principle demand the dissolution of the community through division, provided it is not demanded at an inopportune time. This can lead to a physical division or to an auction. Anyone who wants to stay a co-owner permanently should bear this right in mind.
A statutory right of first refusal does not exist as a matter of course in plain co-ownership. A contractual right of first refusal may, however, be agreed and registered in the land register. Check the land register status and any agreements before you buy a share.
The hub page on how the coexistence of several owners is organised.
What applies to a share linked to condominium ownership.
A related constellation with several entitled persons.
How to identify shares, encumbrances and rights of first refusal in the land register.
When buying property, the contract and the land register decide. Call us directly or send an email, callback within one business day.
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