It varies greatly. Where agreement is reached on the sale mechanism, the process can be shortened to a few months.
Dissolution of co-ownership of an apartment inherited by siblings: how it actually ends
In brief: Every co-owner of an apartment may demand dissolution of the co-ownership. Where the apartment itself cannot be divided, it is sold and the proceeds are divided according to the shares. In a case we handled, involving two sisters who inherited an apartment, a mechanism was set under which the apartment is first offered to outside buyers, after which each sister has the right to buy at the highest offer. In the end, one sister bought the other's share.
What happened in the case?
Two sisters inherited a rented apartment in Tel Aviv from their mother, in equal shares. The rights in the apartment were leasehold rights in a cooperative society, and the building was within an evacuation and reconstruction (pinui-binui) compound. From 2019 onwards, every attempt to reach a settlement failed.
We filed a claim for dissolution of co-ownership with the Family Court. The parties reached agreements that were given the force of a judgment, as follows:
- The apartment is sold on the open market to the highest bidder, and the proceeds are divided equally.
- The parties' two advocates are jointly appointed as receivers.
- First stage: a bidding process among outside buyers.
- Second stage: each sister has 14 days to buy the apartment at the highest offer. If both wish to do so, a bidding process is held between them.
- An appraiser is appointed, and a date is set for vacating the apartment.
In the event, one of the sisters bought her sister's share through the receivers for NIS 1,385,000 for the half, subject to the approval of the Execution Registrar and to payment of the society's consent fee.
Under section 40(b) of the Land Law, a sale on dissolution of co-ownership is carried out in the same way as the sale of attached land in enforcement proceedings, unless the court directs some other way that is more efficient and more just. The mechanism agreed by the parties in this case is an example of such a way.
Can dissolution of co-ownership be refused?
As a rule, no. The Land Law provides that every co-owner may at any time demand dissolution of the co-ownership (section 37(a)). The court prefers division in kind, meaning a physical division of the property (section 39), and where a single apartment cannot be divided, it orders its sale (section 40(a)). There are limited exceptions, for example where a co-ownership agreement restricts dissolution, and even then only for a fixed period: after three years the court may order dissolution despite the stipulation (section 37(b)).
Why is the co-owners' right of first purchase important?
It ensures that a co-owner who wishes to keep the property can buy it at its true market price, as determined in an open bidding process, and not at a price that he himself proposes. In this way neither party loses out, and the family can keep the property if one of its members so wishes.
Where is a claim between family members filed?
Where the co-owners are family members, the claim is usually filed with the Family Court, according to the parties' place of residence.
What is special about an apartment in a cooperative society or in a pinui-binui project?
A sale of rights in a cooperative society requires the society's consent, and sometimes payment of a consent fee to it. In a building within an urban renewal compound, the status of the project affects the price and the pool of potential buyers. Both of these factors must be built into the sale plan.
When should you consult a lawyer?
Inherited a property jointly and cannot agree? Send us the inheritance order and the Land Registry extract, and we will look at the quickest and least costly way to end the co-ownership.
To arrange a call: 052-5927592, or on WhatsApp using the button on the website.
About the author
Amos Ilan is an advocate (Israel Bar no. 35320) and a notary (licence no. 214444). The office is at 17 Tzahal Street, Ness Ziona, and handles real estate transactions, construction defects, condominium disputes and civil litigation.
Disclaimer. This article describes a concluded case and is provided for general information only. It does not constitute legal advice and does not promise a similar outcome. Every case depends on its own facts and documents, so it is advisable to consult a lawyer before taking any step.
Questions and answers
How long does dissolution of co-ownership take?
Who pays the receiver?
The fee is usually paid out of the sale proceeds. Appointing the parties' advocates as joint receivers can reduce the cost and, above all, advance the economic interest shared by both parties.
One of the co-owners lives in the apartment. Can he be required to vacate?
Yes. A vacation date is set as part of the dissolution. In addition, a co-owner who has sole use of the property may be liable to pay use fees.
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