Co-ownership under the new Civil Code: what changes from 1 July 2027?

The new Civil Code, Act No. 260/2026 Coll. (the “new Civil Code”), replaces the current Civil Code, Act No. 40/1964 Coll. (the “current Civil Code”), from 1 July 2027. The rules on co-ownership are also changing significantly. While the current Civil Code dealt with co-ownership in seven sections, the new Civil Code devotes an entire part to it (Sections 1506 to 1545 of the new Civil Code).

So what is changing, and what should co-owners watch out for?

Why does the new Civil Code speak only of “co-ownership”?

The current Civil Code distinguished between co-ownership in shares and joint ownership of spouses (Section 136(2) of the current Civil Code). Joint ownership of spouses is being replaced by the community property of spouses, so the new Civil Code regulates only one type: co-ownership with shares. As before, the shares are presumed to be equal, and each co-owner may deal with their share as they wish, provided that they do not thereby harm the rights of the other co-owners (Section 1510(3) and Section 1511 of the new Civil Code).

Does the co-owners’ pre-emption right still apply?

Yes. When a share is transferred, the other co-owners have a pre-emption right, unless the share is transferred to a close person (Section 1512(1) of the new Civil Code). However, the new Civil Code brings two significant changes:

• Gifts: The pre-emption right also applies to a gratuitous transfer of a share to a person other than a close person. In that case, the co-owners may buy out the share at the usual price (Section 1512(2) of the new Civil Code). The current Civil Code did not address this question, although case law reached conclusions identical to the new rules.
• Consequences of a breach: Under the current Civil Code, a co-owner could invoke the relative invalidity of the transfer or demand that the acquirer offer the share to them for purchase. In our view, the general rules on the pre-emption right will now apply: within six months of the transfer, the co-owner may demand that the acquirer offer them the share on the same terms, and they are entitled to compensation for damage from the transferor (Section 1673 of the new Civil Code). The new Civil Code does not provide for the possibility of invoking the invalidity of the transfer.

How are decisions about the common thing made?

Under the current Civil Code, decisions on the management of the common thing were taken by a majority calculated according to the size of the shares (Section 139(2) of the current Civil Code). The new Civil Code distinguishes between two levels of decision-making:

• Ordinary management: Decisions are taken by a simple majority of votes calculated according to the size of the shares (Section 1513(2) and Section 1515(1) of the new Civil Code).
• Extraordinary management: A substantial improvement or deterioration of the thing, a change of its purpose, or the creation of an easement or a lien requires a two-thirds majority of the votes of all co-owners (Section 1515(2) and (3) of the new Civil Code).

If the required majority is not reached, the court decides on the application of any co-owner (Section 1515(4) of the new Civil Code).

At the same time, the new Civil Code strengthens the position of minority co-owners:

• Notification: A decision binds all co-owners only if all of them were notified of the need to take a decision; urgent matters are an exception (Section 1516(1) of the new Civil Code).
• Recourse to the court: A co-owner who faces considerable damage as a result of a decision and, in matters of extraordinary management, any outvoted co-owner may turn to the court (Section 1517 of the new Civil Code).
• Time limit: The application must be filed within 30 days of the adoption of the decision; if the co-owner was not notified of the decision, from the moment they learned or must have learned of it. Otherwise, the right lapses (Section 1518 of the new Civil Code).

How can a co-owner leave co-ownership or have it dissolved?

No one can be forced to remain in co-ownership. Each co-owner may at any time request the dissolution of the co-ownership or, newly, their own separation from it, in which case the other co-owners remain in co-ownership. However, they may not do so at an inappropriate time or solely to the detriment of any of the co-owners (Section 1521 of the new Civil Code).

If all co-owners do not reach an agreement, the court decides (Section 1523 of the new Civil Code), in the following order:

• Division of the thing: if this is possible without substantially reducing its value (Section 1524 of the new Civil Code),
• Allocation of the share: to one or more co-owners in return for reasonable compensation (Section 1531 of the new Civil Code),
• Sale of the thing: if none of the co-owners wants the thing, with the proceeds divided according to the shares (Section 1532 of the new Civil Code).

A new feature is the postponement of dissolution. Co-owners may agree in writing that they will not seek dissolution for a maximum of ten years. In the case of real estate, the postponement takes effect only upon its registration in the Land Register (Section 1535 of the new Civil Code). On the application of a co-owner, the court may postpone the dissolution by up to two years, and a postponement may also be ordered by a testator in a will (Section 1536 of the new Civil Code). Conversely, the new Civil Code does not take over the court’s power not to dissolve co-ownership for reasons deserving special consideration (Section 142(2) of the current Civil Code).

What is appurtenant co-ownership?

This is a new legal institute. It arises in respect of real estate that belongs to the owners of several separate properties and serves their common purpose in such a way that those properties cannot be properly used without it (Section 1539(1) of the new Civil Code). Typical examples include a shared access road to family houses or a shared car park.

The share cannot be transferred separately, but only together with the property it serves (Section 1543 of the new Civil Code). As long as the thing fulfils its purpose, appurtenant co-ownership cannot be dissolved against the will of any of the co-owners (Section 1545 of the new Civil Code). The new rules on the common parts of apartment buildings are based on the same principle (Section 1689 of the new Civil Code).

What else is new?

The new Civil Code also expressly regulates several questions that the current Civil Code did not address:

• Unity towards third parties: In relation to the thing as a whole, the co-owners are regarded as a single person (Section 1507 of the new Civil Code).
• Fruits and benefits: If they cannot be divided according to the shares and the co-owners do not agree, they are sold and the proceeds are divided (Section 1509 of the new Civil Code).
• Change of shares: An agreement on a different size of the shares must meet the requirements for the transfer of a share (Section 1510(2) of the new Civil Code).
• Accounting: Each co-owner is entitled to an account of how the common thing has been dealt with (Section 1520 of the new Civil Code).
• Apartments in a building: The definition of apartments and non-residential premises in a building also constitutes a division of the common thing (Section 1524 of the new Civil Code).
• Debts on dissolution: At the same time, the co-owners settle the receivables and debts relating to the common thing (Section 1533 of the new Civil Code).

Do the new rules also apply to existing co-ownership?

Yes. Co-ownership is a right in rem, so from 1 July 2027 it will be governed by the new Civil Code even if it arose earlier. Only its creation and the rights and obligations that arose before that date are assessed under the previous legislation (Section 1893(2) of the new Civil Code). Time limits that started to run before 1 July 2027 are assessed under the previous legislation until they expire (Section 1896 of the new Civil Code).

Conclusion

The new Civil Code, effective from 1 July 2027, regulates co-ownership in considerably more detail than the current Civil Code. It introduces a distinction between ordinary and extraordinary management, strengthens the protection of minority co-owners, allows separation from co-ownership and the postponement of its dissolution, and introduces the new institute of appurtenant co-ownership.

If you own real estate or another thing together with others, it is worth checking how the new rules will affect you, especially when planning to transfer a share, make major changes to the common thing or considering the dissolution of co-ownership. If you are dealing with the transfer of a share, an agreement between co-owners or the dissolution of co-ownership, do not hesitate to contact us.

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