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This article was originally published on June 1, 2022 and has been updated to reflect recent legal developments.

The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of a lawyer or you may directly contact and consult Alburo Alburo and Associates Law Offices to address your specific legal concerns, if there is any.

Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.

AT A GLANCE:

Co-ownership grants each co-owner substantial rights: the right to use and enjoy the property, to share in its benefits, to compel contribution for necessary expenses, to dispose of his undivided share, and to demand partition. At the same time, these rights are balanced by corresponding obligations to respect the interests of the other co-owners.

Article 484 of the Civil Code of the Philippines states that there is co-ownership whenever the ownership of an undivided thing or right belongs to different persons.

In Perlita Mabalo v. Heirs of Roman Babuyo, G.R. No. 238468, July 06, 2022, the Supreme Court held that in a co-ownership, a co-owner is an owner of the whole and over the whole he or she exercises the right of dominion, but he or she is at the same time the owner of a portion which is truly abstract. The undivided interest of a co-owner is also referred to as the ideal or abstract quota or proportionate share. Concerning this undivided interest, the law made it certain that a co-­owner/vendor’s undivided interest could properly be the object of the contract of sale between the parties.

Once a co-ownership has been established between the parties, the question then arises: what are the rights of the co-owners? The law clearly defines the respective rights and obligations of each co-owner.

Right to Use

Under Article 486 of the Civil Code, each co-owner may use the thing owned in common, provided he does so in accordance with the purpose for which it is intended and in such a way as not to injure the interest of the co-ownership or prevent the other co-owners from using it according to their rights. 

Rights to Benefits and Obligation to as well as in charges

In addition, Article 485 of the Civil Code states The share of the co-owners, in the benefits as well as in the charges, shall be proportional to their respective interests. Any stipulation in a contract to the contrary shall be void. The portions belonging to the co-owners in the co-ownership shall be presumed equal, unless the contrary is proved. 

Right to Initiate an action for ejectment

Article 487 states that any one of the co-owners may bring an action in ejectment.

Right to Compel Contributions for Expenses of Preservation

In case of expenses for preservation, Article 488 is instructive that each co-owner shall have a right to compel the other co-owners to contribute to the expenses of preservation of the thing or right owned in common and to the taxes. Any one of the latter may exempt himself from this obligation by renouncing so much of his undivided interest as may be equivalent to his share of the expenses and taxes. No such waiver shall be made if it is prejudicial to the co-ownership. 

Article 489 further states that repairs for preservation may be made at the will of one of the co-owners, but he must, if practicable, first notify his co-owners of the necessity for such repairs. Expenses to improve or embellish the thing shall be decided upon by a majority as determined in Article 492.

Thus, while a co-owner may initiate necessary repairs, prior notice must be given when practicable. Improvements, however, require majority approval under Article 492, which states for the administration and better enjoyment of the thing owned in common, the resolutions of the majority of the co-owners shall be binding.

Right to Make Alterations

None of the co-owners shall, without the consent of the others, make alterations in the thing owned in common, even though benefits for all would result therefrom. However, if the withholding of the consent by one or more of the co-owners is clearly prejudicial to the common interest, the courts may afford adequate relief. (Article 491)

Right to Demand Partition

No co-owner shall be obliged to remain in the co-ownership. Each co-owner may demand at any time the partition of the thing owned in common, insofar as his share is concerned. Nevertheless, an agreement to keep the thing undivided for a certain period of time, not exceeding ten years, shall be valid. This term may be extended by a new agreement. A donor or testator may prohibit partition for a period which shall not exceed twenty years. Neither shall there be any partition when it is prohibited by law. No prescription shall run in favor of a co-owner or co-heir against his co-owners or co-heirs so long as he expressly or impliedly recognizes the co-ownership. (Article 494)

Right to Full Ownership of One’s Share

In Article 493, each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership.

This provision answers a common question: May a co-owner sell his undivided share in the co-owned property?

The law says: Yes.

A co-owner has full ownership over his undivided share and of the fruits and benefits it carries. He may sell, mortgage, alienate, or dispose of it in any manner, even without the consent of the other co-owners. But the right to alienate or mortgage the property is limited to the portion allotted to the respective co-owner.

Let us take this hypothetical example:

Rene, Gerard Franco, and Pax inherited a parcel of land from their father Jose Mari. The siblings have agreed not to divide the property for a period of five (5) years. After three (3) years, Rene decided to sell his undivided share to Ryan James.

In this case, based from what the law says above, Rene may sell his undivided share to Ryan James. Rene has the right to sell his undivided share in the co-owned property even without the consent of Gerard Franco and Pax. Rene’s right to sell his undivided share is absolute and in accordance with the well-settled doctrine that a co-owner has a full ownership of his undivided share and has the right to alienate, assign or mortgage it and even substitute another for its enjoyment. In other words, the law does not prohibit a co-owner from selling, alienating, mortgaging his ideal share in the property held in common.

If Rene successfully sold his undivided share in the parcel of land, Ryan James is the new co-owner. It means that while the parcel of land is not yet divided, the same now is co-owned by Ryan James, Gerard Franco, and Pax.

In sum, co-ownership grants each co-owner substantial rights: the right to use and enjoy the property, to share in its benefits, to compel contribution for necessary expenses, to dispose of his undivided share, and to demand partition. At the same time, these rights are balanced by corresponding obligations to respect the interests of the other co-owners. The law ensures that while ownership is shared, fairness and proportionality remain the guiding principles.

Related Articles: EXISTENCE OF CO-OWNERSHIP

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Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding legal services, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/ 09175772207/ 09778050020.

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