One house, many heirs: what happens next?

What is a community of heirs and what must they consider?

Everyone has the opportunity to manage their estate during their lifetime and determine who should inherit it. This is regulated by an inheritance contract or will. In the absence of such a contract or will, the legal order of succession determines the individual heirs.

If according to the will, however, a property is bequeathed to several people, these people become co-heirs to this inheritance. The property therefore passes into the joint ownership of a community of heirs. All co-heirs have the same rights and obligations and must consider a few fundamental things.

Six things you need to know about a community of heirs

1. The primary objective of a community of heirs is to divide the estate and then dissolve the community of heirs. 

2. Co-heirs are subject to the principle of joint and several liability. This means that heirs share liability. If, for example, one heir fails to meet their financial obligations with regard to the inheritance, their co-heirs must settle them – using their own private assets if necessary.

3. All heirs in a community of heirs have equal rights, regardless of their relationship to the deceased, social status or age.

4. When co-heirs make decisions, the principle of unanimity applies, meaning a decision can only be made if all co-heirs exclusively vote for it.

5. Every heir has the option of not claiming their inheritance and can declare this within three months of the testator’s death. This may be an advantage if the testator was in debt, for example.

6. If a co-heir dies, their share of the community of heirs also forms part of their estate. This means that they also bequeath their share of the community of heirs to one or more heirs.

That sounds logical and fair, doesn’t it? Unfortunately, however, it’s precisely these principles that often lead to disagreements and problems among co-heirs to a property. Obviously a house cannot be divided up just like that. And sometimes deciding what to do with the property is also problematic, because it requires an amicable solution. In principle, there are three good options that should be considered by a community of heirs to a property.

Three good solutions for a community of heirs to divide the property element of an estate

1. Co-heirs can sell the property

Probably the simplest and quickest solution is to sell the house or apartment, thereby dividing the estate among the individual heirs. This in turn leads to the dissolution of the community of heirs. Of course, all heirs must agree to sell the house, which isn’t always the case.

2. Co-heirs can rent out the property

If they cannot agree on a possible sale, there’s the option of postponing the decision and renting out the property. In this case, a community of heirs can operate as a simple partnership. This model also enables one of the co-heirs to act as the tenant and live in the property. Keeping a jointly owned property in the long term is only advisable if there’s mutual understanding within the community of heirs and individual heirs are largely in agreement. The deaths of individual co-heirs over the years and decades can lead to the addition of new co-heirs, changing the structure and uniformity of the community of heirs. This can cause conflicts and should be carefully considered if you want to maintain a community of heirs in the long term.

3. Individual heirs can be paid off

This can be implemented by one of the heirs acquiring the property and paying off all the other co-heirs. All heirs must agree on the value of the property. A survey can provide an indication of the value. Another option is for individual heirs to sell their share of the inheritance to their co-heirs. Here too, it’s useful to ask an expert to value the property.

These three options require consensus and agreement among the community of heirs. Unfortunately, this isn’t always the case and it’s not uncommon for there to be disputes and discontent when dealing with jointly owned property.

Sell, rent or move in: what can you do if the community of heirs fails to agree?

Dividing up an estate is often a difficult undertaking. If the inheritance includes property, things gets even more complicated. The testator’s children are attached to their parental home, while other co-heirs want to sell it and receive their share. What happens in such a stalemate?

In principle, there are three options when co-heirs to a property fail to agree:

1. Help from a mediator

If heirs are at odds with each other and can no longer make a decision, an independent mediator can help to clarify and resolve the conflicts.

2. Use of heirs’ representatives

If conflicts among heirs cannot be resolved and the community of heirs is therefore unable to operate, someone can be appointed to represent the heirs. They will then be responsible for managing the property until a solution is found.

3. Filing a claim

Every member of the community of heirs is free to file a claim to their share of the property in court at any time. The judge determines the value of the property and thus the share of the co-heir making the claim. The community of heirs can then decide to sell the property and pay off the heirs, or one of them inherits the property and pays off the other heirs. If co-heirs fail to reach an agreement about filing a claim, the court can arrange for the property to be auctioned. This should be avoided, however, because an auction often has a negative financial impact on the heirs. The entire process of filing a claim is extremely protracted, complex and very expensive. It should always be the very last resort for resolving any issues among heirs.

Of course, the best way for a community of heirs to proceed very much depends on the individual case and co-heirs. The least complicated way is to seek a quick, amicable dissolution and division of the estate. Any disputes or conflicts should be resolved, as far as possible. If battle lines have been drawn and co-heirs fail to agree, external mediators can help find common ground.