The Most Suitable Form of Home Ownership
By yourself, together with a partner, as joint owner, or in an association: Owning property can take many forms. Here is an overview of the most important ownership structures.
Property ownership is not the same as owning a property. The law provides different forms of ownership for houses and apartments. Which of these is best for you depends on your own personal preferences, circumstances, and plans for the future.
Sole Ownership: Owner Has All Rights and Obligations
In this case, the property belongs to one person whose name is entered as the owner in the land records. Sole owners can use and take decisions about the property without restriction, but they also bear full responsibility for any and all associated financial obligations, including taxes, maintenance costs, and interest payments. This form of ownership is suitable, for example, for cohabiting couples who do not wish to divide their respective ownership claims.
The spouse or registered partner of a sole owner enjoys special protection if the property is used as the family home. In this case, the property cannot be sold without the consent of the spouse/partner whose name does not appear in the land records. In the event of a break-up, the partner who is not the owner may be granted temporary residential rights based on a court ruling.
Ownership in Common: Decision-Making Authority Lies with the Community
With ownership in common, the property is owned by several persons. The property is deemed to be owned in common, but the overarching relationship (e.g. marriage contract or community of heirs) stipulates how much of the property is owned by each individual. It is advisable to draw up a partnership agreement to define how the residential property has been financed. All decisions must be joint decisions. The community of owners bears all the rights and obligations. The consent of all owners is required for all issues relating to the property, including its sale.
Joint Ownership: Each Individual Can Freely Dispose of Their Shares
With joint ownership, the property belongs to several individuals, each of whom has a defined share of the property which is entered in the land records. Joint owners can freely dispose of their share of the property, by selling or pledging it for example. However, unless otherwise agreed, they also bear the associated rights, obligations and costs relating to their share.
When a joint owner wants to sell his or her share of the property, the other joint owners have a right of pre-emption (first refusal). This form of ownership is particularly suitable for cohabiting couples because in this case – in contrast to ownership in common – it is possible to use pension fund and Pillar 3a assets toward a deposit. This is also the most common form of ownership for married couples who have chosen the marital property regimes of sharing of acquired property or separation of property.
Condominiums: A Special Form of Joint Ownership
Condominiums represent a special form of joint ownership. When you buy a condominium, you buy a share of the building and the land it stands on. At the same time, you receive exclusive rights to use and develop certain parts of it. These include your own apartment and ancillary areas such as the cellar, attic, and garage. The owner bears the rights, obligations, costs, and risks associated with these areas. Everything which falls outside the owner's exclusive rights (e.g. the stairwell, parts of the garden) is owned and managed by the condominium association.