"Being a co-owner is no different from being an owner, except that the share of the co-owner is proportional to his or her interest."
Co-owners are usually confronted with various issues on the payment of expenses for repairs and taxes, costs of improvements, management, and administration charges, payments of mortgage amortizations for the property commonly owned, and litigation or legal expenses, among others. These issues may lead the co-owners to disagree if not timely settled.
Equally important are the rights of the co-owner over his part or portion of the property—to alienate, mortgage, enjoy the fruits and benefits thereof, allow a third party to enjoy or use it, to be reimbursed of the expenses advanced for the property co-owned, or demand partition.
A property or right can be owned by an individual, a company, a group of individuals or companies, or a combination of both. Being a co-owner is no different from being an owner, except that the share of the co-owner is proportional to his or her interest in the co-ownership.
Co-ownership is created by law, contract, succession (co-ownership before partition), by chance, or occupation (An Outline of Philippine Civil Law, JBL Reyes, and Puno). Parties may agree to keep a thing undivided for a period of ten years. This period may be extended by a new agreement (Article 494, Civil Code).
Like any owner, the co-owner may use the thing or right owned in common. However, the co-owner may do so only in accordance with the purpose for which it is intended and in such a way that it will not injure the interest of the co-ownership, or prevent the other co-owners from using it according to their rights (Article 486, Civil Code).
Each co-owner shall have the right to compel the other co-owners to contribute to the expenses of the preservation of the thing or right owned in common and in the fulfillment of tax payments. Any co-owner may be exempt from the obligation by renouncing much of his undivided interest equivalent to his share of the expenses and taxes (Article 488, Civil Code).
Repairs for the preservation of the thing commonly owned may be made at the will of one of the co-owners, but must, if practicable, first notify his co-owners of the necessity of such repairs (Article 489, Civil Code). These repairs may include dripping faucets, blocked or collapsed drains, faulty electrical wiring, or leaning concrete fences.
Expenses to improve or embellish the thing, such as landscaping, construction of a koi pond, or improving the façade, shall be decided upon by a majority. The majority is determined by the resolution of the co-owners who represent the controlling interest in the co-ownership (Articles 489 and 492, Civil Code).
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 from it (Article 491, Civil Code). The change of the nature of the property from coconut plantation to swimming resort or a manufacturing plant to a cinema may be considered as alterations.
Alterations include any act of strict dominion or ownership and any encumbrance or disposition has been implicitly held to be an act of alteration. The construction of a house on the co-owned property is an act of dominion. Therefore, it is an alteration falling under Article 491 of the Civil Code which requires consent from all co-owners (Cruz v. Catapang, G.R. NO. 164110, February 12, 2008).
If the withholding of consent to the alteration by one or more of the co-owners is clearly prejudicial to the common interest, the aggrieved co-owner/s may seek adequate relief from the court (Article 491, Civil Code). The aggrieved co-owner/s will have to convince the court that the suggested alteration will not adversely affect the interest of the co-ownership.
The co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto. Hence, he may sell, assign or mortgage his part, and even substitute another person in its enjoyment except when the subject of the co-ownership are personal rights (Article 493, Civil Code).
A co-owner is an owner of a whole and over the whole he exercises the right of dominion, but he is at the same time the owner of a portion which is truly abstract. Hence, his co-owners have no right to enjoin a co-owner who intends to alienate or substitute his abstract portion or substitute a third person in its enjoyment (Torres, et al. v. Lapinid et al., G.R. No. 187987, November 26, 2014).
The effect of the alienation or mortgage of the portion of the co-owner, are limited to the portion which may be allotted to him upon the termination of the co-ownership (Article 493, Civil Code). Hence, the rest of the co-owners must see to it that the documents of conveyance or mortgage only pertain to the sale or mortgage of the part or portion allotted to the selling or mortgaging co-owner.
In the case of Torres, et al. v. Lapinid et al., Jesus (a co-owner) can validly alienate his co-owned property in favor of Lapinid, free from any opposition from the co-owners. Lapinid, as a transferee, validly obtained the same rights of Jesus from the date of the execution of a valid sale. In the absence of any proof that the sale was not perfected, the validity of sale subsists (G.R. No. 187987, November 26, 2014).
In essence, Lapinid steps into the shoes of Jesus as co-owner of an ideal and proportionate share in the property held in common. In case the co-owner disposes his share before partition, such a disposition does not make the sale or alienation null and void. Only his proportionate share, subject to the results of the partition, will be affected by the sale (G.R. No. 187987, November 26, 2014).
If the alienation precedes the partition, as in the case of Cabrera v. Ysaac, the co-owner cannot sell a definite portion of the land without consent from his or her co-owners. He or she could only sell the undivided interest of the co-owned property. In Lopez v. Ilustre, it is said that "[i]f he is the owner of an undivided half of a tract of land, he has a right to sell and convey an undivided half, but he has no right to divide the lot into two parts, and convey the whole of one part by metes and bounds" (Cabrera v. Ysaac, G.R. No. 166790, November 19, 2014).
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. However, the co-owners may agree to keep the property undivided for a period not exceeding ten years (Article 294, Civil Code).
The partition may be made by agreement between the parties or by a judicial proceeding (Article 496, Civil Code). If the co-owners cannot agree to partition the property commonly owned, an action for judicial partition can be duly instituted (Rule 69, 1997 Rules of Civil Procedure). In turn, the estate of the deceased may be partitioned by summary settlement or judicial settlement of the estate (Rules 74 and 90, Special Proceedings).
The co-owners cannot demand a physical division of the thing owned in common, when to do so would render it unserviceable for the use for which it is intended (Article 495, Civil Code). If the thing is essentially indivisible and the co-owners cannot agree that it be allotted to one of them who shall indemnify the others, it shall be sold and the proceeds distributed (Article 498, Civil Code).
While a co-owner has the “right of common dominion which two or more persons have in a spiritual part of a thing which is not physically divided” (An Outline of Philippine Civil Law, JBL Reyes and Puno citing Sanchez Roman), co-owners must observe mutual respect with regard to the use, enjoyment, and preservation of the thing as a whole (An Outline of Philippine Civil Law citing Scaevola).