The purpose of this article is to briefly review the different forms of ownership, particularly land ownership.
First and foremost, it is necessary to briefly recall what is meant by "ownership" in the legal sense of the term.
Indeed, according to Art. 641 para. 1 of the Swiss Civil Code, ownership is the right conferring total and exclusive control over a thing, within the limits of the legal order.
The right of ownership includes the ability to use the thing (usus), to collect its fruits (fructus), and to dispose of it (abusus), materially or legally.
However, this right may be limited by numerous restrictions arising from both public law and private law.
Restrictions under public law include, for example, building regulations.
Those arising from private law include, for example, easements, which grant one or more third parties a right to use the property or part of it, either exclusively or jointly with the owner, thereby limiting the owner's rights regarding the disposal or use of their property.
For these types of rights, we speak of limited real rights, but this is not the subject of this article.
With that said, it is important to distinguish between:
- individual ownership,
- collective ownership and its different forms.
Individual Ownership
In this case, the right of ownership is exercised by a single person (individual ownership).
It follows, referring back to our introduction, that the owner alone holds control over the thing and has all the rights attached to ownership, subject to the reservations mentioned above.
Individual ownership arises either from a contract or from acquisition following a death, when the deceased leaves only one heir.
Collective Ownership (Art. 646 et seq. SCC)
Collective ownership occurs when a property belongs to several persons, whether natural and/or legal persons.
In accordance with the numerus clausus principle, collective ownership can only take two forms, namely:
- co-ownership (Art. 646-651 SCC)
- common ownership (Art. 652-654 SCC)
1 – Co-ownership (Art. 646 et seq. SCC)
This is a form of ownership originating from Roman law.
Under this ownership regime, each co-owner owns a share of a whole individually.
Co-ownership arises exclusively from a contract. The shares are conventionally determined, that is, by the contract establishing the co-ownership between the parties; failing that, they are considered equal. The owner of their share may freely dispose of it.
For example, they may sell it or encumber it with a real right (such as creating a mortgage).
However, in the case of a sale for consideration, the other co-owners have a legal right of first refusal (Art. 682 SCC), unless this right has been voluntarily and contractually waived.
Ordinary co-ownership, or simple co-ownership in the current terminology of the Land Register, does not imply an exclusive right to use and manage a specific part of the property in question. Thus, we speak of a financial or intellectual share, even though an administrative regulation may be adopted by the co-owners to modify or derogate from the legal rules.
Subject to this, the management or administration of co-ownership is governed by the rules found in Arts. 647 et seq. of the SCC, depending notably on the importance of the decisions to be made.
Ownership by floor (Art. 712 et seq. SCC)
This is a particular form of ordinary co-ownership that allows the organization of the use of a building.
Indeed, this particular ownership right grants the owner of each share (commonly called a lot) the exclusive right to use, internally arrange, and maintain a specifically delimited part of a building.
In a "stricto sensu" perspective, this is a legal relationship in which the entire building belongs in co-ownership to several persons who also have an exclusive right of enjoyment over a precisely defined part of the building (apartment, commercial space, garage).
The rules concerning the administration of co-ownership mentioned above (Arts. 647 et seq.) also apply within the framework of ownership by floor and are supplemented by Arts. 712 et seq. SCC. It should be noted that not all of these rules are mandatory.
2 – Common Ownership (Art. 652-654 SCC)
Unlike the Latin origins of co-ownership, common ownership is of Germanic origin.
Under this ownership regime, the ownership right of each owner extends to the entire thing (Art. 652 SCC), but they can only dispose of it jointly with the other owners.
In other words, each owner holds a right over the whole object, but exercises this right jointly with the other owners.
Common ownership arises either by law (inheritance by multiple heirs, matrimonial property regime of community of property) or by contract (such as a simple partnership agreement).
The notion of shares exists but is purely financial, applying to the distribution of income from a property or the proceeds of its sale.
Key Takeaways
In conclusion, the individual ownership regime poses no problems other than those resulting particularly from land ownership, which is known to be subject to numerous restrictions of all kinds (such as tenancy law).
Collective ownership, on the other hand, must be managed and organized by professionals since it involves the joint management of a single object. The choice of ownership regime (simple co-ownership, condominium ownership, common ownership), where it exists, is important both from the perspective of relationships between owners and in determining their respective rights over the property.
The subject is therefore extremely complex and varied, and it is highly recommended, when choosing or organizing a collective ownership regime, to consult a professional.
Real estate crowdfunding (crowdinvesting) is organized under ordinary ownership (see 1- Co-ownership (Art. 646 et seq. SCC).
