Separate ownership and common ownership Part V · Conversion of common ownership into separate ownership

Abogado & RA Ingmar Hessler

29. May 2015

Conversion of common property into separate property

[pullquote]If common property is to be converted into separate property, all participation quotas must also be redistributed.[/pullquote]

A conversion from common property to separate property is possible if this is done in accordance with Articles 5 and 17.6 LPH by unanimous resolution of the owners’ meeting. This is because the conversion results in a change to the structure of the property as set out in the declaration of division. In addition, the shares must be redistributed. Each separately owned element requires a share in the co-ownership, which is why a share must also be allocated to the former common element that has been converted into separately owned property.

The redistribution of shares may also change the existing majority ratios. If there has been a deadlock in voting behaviour with consolidated groups, this may change. The cards are being reshuffled, so to speak.

Since the quotas are expressed in hundredths in accordance with Article 3.2 LPH, and all elements of special ownership together form one hundred hundredths of the shares, the creation of new special ownership requires a recalculation and redistribution of all shares. This also affects the declaration of division or the articles of association, which is why a unanimous resolution is also necessary for this reason. As a result, not only does the distribution of costs and thus the contribution obligation of the individual owners, which is normally proportional to the size of the share, change for the community, but also the majority ratios. Since, according to Article 17 LPH, majorities must be achieved both in terms of votes and quotas in order for a resolution to be passed, the weighting and thus the previous influence of the respective owners may also change.

Abogado & RA Ingmar Hessler

Born and raised in Frankfurt am Main in 1973, he is a German lawyer and Spanish abogado, admitted to the bar in both Spain and Germany. He advises and represents his clients both in and out of court in both countries. He is a member of the Frankfurt am Main Bar Association, as well as the Murcia and Madrid Bar Associations. Before practicing law, he completed two postgraduate courses. He earned an LL.M. from the Universidad ICAI-ICADE (Madrid) and an M.B.A. from the Universidad Autónoma de Barcelona. After passing the state translation examination and being appointed by the Spanish Ministry of Foreign Affairs, Mr. Hessler has also been working as a sworn translator and interpreter since 2004.