How to partition co-owned real estate in Japan?

I have joint ownership of a land in Japan. I want to sell the land and gain the price. Can I sell the land by myself without another co-owner’s consent? Can I separate the land and sell my portion?

In order to sell co-owned property, consent of all the co-owners is needed. One of co-owners can negotiate with other co-owners to sell the property together or partition the property. If the property is divided, the separated portion can be sold without other’s consent. When the negotiation does not reach an agreement, one of co-owners can submit a request of partition to the court.

When you have joint ownership of real estate in Japan, consent of all the co-owners is needed to sell the real estate. Each co-owner has share of the property; one of co-owners cannot sell another co-owner’s share without its consent.

Therefore, if you intend to sell the property, the first thing to do is to persuade other co-owners to sell the property together.

If other co-owners do not consent to your proposal, there are three alternatives:

  • (i) giving up selling;
  • (ii) selling only your share of the property; and
  • (iii) taking procedures to partition the property.

The first choice cannot be a solution. The second choice can be a solution, but it would be difficult to sell your share because of inconvenience of co-ownership. So, the third choice would be a realistic solution.

Procedures to partition co-owned real estate

Each co-owner may demand the partition of property at any time (Civil Code Article 256 (1)).

If no agreement is reached among co-owners with respect to the partition of property, they can submit a request for partition to the court (Civil Code Article 258(1)).

(1) The court may divide property physically. If co-owned property is a land, it may be divided by deciding borders. Considering rational and fair border would be pretty tough work. Assessment by a real estate appraiser would be needed in the process of the court.

(2) The court may allow one of the co-owners to gain all of property by paying price to the others. It may be easier and more reasonable than physically dividing property. However, if two or more co-owners insist to gain property, it would be hard to decide which co-owner should gain it. In order to decide the price, assessment by a real estate appraiser would be needed.

(3) The court may sell property at auction and divide the price (Civil Code Article 258 (2)). The price by auction would be pretty lower than normal transactions. Therefore, it is rational for all of the co-owners to sell the property by normal transactions than selling at auction by the court. However, if normal selling and physical partition cannot be reached, selling at auction by the court would be the last resort to realize co-owned real estate.

By this legal procedure, a co-owner can realize property without the consent of other co-owners.

*Civil Code
(Demands for Partition of Property in Co-Ownership)
Article 256 (1) Each co-owner may demand the partition of property in co-ownership at any time; provided, however, that this does not preclude concluding a contract agreeing not to partition that property for a period not exceeding five years.
(2) The contract under the proviso to the preceding paragraph may be renewed; provided, however, that the period thereof may not exceed five years from the time of the renewal.

(Partition of Property in Co-Ownership by Judicial Decision)
Article 258 (1) If no agreement is reached among co-owners with respect to the partition of property in co-ownership, a request for partition of the same may be submitted to the court.
(2) In cases referred to in the preceding paragraph, if the property in co-ownership cannot be partitioned in kind, or it is likely that the value thereof will be significantly reduced by the partition, the court may order the sale of the same at auction.