A House Shared by Multiple People was Sold by One of Them. Can the House be Recovered?
2020/1/8
A house shared by many people, each person holds a real estate certificate, and one of them sells it without authorization. Is such a sales contract valid?
It depends on the situation. Co-ownership can be divided into co-ownership by shares and common ownership. The former means that co-owners share ownership according to their shares. For example, four friends jointly buy a store for operation, each taking 25%. The latter means that the co-owners share the ownership, regardless of the proportion or share. This situation is common in families and marriages, such as the co-ownership of the house by the husband and wife.
The Article 97 of the Property Law provides that the sale of a jointly owned house shall be subject to the consent of the co-owners by shares or of all the co-owners who occupy more than two thirds of the share. In the previous example, the total share of the co-owners who agree to sell the shop must exceed 66.7%, that is, the shop can only be sold with the consent of at least three persons. If only one or two persons agree and the share does not reach 66.7%, the shop cannot be sold. In a marriage relationship, the husband and wife, who are the co-owners of the house, must all agree before they can sell the house.
But what if someone who has no right to sell a property has sold it? Can the property come back again? If the purchaser is a bona fide third party and the purchase of the house meets the three conditions stipulated in Article 106 of the Property Law, the sale contract is valid.
What is a bona fide third party? If the buyer of a property does not know that there are other co-owners when buying the property, and there is no reason to believe that the buyer should know that there are other co-owners, the buyer is a third party in good faith.
What are the three conditions stipulated in Article 106 of the Property Law? The three conditions are: (1) the assignee is in good faith when assigning the real or movable property; (2) the transfer is at a reasonable price; (3) the transferred real or movable property shall be registered in accordance with the law, and those that do not require registration have already been delivered to the assignee. We would like to explain each of the three conditions: Firstly, the transferee is in good faith, meaning that the transferee does not know other co-owners disagree to sell, the transferee thought that the sale of the house has obtained all the people agreed. Secondly, the reasonable price is equivalent to the market price, not excessively lower or higher than the market price. Thirdly, according to the law, the transfer of immovable property and part of movable property needs to be registered, the meaning of (3) is that the house has been registered. At the same time in accordance with these three points, the sale of the house is likely to be effective. Losses of other co-owners may be held liable to the seller.