X, Y, Z are siblings who inherited a IO-storey building from their parents. They agreed in writing to maintain it as a co-owned property for leasing out and to divide the net profits among themselves equally for a period of 20 years. On the 8th year, X wanted to get out of the co-ownership so he could get his 1/3 share in the property. Y and Z refused, saying X is bound by their agreement to keep the co-ownership for 20 years. Are Y and Z correct? Explain. (3%)
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Y and Z are partly correct. Under Article 494 of the Civil Code, no co-owner shall be obliged to remain in the co-ownership, but co-owners may validly agree to keep the property undivided for a period not exceeding ten years. Any stipulation
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Quick check
Under Article 494 of the Civil Code, what is the maximum allowable period for co-owners to validly agree to keep property undivided?
Under Article 494 of the Civil Code, co-owners may validly agree to keep property undivided for a period not exceeding ten years.
What is the legal effect of an agreement among co-owners prohibiting partition for twenty years?
An agreement prohibiting partition for more than ten years is valid up to the ten-year limit and void as to the excess.
When may a co-owner demand partition of common property if an agreement prohibits partition for ten years?
A co-owner bound by a valid ten-year agreement prohibiting partition can only demand partition after the ten-year period expires.
How may co-owners extend an agreement prohibiting partition beyond the initial ten-year limit?
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Why are Y and Z only partly correct in refusing X's demand for partition on the 8th year of their 20-year agreement?
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Learn more about these topics
1. Co-ownership Partition Limit
Under Article 494 of the Civil Code, no co-owner is obliged to remain in a co-ownership, as each co-owner may demand the partition of the common property at any time. However, co-owners may validly execute an agreement to keep the property undivided for a period not exceeding ten years. If the co-owners stipulate a prohibition against partition for a period longer than ten years, the agreement is not entirely void; rather, it remains valid up to the statutory ten-year limit and is void only as to the excess period.
2. Partition Prohibition Renewal
While Article 494 of the Civil Code caps any single agreement prohibiting partition at ten years, the co-owners may extend or renew the agreement by executing a new contract upon the expiration of the original term. This extension allows co-owners to continue maintaining the property undivided for another period not exceeding ten years. Without a formal renewal or extension executed after the ten-year period expires, any individual co-owner recovers the immediate legal right to demand the judicial or extrajudicial partition of the common property.
3. Inherited Estate Partition
Under Article 1083 of the Civil Code, co-heirs who inherit real property from a common estate may agree to keep the inherited property undivided for a period not exceeding ten years, renewable by a new agreement. This rule mirrors Article 494 to maintain a balance between contractual freedom among co-heirs and the policy against perpetual co-ownership. Therefore, an agreement among co-heirs to maintain an inherited building undivided for twenty years legally binds them only for the first ten years, allowing partition thereafter.