You would sell the property, but you don't have floor ownership? Or have you decided to buy such a property, but the bank can't give you a housing loan?
In order to avoid such and similar legal and administrative tangles, find out why as the owner of the property you must have registered floor ownership and how to actually carry out floor division and register in the land registry.
What is floor division?
Floor division is a legal procedure in which the owners of specific parts of the property (such as apartments, business premises, and garages) are enabled to be officially registered as the owners of those parts in the land registry. The procedure includes the creation of a floor plan, which describes all the special parts of the building, their surfaces and the shares of co-owners in the common parts of the building.
This procedure is essential because it allows owners to clearly define property rights, which facilitates the later transfer of property, sale or inheritance. Also, floor division makes it easier to obtain a loan because it allows the bank to register a mortgage on a specific part of the building.
Why is floor division important?
The floor division procedure is crucial for any property that is divided into multiple independent units, whether it is residential or commercial space. Floor division formally defines the ownership of each part of the property, which enables the smooth disposal of all parts. This is extremely important for any property that consists of several floors or apartments, because it allows the owners to recognize their rights to the property and register them in the land registry.
How is floor division carried out?
1. Creating a floor plan
The first step in the floor division procedure is the creation of a floor plan, which is a detailed plan of the division of the property into separate units. The plan must be made by an authorized expert such as an architect or surveyor, who will define the exact boundaries between the units, their surfaces and all relevant information about the property. The plan includes a detailed view of each apartment, business space, garage or other parts of the building, and must be in accordance with the current construction and urban planning regulations.
The cost of making a floor plan usually depends on the surface area of the property, but on average it ranges from 3 to 5 euros per square meter. The exact amount may vary depending on the complexity of the division and the specifics of each building.
2. Concluding a co-ownership agreement
After the floor plan is completed, the next step is to conclude a co-ownership agreement, which must be signed by all property owners, because it formalizes the division and defines the rights and obligations of all co-owners.
The co-ownership agreement regulates:
- The rights and obligations of the owner of each apartment or space,
- Division of common areas (such as corridors, elevators, courtyards, roofs, etc.),
- Division of costs for common repairs and maintenance,
- Conditions under which ownership of a particular space can be sold or transferred.
For the preparation of the co-ownership agreement, it is best to engage a lawyer, because this agreement is legally binding and must be formulated in a way that ensures the protection of the rights of all parties. The contract must be certified by a notary public in order to have legal force.
3. Registration in the land registry
The last step in the floor division process is the registration of new floor-divided units in the land registry, which formalizes ownership and allows each owner to freely dispose of their property.
To register in the land registry, it is necessary to submit a registration request together with:
- Floor plan,
- Co-ownership agreement,
- Confirmation of paid property transfer tax (if relevant).
The request for registration of ownership is submitted by the new owner, who can submit the request in person or through a notary public or lawyer. The registration is carried out at the land registry department of the municipal court, and the whole procedure usually takes between 30 and 60 days, depending on the complexity of the case and the current workload of the court.
Who bears the costs of floor division?
Usually, the costs of creating the floor plan and preparing the documentation are borne by all co-owners proportionally to their shares, while the cost of certifying the co-ownership agreement and registration in the land registry also falls on each owner according to the agreement or shares in the common property.
Which conditions must be met for the floor division procedure?
In order to register in the land registry and generally access the floor division process, you must meet some basic conditions:
- Legality of the building: The first and most important condition is that the building must be legally built. This means that it must have valid building and usage permits. If the building has not been legalized or has not been built in accordance with the applicable regulations, floor division will not be possible. Therefore, it is important to make sure that all documents are in order before starting this process.
- Co-ownership consent: Floor division is not something you can do on your own if you are not the only owner of the building. All co-owners must fully agree with the division process and a co-ownership agreement must be adopted. Each co-owner must agree to the division of space and sign the contract in order for the whole procedure to be legally valid. This means that it is important to have a good agreement among the co-owners in order to avoid disagreements later.
- Correct documentation: In order for the floor division to go smoothly, you must have all the necessary documentation. This includes an extract from the land registry, cadastral data, building and usage permit, but also other relevant documents that confirm the legal validity of the building and ownership shares. Without this documentation, floor division will not be possible.
What can be floor-divided?
All parts of the building that can function as independent units are subject to floor division. This means that you can floor-divide:
- Apartments,
- Business premises,
- Garages,
- Parking spaces,
- Balconies, terraces and other rooms, provided that they are clearly separated and defined as separate parts.
It is important to note that only those parts of the building that have a clear and specific purpose can be floor-divided, i.e. those that are used in a way that allows their separate ownership. Therefore, rooms that are not independent or cannot be used separately cannot be floor-divided.
Purchasing a non-floor-divided property through a housing loan
One of the key reasons for floor division is the possibility of buying a property with the help of a housing loan. Banks require that the property be floor-divided in order to be able to register a mortgage on a specific part of the building, and this means that the purchase of a non-floor-divided property is not possible with a housing loan. Such properties can only be purchased for cash.
Why is that so?
Banks cannot approve a housing loan for properties that are not floor-divided because it is not possible for them to define a specific part of the building that would be subject to a mortgage. This means that potential buyers who want to buy non-floor-divided properties must provide financial resources from other sources.
Advantages of floor division
Floor division brings numerous advantages for property owners. Some of the main advantages include:
- Clearly defined property rights: Each co-owner has a clearly defined right of ownership over their part of the property, which allows for easier and more carefree disposal of that part, whether you sell it, rent it or transfer it.
- Possibility of sale, lease and inheritance: When a property is floor-divided, it is much easier for the owners to sell, rent or leave their property to their heirs. A clearly defined individual ownership share enables simpler transactions and inheritance procedures.
- Increases the possibility of financing: Owners of floor-divided properties more easily obtain a housing loan because a mortgage can be directly registered on a specific part of the property. This increases security for financial institutions, which makes it easier for them to approve loans for floor-divided spaces.
Floor division is an extremely important procedure for all owners of residential and commercial spaces within multi-apartment buildings. In addition to enabling a clear definition of property rights, it also brings numerous practical advantages such as easier disposal of property and access to financial services. If you are the owner of an apartment, business space, garage or other part of the building, floor division is the procedure that allows you to have full control over your ownership rights.
