Court Termination of Real Estate Co-Ownership: Process, Options and Risks

JUDr. Jakub Dohnal, Ph.D., LL.M.
JUDr. Jakub Dohnal, Ph.D., LL.M.
17.4.2026 | ARROWS law firm

When co-owners cannot reach an agreement on the settlement of jointly owned property, they have no choice but to turn to the court. Court proceedings for the termination of co-ownership of real estate have their specific features and pitfalls. In this article, you will learn how the court proceeds, what the three statutory methods of settlement are, how long the proceedings take, and what financial and legal implications they have.

In the image, we see attorneys consulting on the dissolution of co-ownership of real estate.

Quick summary

  • Court-ordered termination of co-ownership of real estate is a right of every co-owner regardless of the size of their share—no one can be forced to remain in co-ownership. The court will dismiss the claim only in truly exceptional cases, and even then it may only postpone the termination, not refuse it entirely.
  • Czech law provides for three methods of settlement in a fixed order: physical division of the property, awarding the entire property to one co-owner against financial compensation, or sale by auction and distribution of the proceeds. The court must carefully justify any rejected method and will have an expert opinion prepared for its decision.
  • The entire process takes on average 2 to 5 years and costs tens to hundreds of thousands of Czech crowns—while each party pays for its own legal representation. A voluntary agreement or mediation is always a faster and cheaper alternative than having the matter decided by the court.

The essence of co-ownership and when to file a claim

Co-ownership of real estate arises where ownership title to a single property belongs to several persons at the same time. Each co-owner has a right to the entire asset, not to a specific part of it—the share merely expresses their percentage participation in the property.

This situation often arises through inheritance, purchase, divorce, or a joint acquisition of real estate. If the owners then cannot agree on how to separate their interests legally, one of them must seek termination and settlement of the co-ownership before the court, because no one can be forced to remain in co-ownership (Section 1140(1) of Act No. 89/2012 Coll., the Civil Code, hereinafter the “Civil Code”).

The right to file such a claim truly belongs to any co-owner regardless of how large their share is. You do not need to own a majority share or have any special reason—it is enough that you want to leave the co-ownership. The only limitation is that, under Section 1140(1) of the Civil Code, termination of co-ownership cannot be sought at an inappropriate time or solely to the detriment of any of the co-owners. Such cases are rather exceptional, however.

The claim is filed with the competent District Court and must be brought against all other co-owners. In practice, it is worth clarifying in advance the related property-law aspects concerning the real estate (e.g., acquisition titles, easements, or pledges/mortgages), which is commonly handled within real estate law. This means that all co-owners become parties to the proceedings—and this is where the first specifics of the process emerge.

Specific nature of the court proceedings: iudicium duplex (dual proceedings)

Proceedings on the termination and settlement of co-ownership have a special name in legal theory: iudicium duplex (dual proceedings). This means that the parties do not have the usual positions of “claimant versus defendant”; rather, everyone is simultaneously in both roles. The court is not bound by the idea that one of you must be the winner or the loser, because the purpose of the proceedings is to settle property relations, not to determine a “winner”.

This has a huge impact on one of the most critical questions: who will pay the costs of the proceedings? In standard civil disputes, the losing party pays all costs. Here, however, there is no “loser”, and therefore, under established case law and legal practice in the Czech Republic, the court typically decides that each co-owner bears their own costs of legal representation. If you are dealing with how to handle the costs (especially expert opinions and court fees) in the most effective procedural way, it may be useful to build on the practical context described in the article Inflation clauses in contracts for work: Czech Statistical Office indices vs. ÚRS and proving the real increase in material prices.

This rule has one consequence: all parties share, in equal parts, the public costs of the proceedings (e.g., expenses for expert opinions, court fees, etc.), and each pays for their own lawyers.

When the court will dismiss a claim for termination of co-ownership

The court will dismiss the claim only in truly exceptional cases. Under Section 1140(1) of the Civil Code, this is possible only if termination of co-ownership is sought at an inappropriate time or solely to the detriment of any of the co-owners.

In practice, this applies, for example, to situations where termination could cause disproportionate hardship (e.g., the immediate loss of housing for one of the co-owners without securing a substitute solution). Even in such a case, however, the court may only postpone the termination for a maximum of two years (Section 1140(2) of the Civil Code), not dismiss it entirely.

At this stage of the proceedings, the attorneys of ARROWS, a Prague-based law firm, pay special attention to determining whether any of those rare obstacles to termination exist. If it seems that your case falls into the category of “I really cannot terminate it now”, it is advisable to consult a specialist who can explain all the nuances. In these situations, the procedural setup of the dispute and work with evidence are often key, which falls within the area of commercial and litigation disputes.

Three methods of settlement and their order

When the court decides that co-ownership can be terminated, it must also decide how it will be settled. The Civil Code provides for three methods in a strict order—the court must proceed through them sequentially and carefully justify each rejected method. These methods are set out in Section 1143 of the Civil Code.

Division of the property

The first and preferred method is physical division—meaning the actual, physical separation of the real estate. Typically, for land or houses divided into multiple apartments, it is possible to allocate one part to one owner and the remainder to another. For this decision, the court will obtain an expert opinion assessing whether the division would lead to a substantial decrease in value. For apartment buildings and units, considerations of physical division and interventions in common areas may also be affected by the SVJ regime (association of unit owners), which is summarised in the update Association of Unit Owners (SVJ): New SVJ obligations in relation to an apartment building from January 2027.

What does “substantial reduction” mean? According to the case law of the Supreme Court, it is not just any reduction, but one that exceeds 15% of the original value. If the value were reduced by only 12%, the division is considered permissible by the courts. If the decrease exceeds 15%, the court must consider other methods.

In practice, division is very often not used for houses, because the building on the land and the physical separation would cause precisely that substantial reduction in value. For land without buildings, the chances are higher, but even there it depends on the specific situation.

Awarding the property to one or more co-owners in return for compensation

If an actual division is not realistically feasible (which is very common in practice), awarding comes into play. The court assigns the entire property to one or more co-owners and decides that the others will receive money as a settlement, i.e., compensation for their share.

However, there are important limitations here. The co-owner to whom the property is to be awarded must:

  • Express an interest in it – if not all co-owners want the property, it cannot be awarded to them against their will.
  • Be solvent – be able to pay the others their share. This means having sufficient financial resources or the ability to secure a mortgage. The court reviews this ability very carefully, because otherwise the decision would be unenforceable.

Awarding is not a question of who offers more money. The court also takes other circumstances into account, such as who has been living in the property long-term, who maintains and repairs it, who has invested in it, and, where applicable, even emotional ties to the house. This means that someone who offers less money but has lived in the house for 20 years and taken care of it may have a better chance than someone who offers more but has neglected the property for a long time.

Attorneys from ARROWS, a Prague-based law firm, play a crucial role here – they develop the arguments that will persuade the judge why the property should be awarded to their client, while also ensuring that the valuation of the property is objective and fair.

Sale of the property at auction and distribution of the proceeds

The last and most extreme option is for the property to be sold in a public auction and the proceeds to be distributed among the co-owners according to their shares. An auction is typically used when:

  • the property cannot realistically be divided,
  • none of the co-owners is interested in having the property awarded to them or is able to pay the compensation,
  • all co-owners agree on a sale but cannot agree on the specific method.

The court is not bound by the claimant’s proposal. For example, if the claimant requests division but the court finds that it is not possible, it does not have to grant the request and may proceed directly to a sale. This surprises many people – one imagines a particular scenario, but the court may decide differently.

Practical course of court proceedings

Court proceedings usually run as follows:

Filing the claim – the claimant files a claim with the competent district court in the Czech Republic. It should list all parties (all co-owners), describe the property, and set out the proposal for how the co-ownership should be settled. Although the court will help supplement missing formalities, precise drafting of the claim by an attorney can significantly speed up the proceedings and prevent complications. Many entrepreneurs try to file the claim themselves without a lawyer to save money, but they usually end up paying for it later through complications.

Preparation for the hearing – the court summons all parties to a hearing and verifies that everyone has been properly served and that the claim meets the formal requirements. If not all parties are present, the proceedings are suspended and the claimant is given time to supplement the missing information.

Expert opinions – in many cases, the court orders an expert opinion to determine the usual market price of the property and/or assess whether it can be divided. This typically takes 4 to 8 weeks and costs CZK 10,000 to CZK 50,000 depending on complexity.

Main hearing – the parties, in person or through their representatives, submit their comments, present evidence, and the expert explains their opinion. Substantive issues are discussed and decided at the hearing.

Judgment – the court issues a judgment in which it decides on the termination of co-ownership, determines the method of settlement, and describes what is to happen. For example: “The property is awarded to Ms A into her exclusive ownership; Mr B will receive financial compensation in the amount of CZK 2,500,000.”

Legal force – until the judgment becomes final and binding (i.e., no ordinary remedy—an appeal—can be filed against it), the change of ownership is not registered in the Land Register (Czech Cadastre of Real Estate).

Registration in the Land Register – after the judgment becomes final and binding, the new ownership can be recorded in the Land Register (Czech Cadastre of Real Estate) on its basis. This is carried out by the cadastral office upon application, usually filed by an attorney or a notary.

The entire process takes at least two to three years in straightforward cases; in complex cases, it can take up to five years.

Most common questions about the course of court proceedings

1. Can I file a claim even if I know the co-owner and I don’t want to argue?
Yes. A claim to terminate co-ownership is not “slandering” – it is a legal instrument for resolving a property situation under Czech law. You can even agree with the other co-owner on what will be proposed in the court dispute, and you do not actually have to argue. Many relatives, business partners, or former partners proceed this way – they file a claim purely as a legal formality to separate, but both know how it will end.

2. How long can I expect to wait for a judgment?
On average, 2 to 4 years. This includes the time between filing the claim and the first hearing (3 to 6 months), the hearings themselves (even several years if the proceedings are prolonged, e.g., due to evidence, expert opinions, or appeals), and finally the issuance of the judgment (several months).

3. How much will it cost me?
The basic court fee for filing a claim to terminate and settle co-ownership is a fixed amount, usually in the lower thousands of Czech crowns (as of 2026, for example, CZK 2,000). However, the total costs of the proceedings, which also include court expenses (e.g., for expert opinions) and the fees of legal representatives, are significantly higher. An expert opinion costs CZK 10,000 to CZK 50,000. You pay your lawyer yourself – typically a fee of around CZK 50,000 to CZK 200,000 for representation in the proceedings, depending on complexity. Conversely, it is usually not possible to recover full reimbursement of legal fees from the opposing party, as mentioned above.

Property valuation and expert opinions

A key element of proceedings to settle co-ownership is proper valuation of the property. If the property is awarded to one co-owner in return for compensation, it must be clear how much the other co-owner will receive. This is where the expert comes in – an independent specialist who assesses the market value of the property.

In practice, a number of problems arise. Sometimes experts use simplified coefficients without careful justification, which leads to disputes between the parties. A proper expert opinion should include:

  • a detailed description of the property, including its technical condition,
  • an analysis of comparable sales in the area,
  • an assessment of the impact of co-ownership on value,
  • consideration of future maintenance costs or potential repairs,
  • a clear explanation of the methodology.

Attorneys from ARROWS law firm in Prague often report a recurring issue in practice: experts without sufficient understanding of the specific aspects of co-ownership value the asset simply as if it were under sole ownership, without taking into account additional risks arising from a future division or from the fact that one owner will not be able to sell it on their own. This leads to undervaluation or overvaluation, and thus to an unfair settlement.

If an expert opinion seems suspicious to you, you should have it reviewed. Attorneys from ARROWS law firm in Prague can critique the opinion and propose consulting another expert, or request that it be supplemented.

Most common questions on valuation and technical aspects

1. Can the court reject an expert opinion that does not suit me?
Yes, it can. The court is not bound by an expert opinion if it finds that the opinion contains an obvious error or is based on incorrect facts. In practice this happens rarely, but reasons for rejection may include, for example, if the expert did not visit the property at all, or if their valuation is clearly outside market reality. Attorneys from ARROWS law firm in Prague can challenge such an opinion by requesting a new one from another expert, or by submitting their own analysis of market prices in the area.

2. Who selects the expert?
Formally, the expert is appointed by the court. In practice, the court asks the parties whether they have any suggestions, and in large cities there are lists of registered experts. It is not excluded that the parties propose an expert with whom they have good experience. 

3. How is the settlement amount calculated if the house is mortgaged?
This is a complex question. The starting point is the market value of the property. However, if there is a mortgage on the property, settlement shares are usually calculated from the value after deducting the remaining principal on the mortgage. So if the house is worth CZK 5 million and there is CZK 2 million remaining on the mortgage, the net value (so-called equity) is CZK 3 million, and the share is calculated from that.
This can create problems if one of the co-owners is “in the red” — they do not have sufficient funds to take over the house and pay out the others.

Specific situations and special legal regimes

Co-ownership arising from inheritance is very common. When an owner dies and the property passes to multiple heirs, they automatically become co-owners. In this case, the procedure is the same as in a standard termination of co-ownership, but there is an additional personal element — relatives often do not have good relationships, which complicates the proceedings. Everyone must reach a joint solution, or the court will decide.

Apartment co-ownership

A special regime applies to buildings that have been divided into units (apartments), or to co-ownership of the units themselves. Where it concerns co-ownership of the common parts of a building that serve a common purpose and are necessary for the proper use of individual units (e.g., the roof, foundations, staircases), Section 1140(1) of the Czech Civil Code (OZ) provides that the provisions on termination and settlement of co-ownership do not apply to them, unless the co-owners agree otherwise.

The court therefore cannot terminate such co-ownership against the will of any of the unit owners. However, if only the apartment unit itself is held in fractional co-ownership (e.g., one apartment is owned half-and-half by spouses), then the termination and settlement of such co-ownership is governed by the general rules of the Czech Civil Code. Attorneys from ARROWS law firm in Prague are well versed in apartment co-ownership and know how to proceed.

Co-ownership with a pledge (lien)

Co-ownership is often encumbered by a registered pledge (typically a bank for a mortgage). This must be taken into account in the proceedings — the court will order a sale or award the asset based on an expert opinion, but the pledge remains in its priority order. Therefore, if the bank wants to receive its money from the proceeds, it must be paid first, or the new owner will assume the mortgage with the bank’s consent.

Table of practical risks and solutions

Possible issues

How ARROWS helps (office@arws.cz)

Lengthy proceedings (3–5 years): Uncertainty, the need to wait, stress. 

Attorneys from ARROWS law firm in Prague ensure effective representation, timely filing of all submissions and monitoring of deadlines; they can initiate mediation meetings that speed up the proceedings.

High costs (expert, attorney, court fee): Each party bears its own costs without the possibility of full reimbursement from the opposing party. 

ARROWS law firm in Prague helps structure the proceedings to minimize unnecessary expert opinions; we also consider alternatives such as mediation, which is often cheaper.

Biased property valuation: The expert undervalues or overvalues, leading to an unfair settlement. 

Attorneys from ARROWS law firm in Prague review expert opinions, challenge them if they are incorrect, and, if necessary, request a new opinion from another expert.

Inability to reach agreement with the other co-owner: Conflicts, personal animosity, deadlocked negotiations.

Attorneys from ARROWS law firm in Prague provide professional mediation and communication that separates personal relationships from the legal solution; they can also negotiate with the other party’s representatives.

Unexpected court decision: The court does not follow your proposal, awards the asset to another co-owner, or orders a sale at auction. 

Attorneys from ARROWS law firm in Prague prepare persuasive arguments in advance; they submit detailed reasons why the settlement should be carried out in your preferred manner.

Financing or solvency issues: One co-owner does not have the money to pay out the other, the mortgage cannot be transferred. 

ARROWS law firm in Prague negotiates with banks, reviews refinancing options and looks for solutions that enable the court judgment to be implemented without complications.

Most common procedural mistakes and how to avoid them

In practice, attorneys encounter recurring mistakes that clients make:

Failure to file the claim in time – someone waits for years while the situation worsens and the other side insists on their position. The longer you wait, the more complex the proceedings will be. You should decide and act as soon as you know you will not reach an agreement with the other co-owner.

Filing a claim without an attorney – a layperson often forgets to list all parties, describes the property incorrectly, or fails to formulate a clear request. The court then suspends the proceedings and sends it back for correction. Attorneys from ARROWS law firm in Prague will ensure that all formal requirements are met.

Insufficient preparation for the expert opinion – if you prepare poorly, the expert may unknowingly overlook important details or rely on incorrect information. You should provide the expert with complete documentation and mention all relevant facts.

Ignoring communication from the court or the opposing party – some people try to avoid the proceedings by not responding. This is a serious mistake — it can lead to a decision being made without you or to delays. You must monitor all correspondence and respond to everything.

Underestimating financial costs – Many people assume the proceedings will be inexpensive. When the bill for the expert witness and the attorney arrives, they are often surprised. You should clarify all costs with your attorney in advance.

Tax implications of terminating and settling co-ownership

An often overlooked aspect is the tax impact. When co-ownership is settled and the other party pays you money for your share, does this mean you will be subject to income tax?

For individuals, monetary consideration received as part of a co-ownership settlement is not regarded as income from the sale of real estate. However, it may be subject to income tax as so-called “other income” under Section 10 of Act No. 586/1992 Coll., on Income Taxes (the “ITA”) if it exceeds the acquisition cost of the extinguished share.

In such a case, it is assessed whether the conditions for an income tax exemption are met, similarly to income from the sale of real estate (e.g., meeting the time test of holding the property for a certain period or using it for one’s own housing), which are set out in Section 4 of the ITA.

However, if you are an individual and the property is used for business purposes (e.g., you rent it out) or if you are a legal entity, the situation becomes more complicated. In that case, personal income tax on business income or corporate income tax may apply under Czech legislation.

Our attorneys in Prague at ARROWS can advise you on the tax aspects as well and ensure that the settlement is structured in a way that minimizes tax liabilities.

Most common questions on tax and financial implications

1. Will I pay tax if I receive money for my share of a house?
If it is income that would be exempt from income tax upon the sale of real estate (e.g., meeting the holding-period time test or use for one’s own housing), then the income from the co-ownership settlement will most likely also be exempt. However, if the income exceeds the acquisition cost of the share and the conditions for exemption are not met, the difference may be taxed as “other income”. If the property is rented out or you use it for business purposes, income tax may apply. You should ask the Czech tax authority (Financial Administration) or arrange a consultation with a tax advisor; our attorneys in Prague at ARROWS also work with tax specialists.

2. Can I deduct legal costs in the proceedings?
As a rule, not for individuals’ personal taxes – a taxpayer cannot usually deduct legal costs of a civil dispute. However, if it is part of your business activity (e.g., a dispute over business assets), the situation may differ and the costs could be tax-deductible. 

3. What will be the impact on me if I take over the house and also take over the mortgage?
If you take over the house and also assume the mortgage (which the bank must approve), you must repay the mortgage yourself. This is your obligation to the bank, not to the other co-owner. You should be sure you can afford the mortgage. 

Alternatives to court proceedings

Before resorting to a lawsuit, you should seriously consider other options.

Out-of-court agreement – the simplest and cheapest route. If you agree with the co-owner that one of you will receive the house and the other a certain amount of money, you can arrange this by agreement without going to court. The agreement must be in writing and must include the terms of the settlement method. Once the agreement is concluded and registered in the Czech Cadastral Register (Land Registry), the matter is done. This takes weeks, not years. Our attorneys in Prague at ARROWS will help you reach a fair agreement and ensure it is drafted correctly from a legal perspective.

Mediation – if you cannot talk to each other but are not outright enemies, mediation can help. A mediator is a neutral person who helps you find a common solution. It is cheaper than court and usually takes weeks rather than years. In many cases, mediation leads to a result.

Arbitration – a rarer option, but sometimes the parties agree that instead of a state court, the matter will be decided by an arbitrator (a private decision-maker). This is also faster.

Our attorneys in Prague at ARROWS will help you consider which of these routes is best for you.

Final summary

Termination of co-ownership of real estate by a Czech court is a complex legal process that takes years and costs tens of thousands of Czech crowns. The court proceeds under strict rules of law, which include three possible methods of settlement – physical division of the property, awarding it to one party with compensation, or sale by auction.

For entrepreneurs and asset owners, this is an important message: if you do not want to suffer uncertainty, incur significant financial costs, and experience emotional exhaustion, you should try to reach an agreement with the other co-owner. No matter how strained your relationship is, an agreement is always cheaper and faster.

However, if an agreement cannot be reached, our attorneys in Prague at ARROWS will ensure that the court proceedings run as efficiently as possible. We will review all legal arguments, arrange objective valuation of the property, negotiate all procedural issues, and keep you informed on an ongoing basis. We know how Czech courts decide in such matters, and we know which arguments are persuasive.

If you are currently in a co-ownership arrangement and want to separate, do not postpone the decision. The longer you wait, the more complicated the situation will become. Contact our attorneys in Prague at ARROWS – we will assess your situation, explain all options, and help you choose the best path.

Contact us at office@arws.cz – we will be happy to answer all your questions and prepare a legal strategy that will get you out of this problem as quickly and cost-effectively as possible.

FAQ - Most common questions on termination of co-ownership of real estate by a Czech court

1. I am one of four heirs to a house – can I file a lawsuit to terminate co-ownership on my own, or do all of us have to sign?
Yes, you can file it on your own. You do not need the consent of the other co-owners to file the claim. All other co-owners will become parties to the proceedings. Our attorneys in Prague at ARROWS will help you formulate the claim so that it is legally correct and contains all necessary details – office@arws.cz.

2. How long should I expect to wait for my share to be settled? Can I live in the house in the meantime?
Typically, you should expect 2–4 years; longer in complicated cases. During the proceedings, you should remain in the house if you live there – no one can evict you merely because the proceedings are ongoing. 

3. What happens if I simply don’t know where the other co-owner is, or they resist being involved in the proceedings?
If you cannot locate the other co-owner, the court may order so-called substitute service – e.g., service by public notice or a newspaper advertisement. If the other party resists and does not attend hearings, the court may decide even without their presence, provided the procedural requirements are met. Our attorneys in Prague at ARROWS will ensure that all procedural steps are completed correctly.

4. Do I have to hire a lawyer, or can I file the lawsuit myself?
Theoretically, you can file it yourself, but we strongly do not recommend it. Non-lawyers often make formal mistakes, which the court penalizes through delays or by requiring additional submissions. Given the specifics of proceedings for the termination and settlement of co-ownership under Czech law, professional legal assistance is very important. 

5. What happens to the mortgage secured on the house?
If there is a joint mortgage on the house for both co-owners, the bank must approve that only one of you takes it over. This usually means the other person must be released from the mortgage and the bank will transfer the obligation to one person.

6. Can I get the house and pay the other person nothing?
That depends on how the court views the matter and what share you hold. The court must ensure a fair settlement, which usually means the other party must receive the equivalent of their share in money if an actual division is not possible. For example, if you have a large share (e.g., 80%) and the other person a small share (20%), the calculated compensation will correspond to that ratio. 

Notice: The information contained in this article is of a general informational nature only and is intended to provide basic guidance based on the legal situation as of 2026. Although we take the utmost care to ensure accuracy, legal regulations and their interpretation evolve over time. We are ARROWS advokátní kancelář, an entity registered with the Czech Bar Association (our supervisory authority), and for maximum client protection we are insured for professional liability with a limit of CZK 400,000,000. To verify the current wording of regulations and their application to your specific situation, it is necessary to contact ARROWS advokátní kancelář directly (office@arws.cz). We accept no liability for any damages arising from the independent use of the information in this article without prior individual legal consultation.

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