The need to make a distribution of the usage could only arise in respect to co-owned real estates. Such a distribution is made by the means of conclusion a particular type of contract which is characterized by certain specific features.
What does a contract for distribution of usage of a real estate mean?
The contract for distribution of the usage of a real estate is a much cheaper, quicker and easier partial alternative to a partition contract. With a contract for distribution of usage, the co-owners of a real estate agree by themselves how to use the property.
For example – if you are co-owners of a 400 square meters land plot on which a two-storey house has been built, you could agree with your co-owner that you will use the eastern part of the land plot, together with the first floor of the building, and he will use the western part of the land plot, together with the second floor of the building.
IMPORTANT! Regardless of which part of the land plot the entrance is located, legally each owner can use it to access “his” part of the land plot and/or the building according to contract of distribution of usage. An additional entrance may be made by agreement of the parties, but it is not a mandatory condition for the conclusion of the contract for distribution of usage.
When does a contract for distribution of usage is concluded?
Usually, co-owners conclude a contract for distribution of usage when the partition of a real estate is not possible (whether for personal, financial, regulatory or other reasons) and at the same time the co-owners want to have certain separation between themselves and a certain autonomy in their joint ownership.
How does a contract for distribution of usage differ from a partition contract?
A partition contract has as its main effect the termination of co-ownership. Under it, each of the former co-owners receives a separate real estate (a separate land plot / regulated land plot or an architecturally and functionally separate floor / part a building) as his/her sole share.
In the case of a contract for distribution of usage, the co-ownership remains. The real estate retains its unitary documentary status with all its consequences, but on good faith and with a view to preserving good relations between themselves, the co-owners have determined in a spirit of mutual understanding which specific part of the real estate each of them will use.
Will the contract for distribution of usage be binding to my heirs?
The answer of this question is – no! The main characteristic of a contract for distribution of usage is that it is concluded with regard to the personality of the parties. This means that if two persons enter into such a contract and one of them dies, the contract does not automatically bind the heirs of the deceased person. If they wish, they may conclude a new contract for distribution of usage, which may contain the same or different clauses.
This rule also applies if one of the parties to the contract transfers its share of the real estate to a third party by sale, donation, exchange, etc. In this case, the new owner will not be bound by the contract concluded by his predecessor in title and will therefore not have to comply with the agreed distribution of usage.
The conclusion of a contract for distribution of usage involves the performance of certain preliminary procedures and the provision of a set of certain documents, as atty. Dilyan Kolev can provide you the necessary legal assistance to ensure that the contract will be fully compliant with the regulatory requirements.