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In indivision, the bank can obtain the forced sale of the entire property if only one of the buyers does not reimburse what he owes. The co-owner who would have paid his share without resorting to a loan consequently sees it exposed to the risk of being seized and sold.
The purchases with several, in joint ownership, can sometimes reserve unpleasant surprises. This act is risky especially if one of the buyers has recourse to a loan to pay his share, recently observed the Court of Cassation *.
The lender has indeed a "Privilege", a mortgage, which gives him the entirety of the property as collateral and not only the part of his borrowing client. The undivided owner who would have paid his share without resorting to a loan consequently sees it exposed to the risk of being seized and sold if the borrowing co-owner does not reimburse what he owes.
The bank can obtain the forced sale of the entire property
A couple had bought a house in joint ownership and one of them had resorted to a bank loan. When this borrower could no longer pay his monthly payments, the other thought that the bank could not seize the property because his "Lender's privilege" only related to the proportion of the property belonging to his client. It was therefore necessary first to obtain the division of indivision, he argued, to sell then and finally seize the share that would be the borrower.
But even if the lender is the creditor of only one of the co-owners, his guarantee covers the entire building, the Court said, relying on the Civil Code. He can obtain the forced sale of this building without engaging a prior sharing procedure. It is equally irrelevant that the owners have divided property rights as bare ownership and usufruct.
This is due to the fact that indivision could only be created after the purchase financed by the bank and therefore after the implementation of the guarantee of the banker, explained the magistrates.
* Cass. Civ 1, 9.1.2019, W 17-27.411