Disclaimer: The following article provides general information about inheritance and partition of co-owned property under Philippine law. It is not legal advice. For specific concerns or situations, it is best to consult a qualified attorney.

Inheritance and Partition for Co-Owned Property in the Philippines

Co-ownership of property frequently arises in the Philippines when two or more persons inherit real or personal property from a deceased individual, or when property is purchased, donated, or acquired by multiple persons jointly. Understanding the legal framework on co-ownership, inheritance, and partition is crucial in safeguarding rights and ensuring proper distribution of the estate. This article provides a comprehensive overview of these concepts under Philippine law.

1. Definition of Co-Ownership

Under Article 484 of the Civil Code of the Philippines (Republic Act No. 386), there is co-ownership when the ownership of an undivided thing or right belongs to different persons, with each person holding an “ideal or abstract share” over the entire property. This means:

Each co-owner has a share in the whole property.
No specific physical portion of the property belongs exclusively to any single co-owner until partition.
Each co-owner can freely dispose of their ideal share, subject to the rights of the other co-owners.

2. General Rights and Obligations of Co-Owners

When property is co-owned, the law grants certain rights and imposes certain obligations, including:

Right to Use the Property
Each co-owner may use the property provided they do not prejudice the interest of other co-owners. No single co-owner can exclusively appropriate a physical portion without the others’ consent, unless through a mutually agreed arrangement.
Right to Alienate or Encumber One’s Share
Each co-owner can sell, donate, or encumber their undivided share in the co-owned property without needing the consent of other co-owners. However, they cannot unilaterally dispose of any specific physical portion of the property without a proper partition.
Obligation to Contribute to Taxes and Necessary Expenses
All co-owners share the burden of expenses for the preservation of the property, including payment of real property taxes, necessary repairs, maintenance costs, and other charges proportionate to their respective shares.
Right to Ask for Partition
No co-owner is obliged to remain in co-ownership indefinitely. Any co-owner can demand partition of the property at any time, subject to certain exceptions (e.g., indivisible property).

3. Inheritance and Co-Ownership

3.1. Transmission of Properties Upon Death

When a person dies (the decedent), all his or her properties (after settling debts and liabilities) transfer to the heirs. This often leads to co-ownership because heirs automatically become co-owners of the inherited property, each owning an undivided share.

Legal Basis: In Philippine law, succession is governed primarily by the Civil Code (Articles 774 to 1105). The decedent’s estate passes to the heirs—whether compulsory, legal, or testamentary—who then acquire co-ownership status over the entire estate if there is more than one heir.

3.2. Compulsory Heirs and Conjugal/Community Property

In cases of inheritance involving spouses, the regime of property relations affects which properties form part of the estate:

Under the Family Code, if the spouses are under the absolute community of property (the default regime for marriages after August 3, 1988, unless otherwise agreed), almost all property acquired during the marriage is community property. Upon death, one-half belongs to the surviving spouse, and the other half is inherited by the heirs.
If the regime is the conjugal partnership (for marriages before the Family Code or if so stipulated), properties considered conjugal are owned jointly by spouses but remain separate from exclusive properties of each spouse.

Once the decedent’s net share in the conjugal or community property is determined, the heirs become co-owners of that share. The surviving spouse retains ownership of their share and simultaneously becomes a co-owner with the heirs over the inherited share.

4. Partition of Co-Owned Property

Partition is the process by which co-owners terminate their co-ownership by physically or otherwise separating and assigning each co-owner’s share. Partition becomes especially relevant in inheritance situations when heirs want to divide or dispose of the property.

4.1. Extrajudicial Partition

Extrajudicial settlement or partition is allowed when:

The decedent left no will, or if there is a will, the will has been probated or all heirs agree to follow it.
The heirs are all of legal age, or the minors are represented by legal guardians.
The heirs agree on how to divide the property without any dispute.

The procedure for an extrajudicial settlement (under Rule 74 of the Rules of Court) generally involves:

Execution of a Settlement Agreement: All heirs sign a deed of extrajudicial settlement or partition indicating how they have agreed to divide the estate.
Publication Requirement: The agreement must be published in a newspaper of general circulation once a week for three consecutive weeks.
Payment of Estate Tax: The Bureau of Internal Revenue (BIR) requires the filing of the estate tax return and the payment of estate taxes before issuing a Certificate Authorizing Registration (CAR).
Registration: Once the CAR is issued, the deed can be registered with the Register of Deeds for real properties, and new titles can be issued in the names of the individual heirs or co-owners.

Key Point: Extrajudicial partition is faster and typically less expensive than a judicial proceeding, provided there is no controversy among heirs.

4.2. Judicial Partition

If the heirs cannot agree on how to divide the property, or if there is a dispute as to the shares, authenticity of a will, or rightful heirs, then judicial partition is necessary. This typically occurs through probate or intestate proceedings in court, where the judge will:

Determine the heirs and the legitimacy of any wills.
Ascertain the assets and liabilities of the estate.
Adjudge the shares of each heir.
Issue a decision or order directing the partition of properties.

After the decision becomes final, a commissioner or an appointed person may be tasked with conducting the partition. If the property cannot be partitioned physically (i.e., it is indivisible without damage or loss of value), the court may order its sale and the proceeds will be distributed proportionally among the heirs.

5. Special Considerations

5.1. Indivisibility of Certain Properties

Some properties may be by nature or by law indivisible (e.g., small parcels of land that cannot be subdivided without rendering them useless, or certain cultural or historical properties). If the property is indivisible, co-owners typically agree on:

Sale and Distribution of Proceeds: Sell the property and split the proceeds according to their shares.
Allocation: Allocate the property entirely to one heir who indemnifies the others in cash.
Continuation of Co-Ownership: They may agree to remain co-owners for a specified period, if allowed by law.

5.2. Improvements and Reimbursements

When one co-owner spends for necessary improvements, repairs, or even valuable additions to the co-owned property, they may be entitled to reimbursement from the other co-owners, subject to lawful proof of expenses and benefits to the property.

5.3. Prescription of Actions

Although a co-owner generally cannot acquire ownership of the shares of other co-owners through adverse possession (prescription) while recognizing the co-ownership, special circumstances—such as open, continuous, exclusive, and notorious repudiation of the co-ownership—can start prescription running against the other co-owners. Thus, heirs who sleep on their rights risk losing their claims if a co-owner openly repudiates the co-ownership and fulfills legal requirements for adverse possession.

5.4. Rights of Creditors

Creditors of a co-owner may pursue only the ideal shares of the debtor co-owner. They cannot foreclose on specific portions of the real property without going through the proper judicial process that identifies or separates the debtor’s share.

6. Practical Steps in Handling Inherited Co-Owned Properties

Identify All Heirs and Their Respective Shares
Confirm that all heirs have been accounted for. Determine the share of each compulsory heir under the Civil Code, or as stipulated in a valid will.
Secure Documents
- Death Certificate of the decedent
- Certificate of No Marriage (CENOMAR) or Marriage Certificate of the decedent (if married)
- Titles, tax declarations, or other ownership documents of the properties involved
- Other relevant certificates or documents confirming the estate’s assets and liabilities
Check Estate Obligations
The estate must settle debts, funeral expenses, and other obligations, including estate tax with the BIR.
Discuss the Mode of Settlement
- If there is no dispute, a deed of extrajudicial settlement or partition may be drawn up.
- If there is a dispute or a will that must be probated, proceed to judicial settlement.
Settle the Estate Tax
File the Estate Tax Return within the prescribed period (usually one year from the decedent’s death, subject to extensions or changes in law). Pay estate taxes or penalties if any.
Register the Partition Documents
After obtaining the Certificate Authorizing Registration (CAR) from the BIR, register the documents (e.g., extrajudicial settlement) with the Register of Deeds for real property, or relevant government agencies for personal property (if required).
Issuance of New Titles
Once registration is completed, the heirs may receive new certificates of title in accordance with their shares.

7. Common Pitfalls and Tips

Failure to Include All Heirs
Missing or ignoring the rights of even one rightful heir can invalidate the entire settlement. Ensure that all heirs are included and have given their consent.
Non-Payment of Estate Tax
Transfer of titles and registration generally cannot proceed without clearing the estate tax obligations first. Delays can incur penalties and surcharges.
Undisclosed Property or Debts
Heirs should conduct thorough inventory checks and background investigations to ensure all properties and liabilities are included in the settlement.
Improper Publication
If using extrajudicial partition, the law requires publication in a newspaper of general circulation for three consecutive weeks. Failure to comply may render the partition void as to third persons.
Boundary Disputes or Overlaps
Real property often faces boundary or overlap issues. A licensed geodetic engineer’s survey is crucial to avoid future disputes.
Seeking Professional Assistance
Legal complexities arise especially when dealing with multiple properties, contested wills, or complicated family structures. Consult a lawyer for guidance on probate, partition, and property transfers.

8. Relevant Legal Provisions

Civil Code of the Philippines (Republic Act No. 386)
- Articles 484–501 (Co-Ownership)
- Articles 774–1105 (Succession)
- Articles 1078–1105 (Partition and Distribution of the Estate)
Family Code of the Philippines (Executive Order No. 209)
- Provisions on property relations of spouses (Absolute Community, Conjugal Partnership, Complete Separation of Property, etc.)
Rules of Court
- Rule 74 (Extrajudicial Settlement of Estate)
- Rule 73 (Venue and Process of Settlement of Estate)
- Rule 90 (Distribution and Partition of the Estate)
Bureau of Internal Revenue Regulations
- Pertaining to Estate Tax (Filing, Rates, Exemptions, Penalties)

9. Conclusion

In the Philippines, co-ownership of inherited property is common, and understanding the interplay of inheritance laws, co-ownership principles, and partition procedures is vital to protect one’s rights. Whether heirs settle the estate extrajudicially or proceed with a judicial partition, compliance with legal requirements—particularly paying estate taxes, involving all heirs, and publishing the partition (if required)—is essential. By adhering to these legal guidelines and seeking professional advice when necessary, heirs can ensure a smooth and fair distribution of the decedent’s property, avoid prolonged disputes, and safeguard their interests.

Note: Laws and regulations can change over time. Always confirm that you are following the latest legal requirements and procedures. For specific advice, particularly where there are contested matters or large estates, consult a qualified Philippine lawyer.