Selling a Share in Jointly Owned Property in Russia: The Pre-Emptive Right of Co-Owners

A co-owner in Russia who wants to sell his share to an outsider must first offer it to the other co-owners. Article 250 of the Civil Code gives them the right to buy it first, at the same price and on the same terms, and it requires the seller to notify them in writing. They have one month from the notice for real estate and ten days for movable property, and a co-owner who was bypassed may sue within three months to take over the buyer's rights and obligations.

The rule affects apartments held in shares, houses with several owners and shares in commercial premises. It matters to sellers who want a clean sale, to buyers who want to avoid losing the property after the deal and to co-owners who want to protect their position. This guide explains the notice, the periods, the exceptions, the claim to transfer the buyer's position and the practical steps for each side.

What the Right Covers

When a co-owner sells his share to a person who is not a co-owner, the other co-owners can buy it at the price and on the terms offered to the outsider. The Article covers sales and also exchange. If the seller offers a better price to the outsider after the notice, the co-owners must be notified again.

The right belongs to co-owners of common shared property. It does not apply to sales at a public auction or to the sales of a share in common property of owners of separate premises or buildings that Article 259.2(2) describes. An auction of a co-owner's share without the consent of all co-owners is possible only where the law allows it, for example in enforcement under Article 255, and there the creditor first has to offer the debtor's share to the other co-owners at market value.

Because the Article speaks of sale and exchange, the right is generally held not to arise in other transfers, such as gifts or division of the property, nor when the share is sold to another co-owner. The seller should check which situation applies before assuming that notice is unnecessary.

The Notice

The seller must notify the other co-owners in writing of the intended sale, stating the price and the other terms. The Article does not require notarisation, although some parties use a notarial notice to have strong proof of delivery.

The commentary advises that the notice list the essential terms and a deadline for the reply. It should name the buyer's terms of payment, the object and any conditions. A vague notice may be treated as no notice, and the three-month claim period will then be counted later.

Send the notice to every co-owner by a method that proves delivery: registered mail with an inventory, a courier receipt or a delivery through a notary. Keep the proof of sending and of receipt. A co-owner who lives abroad should receive the notice at the address he gave, and if none is known, the seller should attempt the last known address and record all attempts.

Waiver and Sale to an Outsider

If all co-owners waive the right in writing, the seller may sell at once. Written waivers are the clean solution. If a co-owner does not respond within the period, the seller may sell to the outsider on the terms stated in the notice, not on better terms for the buyer.

The buyer should ask for the proof that the notice was sent and the waivers or the expiry of the periods. A buyer who skips this step bears the risk that a bypassed co-owner will claim the share.

The pre-emptive right cannot be assigned. A co-owner cannot sell his right to buy to a third party, and a notary or the registry will not accept such a transaction.

The Three-Month Claim

If the seller sells in breach of the right, any co-owner may sue within three months to have the rights and obligations of the buyer transferred to him. The commentary treats this period as strict and counts it from the time the co-owner knew or should have known of the sale.

The claimant must be ready to pay the price: he deposits the sum with the court's deposit account or shows that he has the money. A claim without readiness to pay is weak.

If the court grants the claim, the buyer loses the share and receives the price back. The buyer may then have a claim against the seller for the losses caused by the breach. This is why buyers insist on proper notice.

Co-Ownership of Apartments in Practice

Many apartments in Russia are owned in shares by relatives or former spouses. A sale of one share of an apartment is complicated because the buyer becomes a co-owner without a separate room, and the other owners may refuse to cooperate.

The better solution is often a sale of the whole apartment by all owners at the same time. Where that is impossible, the seller makes the offer under Article 250 and tries to agree with the other owners on the price. A co-owner who buys the share simplifies the structure of ownership.

Disputes about the use of the apartment and about the order of payment of utilities are separate and are decided under the general rules on common property.

Owners and Buyers Abroad

A co-owner who lives abroad should leave a representative with a power of attorney to receive notices and to make the decision to buy or waive. A power of attorney that covers the pre-emptive right expressly is more reliable than a general one.

A foreign buyer of a share in a Russian property should check the register, obtain the proof of notice and waiver and understand that the sale may be challenged for three months. If the buyer is cautious, he waits until the period expires or obtains written waivers.

Translations of the waivers and powers of attorney should be certified for use in the register.

Practical Steps

Seller: list all co-owners, send a written offer with the price and terms, wait for the period, collect waivers and sell on the same terms. Buyer: ask for the file with the notices and the waivers before paying. Co-owner: reply in writing within the period, show readiness to pay and, if the share was sold without notice, file within three months.

The attorney prepares notices and waivers, reviews transactions for compliance with Article 250 and represents parties in disputes on the transfer of the buyer's position. First review covers the register extract, the notice and the draft sale contract.

The main channel of communication with the attorney is email: attorneypetrova1@gmail.com.