When someone owes you money, their assets are your collateral. You have the right to resort to seizures to obtain payment of your debt. But what happens when your debtor does not own his assets outright, but in joint ownership with other people, for example as the result of an inheritance or a joint purchase? The situation then becomes significantly more complex. French law protects the coherence of joint ownership by laying down a strict principle: the personal creditors of a joint owner are prohibited from seizing his or her share of the joint ownership rights. This rule highlights a essential legal distinction between joint-ownership creditors and the personal creditors of joint-ownerswhich do not have the same prerogatives. This article details the basis and scope of this limitation, as well as the remedies available to creditors to recover their debt.
The principle of prohibiting seizure of undivided shares: legal basis
The position under French law is clear: a personal creditor may not initiate direct attachment proceedings against the rights that his debtor holds in a joint ownership arrangement. This prohibition, far from being arbitrary, is based on solid legal foundations designed to preserve the very nature of joint ownership.
The logic behind prohibition (indeterminacy of the pledge, uncertainties of sharing)
The main reason for this prohibition is the very nature of undivided rights. Prior to partition, the right of each co-owner does not relate to a physically identifiable asset or fraction of an asset, but to an abstract share of the entire undivided estate. The creditor's pledge is therefore indeterminate. It is impossible to know on which concrete property the seizure could be exercised. For example, if a joint ownership arrangement covers two flats, a joint owner with 50 % of the rights does not own one of the two flats, but half of each flat.
What's more, the fate of these rights is suspended until after the partition. Only then will each joint owner be allocated specific assets. A creditor who seizes a share of rights in a building will see his seizure annulled if, at the end of the partition, the building is ultimately allocated to another co-owner. This major risk makes the seizure of undivided rights impracticable and justifies its prohibition in order to protect both the other undivided co-owners and potential purchasers of these rights.
Article 815-17 of the Civil Code: a key text
This principle is explicitly stated in Article 815-17, paragraph 2, of the Civil Code, which provides that "The personal creditors of an undivided co-owner may not seize his share in the undivided property, whether movable or immovable".. This text is the cornerstone of the protection of joint ownership against individual actions by the creditors of just one of its members. It forces these creditors to take another route to recover their debts: the action for partition.
Scope of the prohibition: which creditors and which assets are affected?
The prohibition laid down by the Civil Code is general in scope. It is not limited to a certain type of creditor or property, but is intended to cover all situations where a personal creditor would seek to act directly on the undivided assets.
Unsecured creditors and personal mortgages
The prohibition on seizure applies to all the undivided co-owner's personal creditors, without distinction. It applies both to unsecured creditors, i.e. those who have no specific security, and to creditors who have taken care to provide themselves with security. For example, even a creditor who holds a judicial mortgage over his debtor's undivided share cannot seize these rights in order to sell them. His guarantee gives him a preferential right to the sale price, but only if the sale takes place, typically after a division.
Undivided movable and immovable property
The prohibition covers all the assets making up the undivided estate. Article 815-17 of the Civil Code specifies that it applies to both movable property (a portfolio of securities, furniture, vehicles) and immovable property (a flat, a house, land). No asset held in joint ownership may be seized by the personal creditor of a co-owner. This specific protection for joint property is in addition to the more general list of other categories of unseizable assets and income under French law.
Exceptions to the prohibition: when is seizure possible?
There is one important exception to this principle. When all the co-owners are jointly and severally indebted to the same creditor, the latter is considered to be a creditor of the joint ownership. The Court of Cassation has ruled that in such cases the creditor may pursue the seizure and sale of the undivided property without first having to bring about partition (Cass. 1re civ., 6 Nov. 2001, no. 98-20.518). This situation arises, for example, when cohabitees who are undivided owners of a property are joint borrowers of a loan.
Distinction between sequestration and provisional judicial mortgage
Faced with the impossibility of levying execution, the creditor might be tempted to turn to precautionary measures to 'freeze' his debtor's rights pending partition. However, the law makes a subtle but fundamental distinction here between a protective attachment, which is prohibited, and the registration of a judicial security, which is authorised.
Why seizure of undivided rights is prohibited
A protective attachment is a measure designed to render an asset unavailable with a view to a future seizure and sale. Its purpose is to prevent the debtor from disposing of the property. However, since the purpose, i.e. the seizure for sale of undivided rights, is prohibited, so is the prelude to such execution. The Court of Cassation confirmed this logic when it ruled that a personal creditor cannot carry out a protective attachment on his debtor's share in an undivided interest (Cass. 2e civ., 4 Oct. 2001, no. 00-11.126). Nor can he take a measure that would have the effect of making that share unavailable, such as depositing the sale price of an undivided asset.
The legality of registering a provisional judicial mortgage: advantages and limitations
Unlike seizure, registration of a provisional judicial mortgage on the debtor's undivided share is permitted by case law. This measure does not render the property unavailable and therefore does not contravene the logic of joint ownership. It allows the creditor to take security, a sort of "ticket" that gives him a rank for the day when the property is divided up or sold. It generates a preferential right that will be exercised over the value of the property or over the balance that will effectively revert to the debtor after partition.
The advantage is therefore that you can position yourself against other creditors of the same debtor. There are, however, considerable limitations: the fate of this mortgage is totally subordinate to the outcome of the partition. If the property on which it is registered is allocated to a co-owner other than the debtor, the mortgage disappears purely and simply for lack of a basis. The provisional judicial mortgage thus forms part of the wider framework of judicial sureties, which offer a strategic alternative to seizures.
The only recourse: bring about the partition of the undivided interest
Since direct seizure of the undivided share is prohibited, the personal creditor has only one course of action if he hopes to recover his claim on the undivided property: force the exit of the undivided co-ownership. The law provides him with the tools to achieve this.
The oblique action mechanism for personal creditors
The creditor's main lever is the action oblique, provided for in article 1341-1 of the Civil Code. This mechanism enables a creditor to exercise the rights and actions of his debtor when the latter, by his negligence, jeopardises the rights of his creditor. In matters of joint ownership, article 815-17, paragraph 3, of the Civil Code makes a specific application: it expressly authorises personal creditors to "bring about partition in the name of their debtor".
In practical terms, the creditor takes legal action on behalf of the defaulting joint owner to ask the court to order the division of the joint ownership. This is often a long and complex process, but it is the only way to transform the debtor's abstract share into tangible, seizable assets or cash. This action for partition is particularly decisive when it comes to the seizure of an undivided propertywhere the financial stakes are often high.
Intervening in an ongoing sharing
If partition proceedings have already been initiated, either amicably or judicially, by one of the co-owners, the personal creditor may also intervene. Article 882 of the Civil Code allows the creditor to object to the division in order to monitor the proceedings and ensure that his debtor's rights are not prejudiced, for example by undervaluing his assets or recognising fictitious debts owed to other co-owners. This intervention guarantees the creditor that the assets reverting to his debtor will be correctly valued, thereby preserving his own pledge.
Penalties for unlawful seizure of undivided rights
Any attempt to circumvent the ban on seizure of undivided rights is severely punished. The legislator has provided clear remedies for debtors who are subject to such illegal procedures.
Nullity of the seizure
The principle sanction for a seizure made in breach of article 815-17, paragraph 2, of the Civil Code is nullity. The seizure is deemed never to have existed. The joint-owner debtor may apply to the enforcement judge to have this nullity declared and to have the seizure cancelled. This nullity is absolute and the judge has no discretion: he must cancel the seizure if it relates to undivided rights.
Possible remedies and damages
In addition to applying for the seizure to be lifted, an undivided co-owner whose rights have been wrongfully seized may seek compensation for the loss suffered. If the measure has, for example, blocked a transaction or damaged his credit, he is entitled to claim damages from the creditor at fault. This liability action is based on the abuse of seizure and is designed to compensate for the material or non-material damage caused by the unlawful procedure.
The complexity of the rules governing the seizure of undivided interests requires a strategic approach and in-depth knowledge of the procedures. Whether you are a creditor seeking to recover a debt or a co-owner faced with such a situation, the assistance of a lawyer specialising in enforcement procedures is essential if you are to assess your options and defend your rights effectively. Our firm is at your disposal to analyse your situation and provide you with support.
Sources
- Civil Code
- Code of civil procedure
- Code of civil enforcement procedures
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