An auction takes place when an undivided interest can no longer be resolved in any other way: the co-owners cannot agree on how to divide the property, the property is not suitable for division in kind, or one of the co-owners refuses to buy out the others. The property must then be converted into cash in order to be divided. The sale is carried out by auction, by decision of the court, using a procedure that combines the rules of the Civil Code, the rules of the Code of Civil Procedure and the tax rules specific to the nature of the transaction.<\/p>\n
This guide is designed for litigants who want to understand how to get out of a deadlocked joint ownership situation, and for lawyers who are looking for an up-to-date reference tool, including the judgment in Cass. 1st civ., 5 February 2025, no. 21-15.932<\/a>, In this issue, we look at the conditions, the step-by-step procedure, the comparative taxation of the two forms of auction, the effects of the auction and the pitfalls encountered in practice. We cover the conditions, the step-by-step procedure, the comparative taxation of the two forms of auction, the effects of the auction and the pitfalls encountered in practice.<\/p>\n An auction is the sale by auction of a property owned jointly by several people, ordered when division in kind is not possible or not desirable. The auction price is then substituted for the property in the estate to be divided, making it possible to distribute the value in cash. The operation is as old as indivision itself, and its rules are set out both in Title VI of Book III of the Civil Code (articles 1686 to 1688), which lays down the basic principles, and in the Code of Civil Procedure (articles 1377 to 1378), which organises the procedure.<\/p>\n The starting point is the\u2019article 815 of the Civil Code<\/a>, It enshrines the right of each undivided co-owner to demand partition at any time. This right is a matter of public policy: no clause in a will or contract can permanently prevent it. Only a fixed-term indivision agreement (maximum five years, renewable, art. 1873-3 Cc) or a judicial stay can defer the exercise of this right.<\/p>\n \u00abNo one may be compelled to remain in joint ownership and partition may always be brought about, unless it has been suspended by judgment or agreement.\u00bb<\/p>\n<\/p><\/div>\n Partition may be amicable (a notarial deed signed by all the joint owners) or judicial (ordered by the court when agreement is lacking). It may take the form of a division in kind, with the allocation of material lots, or a preferential allocation, or even, when the two previous options are impracticable, an auction. The hierarchy is clear: an auction is a subsidiary outcome, and the Cour de cassation has been pointing this out for fifty years. In a judgment of 28 June 1972 (no. 71-12.571), it had already stated that \u00abpartition is always preferable to auction, especially if it keeps the property in the family\u00bb. This rule of subsidiarity gives structure to the whole matter.<\/p>\n The civil basis of the licitation can be found in the\u2019article 1686 of the Civil Code<\/a>, The first is that the joint property cannot be divided conveniently and without loss, and the second is that, in an amicable division, a lot cannot be sold by the co-sharers. In both cases, the sale by auction becomes the liquidation mechanism.<\/p>\n \u00abIf something common to many cannot be shared conveniently and without loss ;<\/p>\n Or if, in a partition made by mutual agreement of common property, there are some that none of the co-partitioners is able or willing to take,<\/p>\n The sale is by auction, and the price is shared between the co-owners.\u00bb<\/p>\n<\/p><\/div>\n The real conceptual difficulty lies in the fact that the same transaction can be given two radically different legal classifications. If the successful bidder is an original joint owner (or one of the relatives listed in article 750 II of the General Tax Code: spouse, ascendant, descendant, universal beneficiary), the auction is deemed to be a partition: it benefits from the declaratory effect of article 883 Cc and from the reduced taxation of partition duty. If the successful bidder is a third party, the transaction is a sale pure and simple, subject to transfer duties at the full rate. It is this bifurcation, decided at the drop of a hammer, that makes the auction so formidable to recommend.<\/p>\n Lastly, a distinction must be made between an auction, which relates to the property itself, and the transfer of undivided rights to a third party, which relates to the abstract share of an undivided co-owner and is governed by the law of the\u2019article 815-14 of the Civil Code<\/a>. The confusion is common in popularised literature: the right of pre-emption under article 815-14 applies only to the latter, never to the former. We will come back to this later.<\/p>\n There is also a distinction between amicable and judicial sales. An amicable sale assumes that all the undivided co-owners agree on the principle of the sale: it then takes the form of a notarial deed and publicity is organised freely by the notary. By contrast, a judicial auction is the result of a judgment handed down by virtue of a decree opening the division proceedings: it is necessary when agreement is lacking. Both types of auction - amicable and judicial - are subject to the same tax regime, depending on the status of the successful bidder, but their procedural routes are completely different. In the case of an estate, an out-of-court estate sale may be sufficient to quickly bring an indivision between consenting heirs to a close; a judicial sale, on the other hand, is used in cases where the indivision is blocked - i.e. where a judgement is required to end the indivision.<\/p>\n Lastly, there is a special type of sale, known as a compulsory sale: this refers to a sale ordered on the initiative of a creditor on the basis of article 815-17 paragraph 3 of the Civil Code (we come back to this in the section on the relationship with other procedures). The proceeds of the sale are then substituted for the property in the partitionable estate, and the creditor is paid out of his debtor's share after distribution.<\/p>\n The court does not order an auction because it is asked to do so: it must check that it is legally possible and practically necessary. This dual requirement was formalised particularly clearly by the First Civil Chamber of the Cour de Cassation in a decision dated 5 February 2025, which quashed a decision of the Lyon Court of Appeal for having ordered an auction without having verified that the property could be conveniently divided.<\/p>\n \u00abPursuant to article 1377, paragraph 1, of the Code of Civil Procedure, it is the responsibility of the judge hearing an application for the sale by auction of undivided property to ascertain, if necessary of his own motion, whether or not the property is readily divisible in kind.\u00bb<\/p>\n Ruling published in the Bulletin. It is not enough simply to note a disagreement between the joint owners: the judge must justify his order by demonstrating that the property cannot be divided in kind without loss of value.<\/p>\n<\/p><\/div>\n The practical significance of this ruling is considerable. Before 2025, a lawyer could hope to obtain an auction by proving that there was no agreement between co-owners. This is no longer sufficient. It is now necessary to document, in the writ of summons and throughout the proceedings, that the property itself is resistant to division: appraisal of value, study of the technical feasibility of division, notary's notes on the impossibility of composing balanced lots, any element capable of fuelling the judge's reasoning. Lawyers who continue to plead the mere disagreement expose their application to a clear rejection.<\/p>\n Over time, case law has clarified the concept of the practical impossibility of partition. It is material when the property is indivisible by nature (a single house, a flat, a single business). It is economic when division is technically possible but would deprive the lots of any usefulness or value: in a ruling of 11 June 1985 (no. 84-12.325), the Cour de cassation upheld the refusal of a division in kind on the grounds that division would deprive the lots of \u00abany useful occupation and would only give a value in principle that is not very negotiable\u00bb. In the case of exceptional properties - historic residences, ch\u00e2teaux, prestige properties - a judgment of 13 October 1998 (no. 96-15.256) confirms that a global auction may be preferred because the entire value exceeds the sum of the allotted values.<\/p>\n The procedural requirements are set out in the\u2019article 1360 of the Code of Civil Procedure<\/a> The summons for partition must, on pain of inadmissibility, briefly describe the assets to be partitioned, state the claimant's intentions as to the division and justify the amicable steps taken. This last point is not a decorative one. The judge will quite easily sanction its absence when the claimant has not been able to produce a single written exchange with the other joint owners. There is one important nuance: the provisions of article 1360 do not apply to a personal creditor who brings an action for partition under article 815-17 paragraph 3 of the Civil Code. As the Court of Cassation ruled in a judgment of 13 January 2016 (no. 14-29.534), the creditor's action has its own rules, which are not the same as an action oblique and require neither amicable proceedings nor a description of the property.<\/p>\n The procedure is long, sequenced and governed by a series of steps that can take months, sometimes years. From the first meeting with the notary to the actual payment of the price, it takes between twelve and eighteen months for the judgement phase for an uncontested case, and a further two to four months for the auction phase itself. Complex cases can easily take more than two years.<\/p>\n The summons is drawn up and served by a lawyer. In principle, it refers the matter to the judicial court of the place where the succession was opened if the joint ownership is inherited, or to the family court (juge aux affaires familiales) if the joint ownership results from the liquidation of a matrimonial property regime or a PACS. In the case of cohabitation, jurisdiction was until recently vested in the judicial court sitting in ordinary session, and the family court judge (JAF) had no jurisdiction. Law no. 2026-248 of 7 April 2026 amended the Code of Civil Procedure.\u2019article 840 of the Civil Code<\/a> to expressly extend the scope of judicial division to indivisions between cohabitees: the division of jurisdiction between the Family Court and the Court of First Instance for these situations must now be verified on a case-by-case basis, in the light of the Code of Judicial Organisation.<\/p>\n The compulsory information - a brief description of the assets, the claimant's intentions, the steps taken to reach an amicable settlement - must be carefully drafted. Experience shows that a judge may automatically find that no amicable steps have been taken if the file contains no trace of any attempt at negotiation. In a deteriorated family undivided ownership situation, it is essential to attach the formal notice emails, notarial meeting minutes, purchase offers sent to the co-owner, and even certificates of failed mediation.<\/p>\n When the court receives an application for partition, it does not immediately order the auction. It begins by opening the accounts, liquidation and partition operations and appoints a commissioned notary to conduct the operations. Only after the notary has drawn up a draft liquidation statement - and reported any difficulties - can the court order the auction if the conditions are met. This two-stage procedure is important, as it avoids premature sales and gives the notary a chance to find a conciliatory solution.<\/p>\n The judge appointed to supervise operations, provided for in article 1371 of the CPC, may be called upon to settle any difficulties that arise: disagreement over the valuation of an asset, refusal to produce a document, dispute over a right. In the most contentious cases, it is used as a mini-judge of the status of the case, enabling situations to be resolved without waiting for the judgment on the merits.<\/p>\n The terms and conditions of sale are the key document in the auction. It is drawn up by the lawyer in charge of the case and contains: the origin of ownership, the cadastral designation of the property, the status of registrations (mortgages, liens), encumbrances (easements, leases), payment terms, the upset price and auction procedures. A poorly drafted document that omits a lease or easement can scupper the sale or lead to subsequent litigation on the grounds of lack of consent on the part of the winning bidder. The quality of the drafting of this document is often underestimated.<\/p>\n Advertising is governed by rules that are similar to those for property seizures: publication in a legal gazette, posting at the local town hall and court, and announcements on platforms dedicated to judicial sales. Visits are organised during the month preceding the auction. The quality of this advertising largely determines the number of bidders present on the day, and therefore the final price.<\/p>\n The hearing is held in the auction room of the judicial court or, by decision, before the appointed notary. Bids are placed exclusively by lawyers. The starting price is announced, the bids are placed in stages, and the auction is declared in favour of the last bidder, on the third blow of the candle or procedural equivalent. L\u2019article 1378 of the Code of Civil Procedure<\/a> provides for an important option: if all the undivided co-owners are capable and present or represented, they may unanimously decide that the auction will take place among themselves, to the exclusion of third parties. In the absence of unanimous agreement, third parties are always admitted.<\/p>\n This option is not anecdotal. It allows a family that wants to keep the property - an inherited holiday home, an heirloom - to organise an auction behind closed doors between co-heirs, without exposing the property to the appetite of outside investors. Above all, by virtue of article 750 II of the CGI (French General Tax Code), it allows the property to remain under the tax regime for sharing (2.50 % on the value) rather than falling under that for sale (5.81 %). Negotiation of this point very early in the procedure is often decisive for the outcome.<\/p>\n The hammer does not end the sale. The successful bidder must pay the price - to the Caisse des D\u00e9p\u00f4ts or to the appointed notary - within the period specified in the terms and conditions, generally forty-five to sixty days. The winning bidder must then publish the judgement of sale at the land registry to make his right enforceable against third parties and to purge all registrations.<\/p>\n In the case of seizures of immovable property, the \u00absurench\u00e8re du dixi\u00e8me\u00bb mechanism allows any serious bidder to raise the bid by 10 % within ten days of the auction, thereby re-launching the sale. In matters of auction, its application remains debated: the citation of article 1377 CPC refers to articles 1271 to 1281 CPC for immovables, not to articles L. 322-7 and R. 322-49 of the Code of Civil Enforcement Procedures, which govern the higher bid for seizure. The cautious lawyer will check, on a case-by-case basis, the rules applicable to the sale as set out in his booklet. We discuss this point in the section entitled \"Practical pitfalls\".<\/p>\n The co-owners' right of pre-emption is often misrepresented as a mechanism to protect against sale by auction. In reality, it protects against the transfer of undivided rights to a third party. The difference is fundamental and deserves to be emphasised, because confusion can lead undivided co-owners to believe that they have leverage where they do not.<\/p>\n \u00abAn undivided co-owner who intends to transfer, for valuable consideration, all or part of his rights in undivided property to a person outside the joint ownership (...) must notify the other undivided co-owners of the price and conditions of the proposed transfer by extrajudicial act (...). Any undivided co-owner may, within one month of such notification, inform the transferor, by extrajudicial act, that he or she is exercising a right of pre-emption at the price and conditions notified to him or her\u00bb.\u00bb<\/p>\n Pre-emption period: 1 month. Deadline for completion of the deed after pre-emption: 2 months.<\/p>\n<\/p><\/div>\n This right applies when an undivided co-owner decides to sell his abstract share - for example, when he finds an investor willing to buy his rights in an undivided estate. The other undivided co-owners then have one month to take the place of the buyer. In a judicial auction, on the other hand, the transaction concerns the entire property, not a share: article 815-14 does not apply. The equivalent protective mechanism is that of article 1378 CPC, i.e. the possibility for the undivided co-owners who are capable and present to decide unanimously that the auction will be held between them. This is not an individual right - it is a collective decision that presupposes the agreement of all.<\/p>\n The tax treatment of the auction often decides whether or not the transaction is appropriate. Two systems coexist, and the transition from one to the other depends on the identity of the successful bidder - a detail that is not always easy to check when the hammer is dropped. The following table summarises the two systems.<\/p>\nDefinition and legal basis<\/h2>\n
When an auction is necessary: the conditions<\/h2>\n
The judicial auction procedure<\/h2>\n
\n
Summons to share before the court<\/h3>\n
The judge's order and the appointment of the notary<\/h3>\n
Terms and conditions of sale and advertising<\/h3>\n
The adjudication hearing<\/h3>\n
After the auction: higher bids, service, transfer of ownership<\/h3>\n
Right of pre-emption of co-owners<\/h2>\n
Taxation: share-licensing vs. sale-licensing<\/h2>\n