How to end co-ownership of real estate and survive

Property co-owners or family members embroiled in years of conflict often reach an impasse: they cannot sell, rent out, improve or otherwise use a jointly owned plot, apartment or shop. Over time, the property becomes neglected and generates no financial return.
Every owner has the right to demand dissolution of co-ownership. This basic right is enshrined in the Land Law, and its exercise does not depend on the size of the owner’s share: owning any share is sufficient. Dissolution may be sought at any time, so the right does not become time-barred. When all owners agree, the procedure is simple and quick: the owner wishing to sell transfers the share to another owner or a third party. But what happens when some owners do not wish to end the co-ownership? 
Attorney Uri Shiloh, a founding partner at E. Shiloh & Co. specializing in real estate, explains:
Dissolving real-estate co-ownership at a time that does not suit everyone is often seen by one owner as unavoidable and by another as a financial threat. Yet it is difficult to persuade strangers or people in conflict to remain co-owners, even if doing so might benefit them financially in the future. Sometimes unwilling co-owners, such as divorcing spouses or business partners whose relationship has broken down, refuse to sell purely out of revenge. Alongside emotional disputes, there can be genuine disagreements about whether selling is worthwhile: one owner wants to retain the property while another wants to sell. Heirs may likewise disagree, with some seeking a sale and others opposing it.
Methods of ending co-ownership
As noted, co-ownership can be ended by agreement among all owners. Without agreement, any owner may ask the court to order its dissolution.
A basic principle is that regard must be had to the wish of some owners, even if they are not a majority, to remain co-owners with one another, and to the wishes of the remaining owners.
The Land Law provides several methods, the principal ones being these: where a building can be registered as a condominium, the ordinary route is to register it and allocate each owner one or more apartments according to their share. A second, preferred method is partition in kind, available only where the property can physically be divided, for example into two building plots. Each owner receives a proportional part. If the division is only approximate, the court will order equalization payments to bring the allotted shares into line with each owner’s original interest.
A third method is sale of the property and division of the proceeds. The court will order a sale where partition in kind is impossible or would cause substantial loss to most or all owners. A person seeking dissolution by sale to a third party must prove that the property cannot be partitioned in kind. Anyone claiming that physical division would cause significant losses bears the burden of proving that claim.
Where the property is a married couple’s home and minor children live there, a request by either spouse to dissolve co-ownership will usually result in sale being postponed for an interim period until the court is satisfied that suitable accommodation has been found for the children.
Which court hears a claim to end co-ownership?
A real-estate co-owner seeking dissolution must first check where the property rights are registered. For ownership or long-term leasehold rights, the claim must be filed in the Magistrates’ Court for the area where the property is situated and will be heard under the Land Law. Where dissolution arises from a family dispute, usually between blood relatives, the Family Court hears the claim.
When can dissolution of real-estate co-ownership be prevented?
Examples of situations in which the court will refuse a dissolution request include:

• The claimant seeks sale to a third party without proving that partition in kind is impossible.
• Bad faith — The right to dissolve co-ownership must be exercised in good faith, without abuse and without an intention to harm another owner.
• Property that cannot be divided — Some property cannot physically be partitioned, such as common parts of condominium buildings.
• An agreement restricting the right to dissolution exists — Under section 37 of the Land Law, a co-ownership agreement may restrict the right to dissolution. Nevertheless, after three years from signing, the court may order dissolution despite that condition if it considers this justified in the circumstances.