It is increasingly common to find properties with multiple owners - resulting from inheritances, joint acquisitions or shares - a situation legally known as co-ownership.

How does Renting work? Learn how to proceed with important decisions and understand your rights as a shareholder. Even if each consort has equal rights over the property, its share may vary and by law important acts (such as leasing) always require the consent of all owners.

What is Co-ownership?

Co-ownership, or joint ownership, means that two or more people simultaneously hold property rights over the same asset, such as a house or a car. Co-ownership is regulated by Articles 1403 and following of the Portuguese Civil Code, with a classic example being a couple purchasing a property together, thus becoming co-owners of the whole.
The rights of co-owners regarding the common property are equal in nature—all may use, manage, and dispose of the asset—but their quantitative participation, called a share, may vary according to the contract or title. For example, one may hold 75% and the other 25%, but in the absence of specification, it is assumed both hold equal shares.
It’s important to note that each co-owner does not have rights to a specific physical part of the asset; instead, each holds an abstract fraction of the whole, with no exclusive rights over a defined part.  

Can one of the co-owners rent the property without the consent of the others?
The answer is no.

Each co-owner can act individually as follows:

- Use the common asset, provided this does not prevent other co-owners from using it and that the intended use is respected.

- Dispose of or encumber their own share, i.e., sell, donate, mortgage, or use it as collateral, regardless of the remaining co-owners.

- File legal actions against third parties to protect the common interest, such as through reclaiming or defending shared property.

(These actions may be performed individually, provided they do not harm the rights of other co-owners or the purpose of the asset).

Rental Legal Situation

Entering into a rental agreement is considered an administrative act over the common asset and requires unanimous approval from all co-owners.
- If only one owner acts alone, that contract is invalid, as it disposes of an asset not exclusively theirs.
- If a rental contract is signed without all owners’ approval, the others may go to court to declare the lease void, reclaim possession, claim compensation for loss of use, and request an accounting for received rents.
- If the tenant was unaware and acted in good faith, principles of good faith and trust may allow the contract to remain valid in specific circumstances.

And the rents?

Rents must be divided proportionally to each co-owner’s share. If the rental was agreed by all, the co-owner who signed must distribute the income according to the shares or any prior agreement.

Summary

Although co-owners individually have some rights over the common property, none of them can lease or sell the property alone. This requires the agreement of all.

In other words, before renting a co-owned property, it is essential to ensure that all owners are in agreement—preferably in writing. This avoids legal disputes, protects the rights of all parties, and provides security for the tenant.

If the intention is to sell a share of a co-owned property, in theory, each co-owner can sell their share of the property. However, this sale is subject to an important detail: the other owners have what is called a "right of first refusal." In other words, the other owners must be notified firsthand and simultaneously of the intention to sell the share and the sale price. If none of the co-owners wishes to purchase, the sale can then be made to a third party.