Article 495A of the Civil Code is used when co-owners reach a deadlock. This happens when property held in common cannot be used, divided, or managed because the co-owners do not agree. In such situations, the law allows the majority to ask the Court to order a sale so that the co-ownership comes to an end. The aim is therefore practical: to resolve a stalemate.
However, the scope of Article 495A is limited. Maltese case law has made it clear that this article cannot be used by one co-owner to buy the shares of the others. Its purpose is to allow the sale of the property, usually to third parties, and not to allow internal transfers between co-owners.
This point is clear from the case law. The Court of Appeal explained that many arguments raised by parties—especially about whether the price is fair or whether there is prejudice—miss the real issue. The real question is simple: can Article 495A be used so that one co-owner buys the shares of the others? Once the issue is put in this way, the answer given by the Court is clear.
The Court confirmed that for many years the same interpretation has been followed: Article 495A was not meant to allow one co-owner to buy out the others. This is supported by several judgments, including Helen Zammit et v Madeleine Muscat (Court of Appeal, 5 October 2018), Anthony magħruf bħala Lino Attard et v Jennifer Calleja (Court of Appeal, 8 July 2017), Busy Bee Estates Limited v Anthony sive Tony Formosa et (Court of Appeal, 25 November 2011), and Joseph Galea et nomine v Mary Ellis (Court of Appeal, 14 May 2010). All these cases follow the same approach.
The courts have explained that Article 495A is meant to allow the sale of property held in common, not to allow one co-owner to take over the shares of the others. A sale to third parties ends the co-ownership completely. But if one co-owner buys the shares of the others, the property stays within the same group, and only the balance between them changes. The law does not use Article 495A for that purpose.
Another important point is that Article 495A is considered exceptional. It allows the majority to impose a sale on the minority, which is not something the law normally allows. Because of this, the courts say that the article must be interpreted strictly and not extended beyond its purpose.
The Court also identified a practical and structural problem that would arise if co-owners were allowed to buy each other out under Article 495A. Where the buyer is one of the co-owners, there is an inherent conflict of interest. The co-owner who wishes to buy will try to pay the lowest price, while the others will try to obtain the highest price. This creates tension and raises concerns about fairness.
To be fair, one could argue that this problem could be solved if co-owners were allowed to match or exceed the best offer made by a third party. In that case, the market would still set the price, and the co-owner would simply take over the highest bid.
But it seems that the Court does not want this.
