The Estate and Co-Ownership Among Heirs in Puerto Rico

When a father, a mother or a spouse dies, the family is often left with very practical questions: who pays the CRIM property tax this year? Can we rent out the house? What if one of the siblings lives there? The answer starts with understanding two ideas: the sucesión (the estate / the group of heirs) and the comunidad hereditaria (co-ownership among heirs).

What happens at the moment of death

The estate opens at the exact moment of death (Art. 1547 of the Código Civil de Puerto Rico de 2020, the 2020 Civil Code). From that instant, the rights and obligations of the causante (the person who died) pass to those called to inherit by law or by the will.

There is a transition period the Code calls the herencia yacente (the unclaimed estate): the time from the death until the heirs accept the inheritance (Art. 1562). Meanwhile, the estate is managed by:

1. the person the causante designated;
2. if no one was designated, the albacea (executor, the person named in the will to carry it out);
3. if there is no executor either, the people called to inherit themselves;
4. and if they cannot agree, a provisional administrator appointed by the court (Art. 1563).

Whoever manages at this stage must preserve the property. They can make necessary repairs, but useful improvements require court authorization (Art. 1564).

When the heirs accept, the acceptance takes effect retroactively to the day of the death (Art. 1572). If you want to know how to accept or refuse an inheritance, see accepting or refusing an inheritance.

What co-ownership among heirs is

When there is more than one heir, they all own the entire estate together. The Code calls this the comunidad hereditaria: several people with rights in the estate "expressed in abstract shares" (Art. 1599).

What does "abstract share" mean? That if three siblings inherit in equal parts, each one owns one third of everything, not the house for one, the car for another and the bank account for the third. No one is the exclusive owner of a specific asset until the partición (division of the estate) takes place, which is the actual distribution and assignment of the assets. We explain it in dividing the estate.

Some basic rules of co-ownership among heirs:

• It is not a legal entity (Art. 1600). It cannot open accounts or sign contracts on its own; the heirs or an administrator act for it.
• Each heir can sell their share without the others' permission, but specific assets can only be sold with everyone's consent (Art. 1604).
• Right of first refusal: if an heir wants to sell their share to an outsider, the others have 30 days to buy it first (Art. 1605).
• Any heir can ask for the division at any time (Art. 1775). The heirs can agree not to divide for up to 4 years, which can be extended with new agreements (Art. 1608).

Who manages until the division

For matters the chapter on co-ownership among heirs does not cover, the rules on estate administration and those on comunidad de bienes (co-ownership of property) apply (Art. 1601). In practice, this means:

• Ordinary management by majority. Ordinary management decisions bind everyone, even those who disagreed, if they are approved by an absolute majority calculated according to the value of the shares. For them to be valid, all the heirs must be told in advance what is going to be decided (Art. 841).
• Unanimity for big decisions. Major changes to the property and acts of disposition, such as selling or mortgaging, require everyone's consent (Art. 844).
• An administrator. The heirs can appoint an estate administrator; if they cannot agree, the court appoints one, considering the surviving spouse first and then the heirs (Arts. 1743 and 1745). The administrator can preserve the property, collect rent, make deposits and pay debts (Art. 1746).
• The court as a last resort. If no majority forms or what was agreed is not carried out, any heir can go to court (Art. 841), which can also order urgent measures to preserve the property (Art. 1602).

If an heir lives in the house. Each co-owner can use the shared property without harming the others, but one who has exclusive use without the others' approval and to their detriment must compensate them in proportion to their shares (Arts. 839 and 840). This is a common and delicate situation; see disputes among heirs.

If the causante was married, remember that the sociedad legal de gananciales (community property regime) is settled before the inheritance: half of the community property belongs to the surviving spouse in their own right. See community property and inheritance.

Expenses: CRIM, upkeep and mortgage

Every heir must contribute to the necessary costs of preserving the property, and to the expenses the majority agrees on, when another heir asks (Art. 843). Each person's rights and obligations are proportional to their share (Art. 838).

• CRIM. Property tax keeps accruing. Anyone who acquires a property, including by inheritance, must notify the CRIM (Municipal Revenue Collection Center) of the change of owner within 30 days (Código Municipal, Art. 7.052); the CRIM portal, crimpr.net, offers that process online (the site is in Spanish). A property owned by an estate counts as a single home for the residential exemption, which is granted to the co-heir who lives there and has no exemption on another property; a surviving spouse who was an owner and still lives in the house keeps it without applying again (Art. 7.035). In addition, the division cannot be recorded while property taxes remain unpaid (Art. 7.063).
• Upkeep and insurance. Necessary repairs, insurance and basic care are preservation expenses.
• Mortgage. The loan does not disappear with the death. If no one pays, the bank can foreclose on the property. Many families decide to keep up the monthly payments while they work out what to do with the house.

Renting out the inherited property

Rent from shared property belongs to the estate until the division (Art. 1603). It does not belong to whoever collects it or to whoever found the tenant. The right approach is to deposit it in an estate account, pay expenses from there and divide what is left according to the shares, or hold it until the division.

An ordinary rental is usually treated as management, but to be safe it is wise for all the heirs to sign it. If any heirs are minors, leasing their property for 6 years or more requires court authorization (Art. 633); see minors as heirs.

For that return, the estate needs an employer identification number (EIN), which the IRS issues free at irs.gov. We explain it in taxes of the estate.

Hacienda's lien on the property

All taxes owed to Puerto Rico, including CRIM taxes, are a preferred lien in favor of the Government on all the property of the estate (Código de Rentas Internas, Section 2054.01). For deaths after 2017, the lien exists even if those debts do not appear on the return.

That lien is canceled with the relevo (Hacienda's lien release), which the Departamento de Hacienda (Puerto Rico's Treasury) issues through SURI (Hacienda's online system) after the Estate Information Return (Modelo SC 2800 C) is filed, if there are no debts (Section 2054.02). The lien has no expiration date: it lasts until it is canceled. Until there is a relevo:

• no notario (in Puerto Rico a notary is an attorney) can authorize the sale, division or mortgage of the property, and the Registro de la Propiedad (Property Registry) cannot record it;
• banks cannot release to the heirs more than the greater of $15,000 or 25% of the funds (Section 2054.05).

That is why, even if the family is in no hurry to divide, it is wise to file the return within 12 months of the death. See Hacienda's lien release.

CaudalRelicto.com is an independent guide. It is not Puerto Rico's Departamento de Hacienda, the courts or any government agency. This page is general information, not legal advice from an attorney who knows your case. Names and figures in examples are hypothetical. Found an error? Tell us.