Yes. When a co-ownership share is transferred, the other co-owners have a statutory pre-emption right. You must first offer them the share on the same terms as the intended sale to a third party. Transfers to a close person are exempt: a direct-line relative, sibling, spouse or another person meeting the statutory definition. An overlooked co-owner can challenge a transfer that bypasses this right.
Must I offer the share to the other co-owners?
When a co-ownership share is transferred, the co-owners have a pre-emption right, unless the transfer is to a close person (Section 140 of the Civil Code, read with Sections 116 and 117). A close person is a direct-line relative, sibling or spouse, or another person in a family or comparable relationship where harm suffered by one would reasonably be felt by the other as their own. If the co-owners cannot agree how to exercise the right, they may purchase the share proportionately to their existing shares.
In practice, before selling to a third party, you must offer the share in writing to the other co-owners on the same terms: the same price and payment terms as those offered to the prospective buyer. For property, we always recommend a provable offer, sent by registered post with proof of delivery, so you can demonstrate that you met your duty.
What happens if I bypass the pre-emption right?
A transfer made without an offer to the other co-owners is not automatically a nullity. However, an overlooked co-owner can enforce their rights through legal action, including challenging the transfer. This is a hidden risk for the buyer: the share may remain in dispute for years. If you are buying a share, have compliance with pre-emption rights checked. This forms part of our purchase agreement review and the due diligence we carry out for land purchases and sales.
Sometimes ending co-ownership is the better option
Selling a share to a third party is often a last resort. A new co-owner from outside the family can bring further conflict, and a share usually sells below its proportionate value. If the co-owners can at least talk to each other, settlement of co-ownership is usually economically preferable: an agreement to divide the property, buy each other out or sell the whole property together. If agreement is impossible, the court decides.
This answer provides general information on the law as at 21 July 2026. It does not constitute legal services or replace an assessment of an individual case. The details of your situation may differ. Book a consultation to discuss them.
