Although the purchase of land with shares may seem like an advantageous investment, it carries serious risks. Especially in such properties with a large number of shareholders, legal problems and complex processes can negatively affect the value of your investment.

Below, we list the most important risks and points to consider for those who are thinking of buying land with shares:

1. Consent of Shareholders

One of the biggest challenges with shared farms is that all shareholders must give their consent to the sale. Obtaining this consent is not always easy. If the consent of all shareholders is not obtained, the sale will not take place and this may turn into a long waiting process for the buyer.

2. Risks Associated with the Exercise of the Preemption Right

One of the most important legal obstacles related to shared farms is the right of redemption. Shareholders can exercise their right to buy out a third party in the event of a sale of the immovable property to that shareholder. The use of the right of redemption may lead to the loss of rights of the buyers and prolong the process.

3. Lawsuits for the Elimination of Partnership

When there are disagreements between shareholders, this may lead to a “dissolution of partnership lawsuit”. As a result of this lawsuit, the shared immovable property may be sold or divided among the shares. In such a case, investors may not be able to use the land as they wish and the expected return on investment may be hampered.

4. Changing Shareholder Structure

On shared farms, share ownership can change hands frequently and new shareholders may have different plans for the management or use of the farm. These changes can disrupt the existing order in the purchased share and create undesirable situations for the investor.

5. Legal and Economic Uncertainties

Land with shares is quite complex in terms of legal processes. After purchasing the land, investors may face objections from other shareholders, such as the use of the right of redemption.