Co–ownership Agreements – Do I need one?
Have you or are you intending to purchase a property with another person such as a friend, family member or investor? Have you considered who will be responsible for certain aspects of maintaining the property?
It is critically important, when you are considering purchasing property with another person or persons, that each party has a complete understanding of their respective rights and obligations in relation to that property. More often than not, parties do not discuss such things and enter into the transaction under the belief that each party is on the same page as to how the property will be maintained. When there are inconsistencies with this belief, conflict may arise.
In order to prevent such conflict, a co-ownership agreement may be prepared. The agreement may set out and formalise issues that may arise in relation to the property. The following issues may be included in a co-ownership agreement:
- the financial contribution of each of the parties;
- payment of outgoings and loan repayments;
- responsibility of maintenance of the property;
- consequences of defaulting in payments;
- who can live in the property;
- notice of a party’s intention to sell their share in the property;
- death of a co-owner; and
- how will the property be held (ie, joint tenants or tenants in common).
These matters are often not properly considered when purchasing a property, however it is important to plan for any future conflict that may occur between prospective co-owners. A co-ownership agreement, if properly prepared, may (likely) reduce the risk of litigation between the parties and/or assist with resolving litigation in a timely manner, thus saving in legal costs.
To learn more about co-ownership agreements, please contact one of our friendly staff today at Bambrick Legal.