You may be considering entering into an ownership arrangement with your family member or a close friend. Whether it’s an investment property or your first home, it’s important to clearly understand what the obligations and interests under the ownership structure will be.
A co-ownership agreement sets out the terms and conditions and the rights and responsibilities of each party. The agreement addresses the following key considerations:
- The amount of each party’s initial cash contribution;
- The amount of each party’s beneficial interest in the venture;
- The amount of each party’s responsibility and liability for monthly mortgage payments, maintenance and upkeep costs, and major repairs and renovations;
- How and when the property can or must be sold; and
- How the proceeds are split and paid out between the parties.
How title property is held is one of the most important considerations in these types of agreements. The two different ways that property can be held is joint tenancy or tenancy in common. Joint tenancy invokes the right of survivorship, so that on the death of one of the owners, the ownership of an asset passes in equal shares to the surviving owners. Tenants in common, on the other hand, have their share of an asset become part of their estate, with the asset distributed on their death based on their will.
Let us help by working closely with you and your family and associated, in order to draft the right co-ownership agreement for your needs.
If you are interested in having a Co-Ownership Agreement created for your property or potential property, please contact one of our Real Estate lawyers today.
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