Co-ownership Agreements

What is a Co-Ownership Agreement?


A Co-Ownership Agreement is a written Agreement between two or more owners of a property which formalises the arrangement on which the owners deal with a jointly held property.


When two people purchase a property, they have an option of owning their respective interest in the property as joint tenants or tenants-in-common.


As joint tenants, on the death of one, his/her share automatically passes to the surviving joint tenant. Joint tenants cannot sell the property without the consent of each other.  This would be the most common form of ownership amongst married couples.


As tenants-in-common, each party holds their share independently of the other.  This ensures that their share does not automatically fall to the other co-owner on death and it allows each party the option of disposing of their interest in the premises to a third party by sale or on death by way of a will.  As a rule of thumb, most friends who buy a property together usually hold their share of the property as tenants-in-common.


Where friends or an unmarried couple purchase a property, it would be recommended that a Co-Ownership Agreement be entered into between the owners.  As outlined above, the Agreement will set out in detail how the property is managed and dealt with between the owners.


For example, the agreement will normally set out the ownership share of each owner of the property, whether it be equal or whether one owner should have a larger share in the property.  It will also set out whether each of the owners should be equally responsible for monthly mortgage repayments and other outgoings i.e. whether one partner would pay more than 50% of the mortgage repayments. The agreement will also set out what would happen if one owner wanted to sell up or, if applicable, a couple were to split up.


Finally, the co-ownership agreement would also normally set out the share of any proceeds of sale that each owner is entitled to if the property were sold.


Whilst there is usually an extra fee for drafting and completing a Co-Ownership Agreement, it is a very practical document and may help avoid a lot of arguments and expense in the future.

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