When it comes to co-ownership, get it in writing
With the mounting cost of home ownership in the Lower Mainland, it is becoming more and more popular for individuals to increase their buying power by purchasing property together. Having a co-ownership agreement in place can help you minimize the risks of co-ownership, setting expectations and preventing costly litigation.
By Karen Liong
Why have a co-ownership agreement?
As with any business venture, co-ownership in real estate property is a commitment which should be approached with the utmost care and consideration. Parties may be agreeable at the outset, but circumstances could change over time.
- What if an owner fails to contribute to maintenance expenses?
- What if an owner wants to realize on his investment before the other owners are ready to sell?
- What if an owner passes away?
Without a co-ownership agreement, parties could end up with the stress and headache of resolving their disputes in court. For one thing, the Partition of Property Act gives a co-owner the ability to apply for a court-ordered sale of a property in the absence of an applicable co-ownership agreement.
What is included in a co-ownership agreement?
At BTM Lawyers LLP, we can help you structure a co-ownership agreement that works with your unique circumstances. We can provide advice on some practical considerations, including:
- What decisions will require the unanimous consent of the owners?
- What happens if one of the owners becomes incapacitated and is unable to make financial or legal decisions?
- How will owners contribute towards capital expenditures or day-to-day maintenance expenses?
- What happens if an owner’s creditors registers a charge over the property?
- What is each owner’s role in managing the property?
- In what circumstances can the whole property or an owner’s share in the property be sold, and how are the proceeds to be distributed?
- Do the owners have an equal right to use the property?
If not, how are usage rights determined? Keep in mind that the foregoing information applies to co-owners who are not married to each other or in marriage-like relationship with each other. If you own real estate property with a spouse or someone you have a marriage-like relationship with, you should seek the advice of one of our family lawyer with respect to preparing a co-habitation or a marriage agreement.
This information is provided for general information purposes only and is not intended to be relied upon as a substitute for legal and professional advice.