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.