Thinking about Co-ownership of a property?
Things to consider before Co-owning a property
In the current economy, it has become harder for individuals to purchase their first family home. Given the difficulty an individual may face, Co – ownership of a property has become increasingly common. Co-ownership does not necessarily mean a couple buying their first family home together, rather, it could be friends and family.
So, what are the Pros and Cons to Co-ownership of a property?
Although joint ownership may provide financial benefit, this could become problematic when there is a breakdown in the relationship.
How to minimize complications and future problems if you wish to Co-own a property with another individual:
1. Property Sharing Agreement if this person is not your spouse or de facto partner.
2. Contracting out Agreement if you are in a de facto relationship or are married.
Things to consider for a Property Sharing Agreement:
a. Ownership Shares: Record clearly each owner’s share in the property. This is important particularly in a situation where the initial monetary contribution differs.
b. Financial obligations of each individual owner of the property and what happens if one fails to meet his/her financial obligations.
c. Exit plan, setting out if one party wishes to exit, how can they do so.
d. Dispute resolution process setting out what happens if the parties cannot agree with each other.
e. Market value in an event of a sale.
Contracting Out Agreement:
A Contracting Out Agreement would only need to be considered if the couple wants to clearly record their contributions towards the purchase as the funds advanced may be from separate property.
If you are considering Co-owning a property with someone, our property and relationship property team is here to guide you through the process.
For further updates and information please keep an eye out on our website in the coming year or feel free to contact us.