It is increasingly hard for adults who want more living space to afford detached and semi-detached housing in Metro Vancouver. One way to be able to make the move out of dense condo living is to buy and share a property with a friend or family member. However, owning and sharing a property with another person can mean increased risk of liability (e.g. where a co-owner loses his job and fails to pay his contribution to a monthly mortgage payment) and has practical considerations that are not usually necessary to keep in mind when you’re entirely responsible for a property.
A co-ownership agreement creates a set of legally-binding rules for owners of a property. Getting a co-ownership agreement in place can help prevent and resolve disputes in an efficient way that doesn’t require expensive litigation.
Co-ownership agreements generally outline the following:
- Type of co-ownership and percentage of ownership
- Capital contributions of each owner
- How expenses are going to be handled
- Special accounts for expenses
- Contributions for expenses
- Maintenance of the property
- How costs of maintenance will be handled
- Insurance over property
- Rental of the property to outside parties
- Mortgage of property
- Sale of property
- Default by an owner
- Termination of co-ownership
- Resolution of disputes.
We work with our clients to prepare an agreement that reflects the unique aspects of their relationship with their co-owner and of the property itself. Ideally, working through and signing a co-ownership agreement should occur before, or reasonably concurrently with, the completion date for purchasing a property. That said, a co-ownership agreement can be created at any stage of shared ownership of a property.