Last week, we posted a blog about buying a property with another person. In this blog we look at the benefits of putting in place a co-owners agreement to outline the legal obligations, interests and rights you have with your co-owner.
Advantages of having a Co-Owners Agreement
- The rights and interests of the co-owners can be protected if case the relationship turns sour.
- Defines the rights, interests and obligations of the parties in a co-ownership relationship and effective to those relationships that are investment and business oriented.
- Gives the co-owners flexibility and autonomy. The co-owners can specifically stipulate how they want the co-ownership to run.
- It can help anticipate any issues that the co-owners may face during the co-ownership.
- Co-owners can stipulate how issues in relation to the purchased property are decided upon or mitigated.
- It can help avoid costly and protracted litigation in case of dispute.
5 Things to Consider in the Co-Owners Agreement
- The proportions that each co-owner will contribute to the initial cost of the property or commit to pay the mortgage.
- The use of the property. For example, whether all co-owners are entitled to full access, scheduled access or if the property will be rented out.
- The responsibilities of the co-owners (e.g. who will pay the taxes, take out the insurance, keep the books and records, manage the property, collect rent).
- Division of the profits of the property.
- The authority granted to a co-owner to sell the property or a share in the property and how it shall be exercised.
The list is not designed to cover all of the things that should be considered during the conveyancing process or purchase of a property but it does provide some food for thought which can save a serious breakdown in relationship between the Co-Owners after the excitement of the purchase starts to recede.
If you have any queries about buying or selling property or the conveyancing process, please give us a call here at ClickLaw as we would be delighted to assist.
John Kettle – Solicitor Director