Are you considering buying a residential or recreational property jointly with friends or family? With the rising costs of real estate, it has become more popular for friends to get together to buy cottages and investment properties, and share the costs and labour involved with owning a property.
Many individuals pursue this option informally, but having a written Co-Ownership Agreement in place can help the parties anticipate and avoid future issues. It is a good idea to discuss a Co-Ownership Agreement with a solicitor in the early stages of the buying process, however one can be drafted even if you have already purchased a property.
Co-Ownership Agreements can be tailored to suit the needs of the purchasers. Before you meet with a solicitor it is a good idea to discuss what issues you will want included in your particular agreement. Some common elements include:
- How will future expenses in relation to the property be shared?
- Who will take responsibility for property maintenance, book-keeping, tenant relations?
- What happens if one party dies or wants to sell the property, or sell their interest in the property?
- If there is a dispute between the owners, how will it be solved?
- Will there be periods of exclusive use, or will all the parties be able to use the property all the time?
Having a written agreement to spell out some of the “what ifs” just makes good sense and, in the long run, can save a friendship.
Joanne McPhail, Co-Managing Partner