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Co-owning property with someone else: the ups and downs

What is co-ownership?

Co-ownership involves that two or more people jointly own the same property, for example land. In essence, they legally share ownership without dividing the property into physical portions for their exclusive use. It is thus commonly referred to as co-ownership in undivided shares.

It is possible to agree that owners acquire the property in different shares; for instance, one person owns 70 percent and the other 30 percent of the property. The shares appear from the title deeds registered in the Deeds Office.

The benefits:

In the case of a residential property, the bond repayments and costs of maintaining the home are halved. However, there can be problems, for example when one of the parties involved wants to sell and move, but the other not.

The risks:

If ownership is given to one or more purchasers, without stipulating in what shares they acquire the property, it is legally presumed that they acquired the property in equal shares.

The risks, the benefits and the obligations that flow from the property are shared in proportion to each person’s share of ownership in the property.

The agreement:

If two people own property together in undivided shares it is advisable to enter into an agreement which will regulate their rights and obligations, and also what happens should they decide to go their own separate ways.

The practical difficulties that flow from the rights and duties of co-ownership are captured by the expression communio est mater rixarum or “co-ownership is the mother of disputes”. It is therefore important to agree on the respective rights and obligations, including the following matters:

  1. In what proportion will the property be shared?
  2. Who has the right to occupy the property?
  3. Contributions to the initial payment to acquire the property.
  4. Contributions to the ongoing future costs related to the property.
  5. How the profits or losses will be split, should the property or a share be sold.
  6. The sale of one party’s share must be restricted or regulated.
  7. The right to draw funds out of an access bond over the property.
  8. The consequences of a breakdown of the relationship between the parties.
  9. Death or incapacity of one of the parties.
  10. Dispute resolution procedures.
  11. Termination of the agreement.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)


Co-ownership of property: what you need to know

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