Why do you need a co-ownership agreement?
Anyone can have a co-ownership agreement, one common scenario is:-
They decide to buy the property 50:50 or 40:60 or in whatever proportions suit their needs, with the intention that in a few years they’ll sell it on for a profit.In that scenario, there isn’t the same level of trust as you’d see between a married couple, so they’re keen to get the ground rules clear and formalised right from the start.
The benefits of a written Co-Ownership Agreement
Co-ownership agreements will cover how to deal with amongst other things the most common scenarios:- disputes relating to:
- one co-owner wants to sell the property and the other does not;
- the co-owners cannot raise sufficient funds to purchase the other co-owners interest in the property; and
- the co-owners cannot agree on the manner in which the property is to be sold, including the:
- value of the property;
- method of sale (e.g. auction, list price, expression of interest); or
- agent to be appointed.
In Queensland, if you do not have a co-ownership agreement (and the property is not part of a matrimonial property settlement), the person who wants to keep it is out of luck. Section 38 of the Property Law Act 1974 (Qld) allows a co-owner to seek the appointment of a statutory trustee and ‘force’ a sale, regardless of whether the other co-owners agree.
In most instances, the co-owners do not have a written agreement setting out arrangements between the parties, including a mechanism to deal with disputes and how the property should be sold.
Make your agreement in the good times, not the bad
The earlier you make your co-ownership agreement, the better. If you can set the ground rules and document it all now whilst you’re still in agreement, that’s ideal.
If things go wrong down the track and emotions are running high, it’s better to be able to look back on an existing agreement than to try and hammer out a new one with limited consensus.
If you would like advice on how to set up a Co-Ownership Agreement, please contact your lawyer or otherwise feel free to contact Nathan Rose Lawyers which we recommend to clients wanting any legal advice around property ownership.
Property Conveyancing, Commerical Law, Wills and Estates, Litigation, Dispute Resolutions and Court Related Matters. 07 3495 0299 email@example.com