Buying Property with another person who isn’t a spouse or family member – when Co-ownership agreements are necessary and what is involved;
So you’ve bought a home with your sibling, business partner or a good friend. Now what? Buying the home may be the easy part. Now that you’ve bought the home, who is going to pay for the utilities, property taxes, strata fees, home repairs and insurance. Who will be living in the property or, if you’re renting it out, how much rent will you charge? Will you allow pets? How will the rent be collected? At some point, one or more of the owners will decide they no longer wish to keep their interest in the property and that they’d like to sell. It’s important to have an exit strategy in place before getting to this point as it’s likely that the life circumstances of each of the owners will change at a different time and pace. One co-owner may be looking to sell at a time that is inconvenient for the other owner. To minimize the chance of a dispute arising when co-owners find that they do not agree with how the other owners want to manage the property, a co-ownership agreement should be prepared. We recommend that this agreement be in place either before or at the time of the purchase so that the relationship between the parties buying the property is never in question. By talking about your intentions for the property with your co-owner(s) before you buy the property, and then clearly setting them out on paper, you can avoid future disagreements. After considering the terms of a co-ownership agreement, you may decide that your intentions don’t match the other co-owner(s) and that it may be a better idea to wait and buy the property on your own. Either way, a co-ownership is a good way to protect your rights and the rights of the other co-owner(s), regardless of whether he/she is your sibling, your friend or simply your business partner.