Co-Ownership agreements are great tools that exist to ensure that all roles, responsibilities, terms, and conditions. The co-owners lay out the way to use a property in a manner that eliminates surprises.
But we know that disputes and conflicts are still likely to appear. When dealing with a partner, be it in business, friendship, or relationships. Conflicts can and most likely always will be a stressful situation. That is why having a clear and concise co-ownership agreement is so valuable. Simultaneously, having an experienced lawyer with you to navigate those situations and draft the agreement is in your and your partner’s best interest.
But to first understand how to navigate those disputes and how to resolve conflicts, first, we need to understand what is a co-ownership agreement, why is it important, so we can, later on, analyse how it will help you avoid those situations, or resolve them with less stress and less effort.
What Are Co-Ownership Agreements
A co-ownership agreement is a legally binding contract of ownership of a property. Between two or more parties with equal or different shares. There are multiple reasons why people choose to acquire a property together. But most commonly it is to share the costs of the property. Friends, business partners, or spouses can do it, whether for commercial use or not.
Co-Ownership agreements, as mentioned previously, lay out the terms, conditions, roles, and responsibilities of each of the co-owners. That includes how the property can be used, how the mortgage will work, who owns what, how disputes can be resolved, and the maintenance of the property.
A clear and concise agreement will save all parties involved a lot of trouble and headaches. A seasoned lawyer will be able to mediate and find a good common ground for all the parties and try to make everyone as happy as possible with the decision to co-own a property.
Misunderstands are one of the most common reasons for conflicts between friends and partners. An agreement that clearly lays out all terms and leaves no room for doubt of the intent of the parties will greatly aid to avoid litigation.
Disputes and conflicts are delicate matters and can sour the best of relationships. Laying out how they will be resolved should they happen is pivotal for a healthy relationship between partners.
Why Do You Need One?
While co-ownership agreements are not exactly mandatory when purchasing a property with more people, such as a spouse. For example, it is still extremely advisable that the conversation happens and one is considered.
The agreement exists not to make things harder,but to bring peace of mind and fewer surprises to the people involved. Business partners, despite all the trust they may have between them. May have conflicting ideas later on – or one of the partners may become incapable of taking decisions and someone else will do for them. Family members’ relationships may sour quite quickly as well. When conflicting ideas come into the equation, a co-ownership agreement protects both in case of divorce.
The value of this agreement lies in being able to have written terms in clear and concise language on everything involving the property. One of the main things is knowing if the co-owners will be joint tenants or tenants in common. As Co-ownership Agreements Calgary can be done with anyone, it is an important aspect to discuss.
Family members, more commonly spouses, normally do Joint Tenants. As both will own the property in its entirety and by right of survivorship if one passes away. The other inherits the property entirely – the other person cannot leave their “share” on a will, as there is no share to leave. Tenants in common is more usual in business partners or friends where each of the people involved owns a share of the property. Ratios diverge from case to case, and what can be done to the property also changes from case to case. As the co-ownership agreement is done specifically to each case with different terms and conditions.
With business partners, the chance conflicts happen is bigger, so a co-ownership agreement becomes even more pivotal. You must make the agreement extremely clear and include everything possible.
Co-Ownership Agreements Help Navigate Conflicts
A co-ownership agreement lays out dispute resolution techniques right at the beginning. So all parties involved can deal with conflicts and find better resolutions without resorting to litigation more easily.
One of the most common ways of dealing with disputes or conflicts of interest is to have a lawyer all parties trust to mediate a discussion to reach a common ground. Having a well-drafted co-ownership agreement from the beginning will also help at this stage.
If you have drafted an agreement. Where you and your partner are joint tenants, you can sever it and become a tenant in common. This is advisable when the relationship ends if it was your spouse, for example. This is one way of resolving a dispute as well since the parties will now own shares of the property and can sell it if they so wish to.
Avoiding costly disputes in court is always in everyone’s best interest, not mention the time,can consume and the stress it can cause.Overall, a co-ownership agreement will help avoid disputes and conflicts from the start if well drafted. By an experienced real estate lawyer by stating the “rules” agreed upon by the co-owners at the moment of purchase. If a conflict arises, with this set of rules that were pre-approved and agreed upon, a Lawyers can mediate the conflict more easily and find a common ground with less effort, less cost, and less stress.