Sample Co-Ownership Agreement

CO- OWNERSHIP Sample Co-Ownership Agreement Co-ownership is where two or more persons own property together with neither
co-owner owning any particular part of the property separately from the other. The co-owners can hold the property as Tenants-in-Common or as Joint Tenants. Each co-owner enjoys the same rights over the property as the other although in the case of tenants in common one tenant in common may be entitled to a greater proportion of the property in the event of the tenancy in common being partitioned. This will depend on how the tenancy in common was set up e.g. the Deed might state .to hold as tenants in common as to one third thereof to ! and two thirds to ".# $here property is to be held by two or more persons as co-owners the Deed conveying the property should indicate whether the persons will hold as tenantsin-common %setting out the shares of each tenant in common& or as joint tenants %has to be in e'ual shares& JOINT TENANC $here the property is to be held by the parties as joint tenants the main distinguishing feature of a joint tenancy as opposed to the tenancy in common is the right of survivorship associated with a joint tenancy The right o! s"r#i#orship %jus accresendi) . o The survivor automatically ta(es the property on the death of the joint tenant. The property falls outside a will since the deceased joint owner did not have any power to dispose of the property. The property devolves directly to the surviving joint tenant%s&. o Trustees will usually hold property as joint tenants so that on the death of any one Trustee surviving Trustees ta(e the whole of the trust property. o res"lting tr"st ) just because property is in joint names %i.e. the legal title*ban( account is in joint names& this does not mean that the beneficial entitlement to the property is enjoyed by the joint owners. The property may have been put in joint names for any number of reasons. +or e,ample an elderly person may put a ban( account into the joint names of himself and a son*daughter for convenience purposes. They may never have been any intention
for that son*daughter to inherit the monies in the account on the death of the elderly person. The facts of the situation will be said to result in a trust whereby the surviving joint tenant holds the property under a trust for the benefit of the ultimate beneficiaries of the deceased person-s estate. o pres"mption o! a$#ancement - in the case of married couples where property is put into joint names of both spouses there is a presumption that it was intended that the benefitting spouse ta(e a beneficial interest in the property and that there is therefore no resulting trust. The presumption can of course be rebutted by evidence to the contrary. The %o"r &nities all of which must be present for there to be a joint tenanc'. .therwise the property will be deemed to be held by the owners as tenants in common/ o Possession ) each joint tenant must have e'ual rights to possession of the whole of the property. 0f there is no unity of possession then there is no co-ownership. 1either a joint tenancy nor tenancy in common is created and separate ownership e,ists in relation to the property. 0f the possession of one part of the property is enjoyed by one party separately from the others then there is no co-ownership of that part. o Interest ) each joint tenant must have an identical interest in the property. E.g. one joint tenant cannot hold a freehold interest in the property if another holds a 2easehold interest only. o Title ) each joint tenant must have the same title by ta(ing the property from the same instrument. o Time ( each joint tenant-s interest in the property must have come into e,istence at the same time. Se#erence means the conversion of a joint tenancy into a tenancy in common o 3ale or other disposal by one of the joint tenants of his*her interest in the property. The person who buys one joint tenant-s interest cannot then be a joint tenant with the remaining co-owners. The unities of title and time are not present between the new co-owner and the e,isting co-owners. 0t is not possible to foist a new joint owner on your co-owning joint tenants by selling your interest to a third party so that the interest of your co-owner who predeceases
you would pass to that third party purchaser who may be a complete stranger to them. ! joint tenancy with the right of survivorship is almost always set up between related parties as a means of benefiting the survivors on the death of a joint owner. ! purchaser of one of the co-owners interest in the property becomes a tenant in common with the other owners. o !c'uisition of a further interest by one of the joint tenants. TENANC IN CO))ON No right o! s"r#i#orship ) the share of a tenant in common passes on death as part of his*her estate. The only unity re'uired is &nit' o! Possession
TER)INATION O% CO-OWNERSHIP "y Partition which can occur by/ 4utual !greement between the co-owners $here there is no agreement as to partition a tenant in common can ma(e an application to Court for partition or sale in lieu of partition under the 5artition !ct6 7898. &nion in a Sole Tenant
E*A)P+E O% CO-OWNERSHIP, Ta(e for e,ample a farmer : who wishes to dispose of his farm to his two sons ! and " but does not want to divide up the farm. ;is intention is that both sons would wor( the farm together and on the death of either of them the survivor would have the whole farm. ;e attends at his 3olicitors office and instructs the 3olicitor to draw up a Deed to put the lands into co-ownership of ! and ". 1either son is to have any particular part of the lands for his own use. The four unities of 5ossession6 0nterest6 Title and Time are present in this arrangement and it is therefore a joint tenancy that is created. !fter a few years ! decides that he has enough of the farming life and decides to sell his interest in the farm to a third party C. The sale to C is a severance of the joint tenancy and C the new owner becomes a co-owner with " but as a tenant
in common as opposed to a joint tenant and there is no longer any right of survivorship no right of survivorship. 0t shoud be noted that a joint tenancy is not the ideal vehicle for the ownership of property used as part of a business as in the current e,ample. ! tenancy in common coupled with a co-ownership agreement %giving the remaining tenant%s& in common first option to purchase the share of the tenant selling or on the death of a tenant in common& is a more suitable arrangement. 0f the business property were held in a joint tenancy the surviving joint tenant would inherit the interest of the deceased joint tenant to the e,clusion of his*her ne,t of (in.
<uestions 2ouise and 4ary6 two sisters6 can-t get on the property ladder and decide to buy a house together. Each contributes towards the deposit to purchase the property in e'ual amounts and each pay half the mortgage repayments. 1o co-ownership agreement is entered into 7. =. A. B. ?. 3hould they hold the property as tenants in common or joint tenants. $ould it be different if 4ary had paid >?@ of the deposit and would be paying >?@ of the mortgage repayments. !fter two years 2ouise decides she wants to move in with her boyfriend and wants to sell her interest in the property. !dvise 4ary. $hat would the division of e'uitable and legal ownership be if 4ary and 2ouise-s parents provided all of the purchase money for the house and they too( it in joint namesC 2ouise and her boyfriend get married and buy a house together. 2ouise provides all of the deposit money %from the sale of her interest in the house she had with 4ary& and ma(es all of the 4ortgage payments. The house is ta(en in their joint names. $hat is the legal and e'uitable ownership in this instance. Can there be a joint tenancy if both owners are contributing differently to the purchase price of the propertyC
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Sample Co-Ownership Agreement

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Should Louise and Mary hold the property as tenants in common or joint tenants?

Would the ownership be different if the contributions were unequal?

CO- OWNERSHIP Sample Co-Ownership Agreement Co-ownership is where two or more persons own property together with neither

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