Do you own property with a family member, friend or someone else? While you and your co-owners may be family or good friends, disputes may arise if you don’t take the time to work out in advance how to resolve any problems that may crop up down the track.
Like any financial partnership, it is crucial that the ins and outs of the arrangement be documented in a legally binding way – a good way of doing this is by way of a “co-ownership agreement”.
A carefully thought out co-ownership agreement will not only minimise the likelihood of future disputes, but will also provide guidelines as to how to manage any disputes should they occur. You will also need to consider what will happen when a co-owner dies or becomes incapacitated. Careful consideration needs to be given as to whether you should make reference to your wishes relating to the co-owned property in your Will.
The best time to work out the terms of a co-ownership agreement is prior to the purchase of the property – in particular, prior to exchange of contracts. If you already own property with someone however, it is often not too late to enter into a co-ownership agreement years after the purchase of a property.
Having a co-ownership agreement is particularly important if your self-managed superannuation fund owns property together with others. If this is the case, there are several other issues that you will need to consider in addition to the ones mentioned abov
For legal advice on this issue or to update any of your existing documents please contact our lawyers who specialise in asset ownership structures, commercial law, self-managed superannuation funds, Wills and estate planning. Our office is conveniently located in Parramatta.