Recent home sales show that 15% of homes were purchased by non-married, non-related adults, and the trend is increasing. For unmarried co-owners, even inter-generational relatives, a written agreement is highly recommended that address the following questions:
- Purpose of Co-Ownership. Is it for residence, investment, financial assistance, inheritance, poor credit, or caretaking?
- Type of Co-Ownership. Tenants in common, a trust, or a limited liability entity?
- Expenses Sharing. How will expenses be paid and contributions be valued to ensure mortgage, utilities, HOA fees, and the like are equally addressed?
- Acquisition. Will co-owners contribute equally to the purchase price?
- Improvements. How will maintenance, repairs, and enhancements be decided on, paid for, and credited to either co-owner?
- Personal Property. Will co-ownership extend to furniture, fixtures, and separately owned property?
- Termination. How can a co-owner cash-out, move-out, or otherwise end the co-ownership?
- Liabilities. Can one co-owner authorize liabilities to attach to the co-owned property or the other’s separate property?
- Inheritances. What will happen to the co-owned property on the death of a co-owner?
- Indemnity. How will one co-owner indemnify, defend, and protect the other co-owner against liabilities, claims, and creditors of the other?
- Occupancy. Can a co-owner sublet or have others reside there?
Reaching a co-ownership agreement prior to the property purchase is always less expensive than dealing with problems thereafter when options are limited and agreement more difficult. The attorneys at Brooks, Tarulis & Tibble, LLC have experience in preparing co-ownership agreements and dealing with problems when there is no written agreement.
Should you have any questions or concerns, please contact us.