Married couples have a default legal framework; everyone else has only what they wrote down. Decide deliberately whether to hold as tenants in common or with survivorship, document unequal contributions, and agree the buyout mechanism before you need it — the alternative remedy is a court-ordered sale.
Married couples have a legal framework that applies by default. Everyone else has whatever they wrote down, and if they wrote nothing down they have a dispute.
Buying property with someone you are not married to is common — siblings, unmarried partners, friends, business associates, parents and adult children — and it is done without documentation far more often than it should be.
Married couples have a legal framework that applies by default if things go wrong. Everyone else has whatever they wrote down, and if they wrote nothing down they have a dispute.
This is general information rather than legal advice. Get an attorney to draft the agreement; the cost is trivial against what it prevents.
The first decision and the one most often made without thought.
Held as tenants in common, each owner has a defined share which passes under their will or estate. Your co-owner may find themselves owning a property alongside your heirs.
Held as joint tenants with right of survivorship, a deceased owner's interest passes automatically to the survivor, outside the estate. That may be exactly what you want, or it may unintentionally disinherit children from a previous relationship.
Neither is right or wrong. What matters is that the choice reflects an actual decision rather than a default on a form.
Unequal contributions are normal and become contentious later when nobody recorded them.
Document the deposit contributions, who pays what proportion of the mortgage, and how ongoing costs are split. Where contributions are unequal, decide whether ownership shares reflect that or whether the difference is a loan, a gift, or something to be equalized on sale.
Unequal contributions between people who are not married can also raise gift tax questions. Worth confirming rather than assuming.
An important practical point.
Where two people are on a loan they are generally each liable for the whole of it, regardless of how ownership is divided between them. A co-owner who stops paying does not reduce your obligation; the lender looks to whoever can pay.
That exposure sits behind most co-ownership disputes and it is worth understanding before signing rather than after.
The single most valuable clause, and the reason to have an agreement at all.
Decide in advance what happens when one owner wants out. Is there a right of first refusal for the other? How is the price determined — an appraisal, an averaging mechanism, a formula? How long does the remaining owner have to fund a buyout? What happens if they cannot?
Without that, the only remedy is a partition action, in which a court can order the property sold. It is slow, expensive, and corrosive to whatever relationship existed. Every co-ownership agreement is really an attempt to avoid it.
Who may occupy the property and on what terms, particularly if one owner moves out. Who decides on repairs, improvements and spending, and above what threshold agreement is required. What happens if an owner stops contributing. Whether either may let, mortgage or transfer their share, and to whom. And how disputes are resolved.
None of that is difficult to agree while everyone is on good terms. All of it is difficult afterward.
Co-ownership interacts with your will, and people frequently forget to align them.
Where title is held with survivorship, the property may pass outside your will entirely, which can defeat what your will was intended to achieve.
Whenever you buy with someone, review your estate documents in the same month rather than eventually.
Before signing, ask the uncomfortable question aloud: what happens if one of us wants to sell in three years and the other does not?
If the answer is not written down and agreed, that is the work still to do.
Considerably. Tenants in common means your share passes under your will, so a co-owner may end up owning alongside your heirs. Joint tenancy with survivorship passes your interest to the co-owner automatically, which can unintentionally disinherit children.
Document it. Record deposits, mortgage proportions and ongoing costs, and decide whether ownership shares reflect the difference or whether it is a loan or gift. Unequal contributions between unmarried parties can also raise gift tax questions.
Generally no. Where both are on the loan, each is usually liable for the whole of it regardless of ownership shares. A co-owner who stops paying does not reduce your obligation.
The exit. What happens when one owner wants out, how the price is determined, how long the other has to fund a buyout, and what happens if they cannot. Without it the only remedy is a court-ordered partition sale.
Occupancy if one owner moves out, who decides on spending and above what threshold, what happens if someone stops contributing, whether shares can be transferred, and how disputes are resolved.
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