A co-ownership agreement is an amazing tool that exists to protect your best interests and rights, and ensure that there are ways of resolving possible conflicts in a way that is beneficial to all parties involved.
Those agreements are especially useful because whenever dealing with real estate and acquiring a property there are a lot of money involved, fees, responsibilities, and guidelines that need to be met in order to have everything in order so everyone can usufruct the property properly.
Having an experienced lawyer with you throughout the process will definitely make everything easier and save all parties a lot of stress, time, and money in the long run. Those agreements need to be well-made and reviewed, all parties need to make sure it includes all terms and conditions necessary for a healthy relationship between them.
But what, more specifically, is a co-ownership agreement? Are residential and commercial agreements the same? Do you actually need one? In the next following topics let us look over those topics and better understand them.
Co-Ownership Basics
As previously mentioned, Co-ownership Agreements Calgary are tools that exist to lay out terms and conditions when acquiring a property together with one or more partners in order to have a better mechanism to deal with conflicts and any problems. There are multiple reasons why people choose to draft a co-ownership agreement.
A co-ownership agreement can have different ratios of ownership, different terms, conditions, and how the property can be used by its co-owners as well as their duties and responsibilities to it such as maintenance, expenses, and more. From it, different capital investments are possible – one party can put more money into the acquisition than the other.
Dispute resolution and conflict management is also an important aspect to have in mind when drafting a co-ownership agreement in order to ensure that there will not be situations that can damage the relationship between partners.
There are several different terms that can be included in a co-ownership agreement. It is in your and your partner’s best interests to discuss it with an experienced Lawyers in Calgary that will have valuable input to give.
While a co-ownership agreement is not intrinsically necessary – as in, it is not a guideline or regulation requirement – it is still highly advisable that you consider having one. There are many events that change the current situation you are in that can create a lot of headaches in the future, such as eventual death.
Main Differences Between Commercial and Residential Co-ownership Agreements
A co-ownership agreement is pretty similar in nature regardless of why it is being used, but there are some terms and conditions that are more likely to appear in one rather than the other.
Starting from residential co-ownership agreements, normally it is important to lay out in the agreement if the regime of the agreement is tenants in common or joint tenants.
Joint tenancy is more usual with married couples, and tenants in a common with business partners or friends. In joint tenancy, the partners have equal shares of the property and equal voices on how the property will be managed. It also creates something called the Right of Survivorship which is when one of the partners passes away, their share goes to the other.
Tenants in common are a little more restrictive, which can be a good thing in some situations. Agreements with a tenants in common regime mean that each of the parties involved in the acquisition of the property owns their share of it in a divided way. That means, that the other parties do not have a right to it should someone pass away. Their share can be left on a will and be part of their estate. The terms and conditions of usage of the property will still apply, however.
In commercial properties, this is not as common since the owners will not be living there most likely. But there is a larger concern about property usage, its expenses, financial contribution, and how to deal with mortgages. If the property is an investment, the way the profit will be shared is also critical to be laid out initially to avoid conflicts as much as possible.
Business partners are the ones most likely to encounter conflicts and problems on their journey together. How they will deal with them is an important point to tackle and many times having an experienced lawyer mediate or arbitrate meetings to find a solution is an advisable move. At the same time, business partners and friends commonly are able to have more direct and objective conversations and lay out more terms that cover a lot of ground due to the nature of their relationship. Having these written down in an agreement saves a lot of stress down the road.
Concise and cohesive language is pivotal. Terms, conditions, and rules need to be laid out as clearly as possible. If there is any conflict that the conflict resolution techniques such as mediation cannot resolve and matters go to Court, the judge will analyze the document as a whole to understand the motive and intentions behind it. A clear and well-written document gives no room for doubt and will save time and money from all parties as well as give a more satisfactory outcome for everyone involved since all of this was agreed upon previously.
From start to finish, co-ownership agreements are amazing tools to protect everyone’s best interests and rights. An experienced lawyer is also an amazing resource to have, their expertise will guarantee a more complete and comprehensive agreement that will protect the property and its owners.
Having an agreement that is coherent will be one of the best tools to defend all parties in case of any conflict or dispute that cannot be resolved without going to Court. On that note, going to Court should always be your last resort, it is a lengthy, expensive, and extensive process. Most conflicts can be resolved with the support of an experienced lawyer.