Buying a property is an important decision. There are many factors to consider, from valuation to investment opportunities.
Many people thinking of earning from a property, especially first-time buyers, will lean towards co-ownership. Co-ownership gives them advantages like affordable mortgage, low down payments, and low maintenance costs. These make property investing more within anyone’s reach and budget.
Despite the many benefits of being a co-owner for a property, however, disputes and issues can be inevitable. With different people having a stake, they will have different ideas on how to manage the property for instance. Or one party may want a bigger share of the profit.
Here are some of the most common types of co-ownership disputes you need to know before jumping into the bandwagon.
Types of co-ownership disputes
The most familiar issue is family ownership disputes. Suppose that siblings own a single piece of property together. They may disagree with the current management or future handling of the property they own. Thus, complications and disagreements may arise.
Second, financial problems and disagreements between owners can happen, especially for business properties. Some examples would be when one of the owners rejects the responsibility of sharing with the expenses, such as costs for maintenance and upkeep. A co-owner may also refuse to compensate the other owner for some legal or technical reason.
Lastly, there may be times when a married couple will decide to get a divorce. The legal consequences of separating under a joint property can bring forth complex settlements that should be mediated by their lawyers.
Other than the types of disputes mentioned above, you may encounter various other issues regarding the co-ownership of a property. With that in mind, going through these disputes can bring anxiety and high cost for anyone.
Knowing how to avoid these issues or simply knowing how to deal with them will prepare you for any serious problems in the future.
How to Avoid Ownership Disputes
The best way to avoid these disputes is to acquire legal assistance or advice on managing the property you co-own with another person. It’s best to have a clearly defined structure or rules that will prevent conflicts or misunderstanding.
A detailed contract or agreement should be signed by all co-owners. The agreement should include the entitlements, responsibilities and earnings for each owner. Moreover, you should also specify vital aspects like the contribution to mortgages and the purchase price. It should also cite what will happen to a co-owner’s share in case of their death and the process for dissolution of co-ownership should it become necessary in the future.
These details should be discussed and agreed on in the presence of an attorney, preferably one who practices business or property law. Having an experienced lawyer review the details and paperwork before signing any contracts and agreements is a sound investment in itself.
When disputes do arise and results in a lawsuit, a litigation lawyer must step in for every party if they want to make sure their individual interests will be protected.
Each local area, be it precinct, city, or state, has its particular laws regarding property, ownership, and disputes. Therefore, hiring a lawyer who is familiar with local or state laws where the property is located will be necessary, even an advantage.
No one wants to engage in or fall into any dispute. Despite the complex nature of co-ownership and how property law differs from state to state, you can avoid these issues.
With careful research of local property law, an ironclad contract, and the help of legal expert, all parties can avoid future property disputes. Everyone can enjoy the property and have an equal share in the profits.