Featured News 2014 The Legal Implications of Co-Owning Property

The Legal Implications of Co-Owning Property

Are you considering co-owning property? There are a lot of legal implications to this decision that could majorly affect the way that you handle your home. There are several different types of co-owning arrangements that you will need to consider. These include a tenancy in common, a joint tenancy, and a limited liability company.

A tenancy in common is a property ownership where each person owns an undivided share of the property. This means that if you own a duplex with another person as tenants in common, you each own a portion of the building. These arrangements are normally used when two unrelated people decide to own a home together. They are also used frequently in multiunit residential buildings like duplexes.

If you take title to property you and your co-owner will need to draft a written agreement which covers each owner's rights and responsibilities. You also may need to figure out financing. Are you going to work with a single mortgage, or are you going to need to divide that mortgage up?

If you are all paying towards one single mortgage, if one payer is late, it can affect the entire group of co-owners. Fractional mortgages may be a better option, because each person must qualify for the loan separately and must sign separate promissory notes and deeds of trust.

A joint tenancy is a form of ownership that includes a right to survivorship. If you choose to own property under the model, should you pass away, your co-owner will receive your share. This works either way. These joint tenancy arrangements are typically used by couples and families so that it is certain that the house will stay within the family. It can also work will for unrelated owners if they are worried about what would happen to the home should one individual pass away.

You can also co-own property using an LLC (limited liability company.) In these arrangements, the group becomes a legal entity and can enter into contracts which allow it to purchase land and partner with developers and contractors. Normally LLCs are used for developing housing projects and eventually the titles of the land are transferred to members in units.

If you want more information about the legal implications of owning property with others, don't hesitate to call our firm today. With the right attorney on your side, you may be able to work through your co-ownership and make sure that everything is legally satisfactory.

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