Buying property; whether for personal, investment or business purposes, remains a stressful exercise.
As a result of the increase in price of properties and difficulty to raise the costs involved with maintaining and attaining a property; such as transfer costs, deposit and maintenance, many people are seeking to share some of the responsibility and financial exposure with another person/s.
Individuals opt to partner with another person to jointly buy a property, essentially co-owning the property.
It is important to enter into a co-ownership agreement before the purchase of a property. The co-owners have to appreciate that they do not exercise the same freedom over the property as they would if they were the sole owner of the property.
The co-ownership agreement helps provide clarity on the rights, obligations and scope of each co-owner.
For example, unless the parties have entered into a prior agreement, transfer will automatically be given to the co-owners in equal shares.
In this situation, neither of the 50/50 co-owners have overriding decision-making authority: hence a potential stalemate; but further than that, in this stalemate there is no prior agreement on how the parties will resolve any disputes which arise between them.
An extensive co-ownership agreement will assist co-owners who find themselves in such a position.
There are many pros and cons to co-owning a property - to assist in creating a successful co-ownership with clarity on procedures, rights and obligations, a co-ownership agreement is an effective tool.
Velile Tinto Cape Inc. provide specialist advice on property law and conveyancing. Contact our attorneys in Cape Town for expert legal assistance with your co-ownership agreement.
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