Creating a Co-Ownership Agreement After Property Purchase
Yes – the short answer is that you can enter into a co-ownership agreement after you close on a co-owned property.
But…this does not mean that you should.
A co-ownership agreement gives co-owners the opportunity to organize themselves, address goals and expectations, and anticipate how to tackle or avoid points of disagreement before they emerge. While it is best to draft and secure such a co-ownership agreement as soon as possible, the door of opportunity does not close after the closing of the purchase transaction. Co-ownership agreements may be entered into in anticipation of, during, or following the purchase of property.
Whenever a purchase transaction involves more than one person, it is highly recommended to speak with your co-ownership lawyer sooner rather than later. Although agreements made verbally may be as valid as written agreements, including arrangements concerning how to divide ownership interests in the property, it is paramount to define the parameters of such an agreement in writing in order to prevent confusion about the rights and responsibilities of each co-owner towards the Property.
The reason for this is very clear: where there is no contract that deals with particular scenarios or unanticipated problems among co-owners, a court may end up deciding the fate of co-owners rights and obligations in relation to the property, or it may impose unwanted measures in order to settle a dispute, which may include forcing the sale of the property.
It is imperative that co-purchasers of a property appeal to a lawyer’s expertise. The reality is that shared property ownership represents a complicated and nuanced investment. A qualified co-ownership lawyer would be able to explain co-ownership and its implications in detail as well as draft a co-ownership agreement tailored to the unique needs of co-owners.
Aura LLP is Ontario’s leading law firm in co-ownership of residential and commercial property. We have helped dozens of co-owners structure their agreements, and close on their perfect home. Contact us to learn more about how we can help you.