Home Co-Ownership Disputes


With the prices of detached homes and condominiums so high, many unmarried people plan on joining together to buy a home they can live in together, pooling their different financial strengths to ‘make it happen.’

What these folks usually overlook is that they are entering into a business co-ownership relation which can have as many issues or problems to explore and work out as is the case with any business partnership. Questions arise such as:

  1. Will each owner contribute the same amount to the downpayment?
  2. Will each owner co-sign the loan documents and hence be fully responsible for loan payments even though they each agreed to share this burden (the lender can look to any one loan co-signer for full payment).
  3. How will the owners allocate the burdens for future home expenses, such as ongoing home loan payments, property taxes, home insurance premiums, repair and maintenance expenses?
  4. What is the consequence if one co-owner can’t meet his/her share of these ongoing expenses?
  5. If both co-owners move out of the home without selling it, how do they decide on renting it out to tenants and setting rent?
    If only one co-owner moves out, what kind of ‘rent’ does the stay-in co-owner pay to the co-ownership?
  6. What happens to the ownership interest of a co-owner who becomes disabled or dies?
  7. Can a co-owner sell his/her interest to an outsider, or must he/she first offer this interest to the other co-owner? At what price? Will the buy-out be permitted in payments over time?

These questions cry out for answers by a written agreement between the co-owners before they become co-owners, at a time when they can examine the questions in as objective a manner as possible. Too often no such agreement is made, and bitter disputes arise costing many times the fees to put an initial agreement in place. Once again, tragically so many people can be “penny wise and dollar foolish” in not seeing an experienced lawyer to immediately get an in-depth exploration of their planned relationship, and good answers to the above questions tailored to these specific people.