Joint Owned Property
Candlefocus EditorWhen parties hold joint ownership of a property, they must make decisions by consensus. This means that if one of the parties wants to sell their share or make some changes, the other party must give their consent. Thus, joint ownership of a property can be very challenging to manage, especially if the parties disagree or lack communication.
Joint ownership is generally established through the formation of a legal agreement associated with the purchase of a property. There are two common legal forms of joint ownership: Joint Tenancy and Tenancy in Common.
Joint Tenancy is when two or more people buy a property together, and each is entitled to undivided equal ownership of the asset. In this case, each owner has an equal right to the use of the property and will share an equal part in paying for the mortgage and other associated costs. If one of the joint tenants dies, the surviving party will automatically inherit the other's share of the asset.
Tenancy in Common describes a situation in which two or more parties jointly own property but with unequal shares. Each owner has the right to sell or transfer their share of the property to anyone they choose and if one of the tenants passes away, the surviving party does not automatically inherit the entire share. Rather, the deceased tenant's ownership rights pass to their heirs or beneficiaries.
When considering joint ownership of a property, it is important to create a legal agreement defining the terms of ownership and to protect each party's rights and interests. Without an agreement in place, there may be many problems down the line caused by misunderstandings or disagreements. Additionally, it is important to think about the future and how the interests of the two parties may diverge over time. This can create difficulty if one party wishes to sell or transfer their share while the remaining party wishes to retain the property.
Joint ownership of property is a useful tool, but it is not without risks and should be entered into with all due caution and consideration. An agreement detailing the rights and obligations of all parties should be established before the property is purchased to minimize any potential risks.