Co-ownership is when one or more people jointly own the same property. In essence, it is when they legally share ownership without dividing the property into physical portions for their exclusive use. It is thus commonly referred to as co-ownership in undivided shares. Think of two people jointly owning a motor vehicle: they do not stipulate that one person is the exclusive owner of the engine and the front seats, and the other person, the exclusive owner of the rear seats together with the boot. It is very important that prospective co-owners enter into an agreement between themselves before they purchase any property. If they do not sign any agreement before they purchase, they will soon realise that they are practically, physically and financially “joined at the hip”; generally to each party’s detriment. A good agreement should unambiguously record what the co-owners have agreed, to avoid any disputes arising in the future. It should address the following issues: In what proportion will the property be shared? Who has the sole right to occupy the property? Who will contribute what initial payments to acquire the property. Who will contribute what amounts to the ongoing future costs and finances. How the profits or losses will be split, should the property or a share be sold ? The sale of one party’s share must be restricted or regulated. The right to draw funds out of the access bond must be regulated. A breakdown of the relationship between the parties. Death or incapacity of one of the parties. Dispute resolution options before issuing summons. Termination of the agreement.
Posted on: Fri, 07 Jun 2013 08:33:56 +0000
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