Co-owners’ Agreements

Property Law: 05 February 2024

Author: Rob Bradley - Our People

Whenever two or more people agree to combine resources in order to purchase a property together, if the Family Law Act (1975) does not apply, a co-owners’ agreement setting out the expectations, rights and obligations of the parties is an almost indispensable first step.

However, because of the myriad of circumstances that might eventuate, it is very difficult to conceive of an agreement that will cover every situation. Realistically, all you can do is, reduce the number of matters that might lead to disputes later.

Even when one of the parties is “the bank of mum and dad” or the parties are close friends, it needs to be borne in mind that circumstances change, employment and good health are not always guaranteed and down the track, you might be dealing with a third party such as a trustee in bankruptcy or an executor; a matrimonial dispute affecting one party might also impact upon that party’s ability to act in accordance with expectations.

Remembering that ownership of an interest in the property is likely to be one of your most valuable assets, legal advice should be obtained to craft an agreement that suits your circumstances.

Some of the matters commonly catered for include the following.

1. Comparative monetary contributions to initial acquisition, mortgage repayments, recurrent outgoings, repair and maintenance expenses
2. Legal ownership – whether or not proportionate to initial/ongoing monetary contributions, effect of death of a party?
3. Domestic/ household contributions and sharing arrangements: if all parties will live in the property (or have a right to do so) what are the expectations in respect of everyday activities such as cooking, cleaning, gardening? What will be the status of furniture and equipment brought onto the premises by one party – retained ownership but an equal right to use? Who will pay these household expenses and in what proportions?
4. Renovations and improvements - what works are initially envisaged, what is the process for resolving what works can be done? Who will pay for these expenses and in what proportions?
5. Effect of changed circumstances & failures to meet expectations – do disproportionate contributions create one or more of, a debt, a right to interest, an entitlement to a change in legal ownership shares?
6. What if a party wishes to sell – first or last option to purchase, procedure?

If you find yourself in need of advice regarding co-owners’ agreements, please do not hesitate and contact Robert Bradley or Bao Ngo on 8600 6000, for appropriate advice today.