Co-Ownership Agreement for Property
Last Updated: 08/12/2023
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A Co-ownership Agreement is drafted to protect the separate interests of parties who jointly share the ownership of a property. There are different types of agreements that can be drafted such as:
- Deed of Trust
- Deed of Assignment
- Cohabitation Agreement also known as a shared ownership agreement
Why do you need a Co-Ownership Agreement?
Co-ownership of a property is an exciting time, however many couples that are taking the step while unmarried could be leaving themselves open to a costly lesson should their relationship end.
The reason for this is when you are married you’ll own a property as joint tenants which means both of you own 100% of the property together. There’s no need for a Co-Ownership Agreement because as joint tenants your share means you co-own everything together and if one of you dies then your share simply goes to your partner.
For unmarried couples you predominantly own the property as tenants in common with separate shares.
This is understandable as it is normally the case that one person has invested more into the property and until you are married it would make sense to keep your share separated.
As tenants in common your solicitor will file Form JO at the Land registry stating each of your shares in the property so that the co-ownership of the property is secured.
What is included in a Co-Ownership Agreement?
A Co-Ownership Agreement varies depending on the detail you want to include. Here are just some points you might want in your agreement:
- Your beneficial interest (what your share of the proceeds of sale will be)
- Your options if the relationship fails
- What to do if one person wants to sell and the other doesn't
- What happens if one of you stops paying your share of the mortgage
- How to calculate your share of any gain in the property
It's no just about your original deposit
Protecting your share of the deposit is crucial to any Co-Ownership Agreement, however your ownership share might also change up or down if, for example, you helped pay for an extension which increased the property's value or if you paid more of the mortgage repayment contributions.
Deciding how much you are due from the sale of the property should also take into consideration how much you have contributed towards:
- 1
The original deposit;
- 2
Mortgage repayments;
- 3
Developments to the property; and
- 4
Household expenses.
You get out what you put in
If it was your intention to co-own the property, then you should co-own any gain, however it rarely is a 50:50 split. In fact most couples share their contributions differently and often one person earns more than the other.
Where you both contribute in different amounts you need to make sure you have a legal agreement drawn up ideally before you buy the property stating who owns what and what happens if that changes.
Frequently Asked Questions
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Written by:
Andrew Boast
Andrew started his career in 2000 working within conveyancing solicitor firms and grew hands-on knowledge of a wide variety of conveyancing challenges and solutions. After helping in excess of 50,000 clients in his career, he uses all this experience within his article writing for SAM, mainstream media and his self published book How to Buy a House Without Killing Anyone.
Reviewed by:
Caragh Bailey
Caragh is an excellent writer and copy editor of books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey, property law and mortgage-related articles.
