Co-Owners Agreement

This is a Deed for use by two parties who have acquired Property together. They may be husband and wife, a couple of friends or professional investors. The idea is that they are agreeing on certain terms which regulate their respective rights in relation to the property.

You buy a property with your friend. You have a fight - what do you do? Can one of you force the sale? Can one of you buy the other out? Who decides? Can you force the sale on the open market? Who pays all the bills and in what proportions?

The Co-Owners Agreement addresses all these issues.

If you buy property with someone else it is prudent to sign a document like this to outline everyone’s rights and responsibilities.

Build the document now, while you are all friends and working together.

Download the Co-Owners Agreement Checklist

Sample is not available for this document.

The Property
• Is it important how I describe the property?
Joint Tenants or Tenants in Common
• What is the difference between joint tenants and tenants in common?
• Who mostly owns property as joint tenants?
• How do I find out whether I hold the property as tenants in common or joint tenants?
• What is the difference between “tenants in common in equal shares” and “tenants in common in unequal
• Tenants in common in unequal shares
Co-Owners
• Is the Co-Owner a human?
• Is the Co-Owner is a company?
• I have bought a house together with three friends. Can we use this document?
• We own the Property as joint tenants. What do we enter as our percentage interest?
• We own the Property as Tenants in Common. What do we enter as our percentage interest?
• A warning for using this document for tenants in common in unequal shares
• My Co-Owner and I have contributed deposits that are unequal to our respective interest.
• Does this document allow me to live in the Property or Mortgage the property?

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The Property

• Is it important how I describe the property?

  Yes. It is very important that you describe the property properly. You want there to be no doubt whatsoever as to which particular property this Agreement is in relation to.
  
  You may wish to attach a copy of the Certificate of Title for the property and the Offer of Purchase and Sale of Land to this Agreement once signed.

  This hint is provided by Law Central Legal.

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Joint Tenants or Tenants in Common

• What is the difference between joint tenants and tenants in common?

  If you own an asset with another person, you can only own it in 2 ways: Joint Tenants or Tenants in Common.
  
  If you own the property as Joint Tenants then when you die your interest goes to the survivor.
  
  If you don’t own the property as Joint Tenants then you own the property as Tenants in Common. If you own the property as Tenants in Common then when you die your bit of the land (e.g. 25% or whatever it is) goes according to your Will.

  This hint is provided by Law Central Legal.

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• Who mostly owns property as joint tenants?

  Pretty much only married or Defacto couples would consider holding assets as Joint Tenants. Let us say you purchased a property with your friend. If you died, wouldn’t you want your interest in the house to go to your spouse? Non couples generally purchase property as Tenants in Common.

  This hint is provided by Law Central Legal.

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• How do I find out whether I hold the property as tenants in common or joint tenants?

  Just take a look at a copy of your Certificate of Title.

  This hint is provided by Law Central Legal.

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• What is the difference between “tenants in common in equal shares” and “tenants in common in unequal

  Tenants in common in equal shares hold the property equally. I.e. Mia and Michelle own the property as tenants common in equal shares, and therefore each own a 50% share.
  
  Tenants in common in unequal shares means that the property is held by two people, but not equally. For example, Simon owns 75% of the property, whereas Oscar owns 25% of the property.
  
  See the hint “What is the difference between joint tenants and tenants in common” for an explanation of joint tenancy versus tenancy in common.

  This hint is provided by Law Central Legal.

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• Tenants in common in unequal shares

  The % sign is already in. Please don’t type it in again.
  
  The interest in the Property is the portion or share of the land and fixtures that each Co-Owner will own.
  
  You can only express that interest as a percentage. For example you if you had 1/3 and your friend had 2/3rds then you would type in for yourself 33 1/3 (leave of the percentage mark). For your friend you would type in 66 2/3 (again leave out the % mark).
  
  For example if you typed in 75 then this means that this person has 75% of the property.
  
  At the end of the day all Co-Owners' interests when added together must equal exactly 100%.

  This hint is provided by Law Central Legal.

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Co-Owners

• Is the Co-Owner a human?

  If the Co-Owner is a human then you need to put in their first name, their middle name and their surname.
  
  You do not need to put anything in the 'ACN' field. Only companies have an 'ACN'.

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• Is the Co-Owner is a company?

  If the Co-Owner is a company, you do not need to put in a first name or a middle name. But you must put in a company name and an 'ACN' in the appropriate fields. The 'ACN' stands for Australian Company Number. Every Australian company has one. You need to use the ACN on all important documents - such as this one.
  

  This hint is provided by Law Central Legal.

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• I have bought a house together with three friends. Can we use this document?

  No. This document only works if there are two co-owners. You should seek specific legal advice to record your transaction instead.

  This hint is provided by Law Central Legal.

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• We own the Property as joint tenants. What do we enter as our percentage interest?

  If you are joint tenants, leave the percentage interest blank. This document will automatically record that you own 50% each.

  This hint is provided by Law Central Legal.

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• We own the Property as Tenants in Common. What do we enter as our percentage interest?

  The % sign is already in. Please don’t type it in again.
  
  The interest in the Property is the portion or share of the land and fixtures that each Co-Owner will own.
  
  You can only express that interest as a percentage. For example if you had a 1/3 share and your friend had 2/3rds, then you would type in for yourself 33 1/3 (leave out the percentage mark). For your friend you would type in 66 2/3 (again leave out the % mark).
  
  For example if you typed in 75, then this means that this person has 75% of the property.
  
  At the end of the day all Co-Owners' interests, when added together, must equal exactly 100%.

  This hint is provided by Law Central Legal.

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• A warning for using this document for tenants in common in unequal shares

  If you and your co-owner are tenants in common in unequal shares, you may want to carefully consider whether this document is right for you.
  This is because this document gives each co-owner equal voting rights on all issues. If you wish for tenants in common in unequal shares to have voting rights in proportion to their Interest in the property, then you will need to discuss this with your lawyer.
  

  This hint is provided by Law Central Legal.

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• My Co-Owner and I have contributed deposits that are unequal to our respective interest.

  This document does not provide for a situation where Co-Owners have contributed deposits that are unequal to their Interest in the Property.
  
  For example, Charlie and Molly are friends. They have purchased an investment property for $500,000 as tenants in common in equal shares. Charlie contributed a deposit of $75,000, whereas Molly contributed $100,000. Charlie and Molly decide not to use this document, as it cannot record that Molly is entitled to an extra $25,000 upon sale (plus interest savings). Charlie and Molly are told by their accountant to see a lawyer to prepare a deed that covers their situation.
  If both Charlie and Molly had contributed the same deposit amount, they would be able to use this document.
  

  This hint is provided by Law Central Legal.

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• Does this document allow me to live in the Property or Mortgage the property?

  Yes. You can:
  • Live in the property;
  • Mortgage your share of the property; and/or
  • Use the property as an investment property.
  

  This hint is provided by Law Central Legal.

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This document has been prepared by the law practice Law Central Legal

Liability limited by a scheme approved under Professional Standards Legislation