When two or more people, all of whom are not married to anyone in the same group, decide to own property jointly, they have the option of signing the tenancy in common agreement. Co-signing this agreement is a popular option for two or more people who wish to buy property together as it helps resolve a lot of issues that may arise in the future.
What is Tenancy in Common?
Often, owing to high prices on property for sale, some like-minded people pool their funds and choose to buy a house together. The advantage? Owning property jointly can often be pretty cheap and you don't need to take a loan for it. Hence people very often choose to pick up a lucrative looking offer of owning property with other people.
This is where tenancy in common comes in. Although known as tenancy, the people involved in these are owners of the property that they purchase. To this end, they put up a template which is basically the rules of tenancy that they jointly agree upon. Tenancy in common agreement is like any other agreement, which is accepted by all the parties involved in it and is then signed signaling their mutual accord. In the agreement, they set the basic ground rules for the ownership of the property. The agreement mentions each one's share in the property and to whom this share will be transferred in case of the death of the person. All co-owners usually put an equal amount of money to finance the purchase and hence each enjoys an equal share in the ownership.
The agreement also lists out the rights of the co-owners. Not all co-owners generally live in the purchased property at the same time. So the duration of occupancy is one of the things that needs to be ironed out. Just how long should one partner be allowed to enjoy occupancy of the property? The second very important detail discussed in the agreement is the actions that can take place on the co-owned property. Suppose one partner feels that an extension or some home improvement activity would be in order, what rights do the other partners enjoy with respect to this activity? The tenancy in common agreement, thirdly, takes into consideration the buy-out clause of the co-owners. Often since the owners don't want an outsider to be part of the tenancy in common, when one partner wishes to buy out his ownership of the house, he may be obliged to offer first preference to the existing owners. On the other hand, the co-owners may also agree to not sell their share at all. And the last little matter that the tenancy in common agreement discusses is what happens at the death of the co-owner. The last will and testament of the co-owner generally has the final say on what happens to his share in the house at the time of his death. The most popular options are handing it down to a surviving family member or spreading the ownership equally among the other members.
It is best that you avail the services of a lawyer to draft the agreement template because it is indeed, like any other document relating to property, one which needs to be carefully drafted.
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