Inheriting Property Jointly With Other Beneficiaries And The Importance Of Co-Ownership Agreements
Whenever property is ‘co-owned’ by anyone other than a husband and wife, I always strongly recommend that a Co-Ownership Agreement be put in place. Family cabins at the lake, Big White ski condos, property inherited by estranged beneficiaries and even residential homes where parents are on title with their child/partner in a two-suite home, are all VERY common scenarios where title can potentially be held by several people. These people may, at some point in the future, have different needs/wants in relation to the jointly owned property. In addition to different needs/wants in relation to the property, they may no longer have an amicable relationship with one another – a recipe for disaster.
Joint ownership of property is extremely common. If the parties wish to avoid the myriad of problems that may await them in the future, it is best to set out in writing how and when the property may be sold.
A Co-Ownership Agreement will set out the interests held, the decision making in relation to the land, how expenses are paid, who uses the land and when, the distribution of the proceeds of any sale, the right of first refusal of Co-Owners to buy each other out in the event that one wants to sell and so on and so forth. Essentially, this type of Agreement can address any number of unique issues that may be foreseen in relation to a specific property.
The best time to enter into a Co-Ownership Agreement is of course at that outset of the co-owning relationship, when it is most likely that all parties want the same thing and get along. They are excited for what the future holds, rather than antagonized by the other co-owners. That being said, it is never too late. It is much better to define interests amicably in a Co-Ownership Agreement, than rely on the court process in the event of a breakdown of the co-owning relationship. In the absence of a settlement or a written agreement governing the situation, the only recourse is the Courts.
The Partition of Property Act provides the Court with authority to “direct a sale of the property and distribution of the proceeds”. The Co-Owners are at the mercy of the unfettered discretion of the Judge in this situation, so it is much better to agree upon these matters at the commencement of the co-owning relationship.
This is provided as information ONLY; it should NOT be construed as legal advice. You should consult with a lawyer to provide you with specific advice for your own situation. For more information on estate planning/incapacity planning and to discuss your specific circumstances, please contact Vanessa DeDominicis on 250-869-1140 or email@example.com. Vanessa practices in the area of Wills and Estates at Pushor Mitchell LLP in Kelowna and would be more than happy to assist you.