Do you have questions about a co-ownership agreement? The opportunity of co-ownership has appeal and benefits for many people.

Qualifying for a mortgage may be difficult alone, but possible with co-ownership. For some, marriage may have brought two people into a co-ownership agreement for a property.

For others, owning a vacation home may have been a dream, and getting a mortgage as a co-owner made the dream a reality.

However, what happens when a couple decides to divorce and have a house they purchased together?

Getting out of a co-ownership agreement can be a complicated and emotional process. However, there are several steps that can help make the process smoother.

Outline the terms of the agreement

It’s important to review the co-ownership agreement. This document will outline the terms of the agreement, including the obligations and responsibilities of each co-owner. It may also provide information on how to dissolve the agreement and what steps need to be taken.

It’s also important to communicate with the other co-owner or co-owners. Have an open and honest discussion about your reasons for wanting to end the co-ownership agreement and see if there is a possibility of reaching a mutual agreement. This could involve selling the property or transferring ownership to one of the co-owners.

If an agreement cannot be reached, the next step is to consider legal options. This may involve seeking the advice of a lawyer or using alternative dispute resolution methods, such as mediation or arbitration.

Process of dissolving a co-ownership agreement

It’s important to keep in mind that the process of dissolving a co-ownership agreement can take time and may involve legal fees. Therefore, it’s important to carefully consider your options and understand the potential consequences of each decision.

It’s also important to be aware of the emotional impact of ending a co-ownership agreement. This may involve ending a friendship or a business relationship, and it’s important to approach the situation with sensitivity and professionalism.

The best way to get out of a co-ownership agreement will depend on the specific circumstances of your situation. It’s recommended to seek legal advice if you are unsure about your options or if you need assistance navigating the process.

Property Co-Ownership

Sell the property. The first option is if both co-owners agree to sell the house.

When one or both owners decide the agreement is no longer feasible, the owners will need to discuss and decide if selling the property will be a beneficial option.

Selling the property is one way to separate and make a clean split from the other party.

To determine the value of the property, have an appraiser determine the fair market value of the house.

Having an appraisal can give homeowners a competitive list price on a property and can increase the chances of selling a property within a reasonable time frame.

Understanding Co-Ownership Agreements: What Are They?

The appraisal may help the owners make the sale faster and receive the optimum value for their property.

The next step will be to agree on the listing price and both co-owners will need to agree on how to handle any offer(s) they receive on the house.

Please keep in mind that any discussions regarding list price and offers must be agreed upon by both owners and may be difficult to reach without an objective opinion. The decision may require the help of a third party.

Once an offer is accepted and a final sale on the house is made, then profits (if any) should split between each of the owners respectively, ending the co-owner agreement.

Tenancy In Common

Buy out the co-owner in an agreement. The second option would buy out the co-owner. If both co-owners cannot agree to sell the property, then one of the co-owners can opt to buy out the other owner’s share of the house.

Once the co-owner receives full ownership of the house, they will be the sole owner of the property and will be able to sell or keep the house if they wish.

Have an appraiser determine the fair market value of the property. This can assist in any negotiations regarding the value of the property.

It is not necessary to have an appraisal, however, this can help provide an objective and reasonable assessment of the property.

To proceed with buying out the other co-owner, the co-owner buying the property will need to refinance the house.

Buy-out option

This process will involve the buying co-owner qualifying for a mortgage based on their sole income. So it will be important for the co-owner to buy the full property to check and confirm that they will qualify for a mortgage prior to any negotiations.

Otherwise, the buy-out option will work for them.

It is often the case for the co-owner not to have enough funds to buy the other co-owner out and /or can’t afford the mortgage payments on their own.

When one co-owner refuses to sell the house, this can also lead to foreclosure by the bank.

If the one co-owner stops paying or refuses to make payments, this will leave the other co-owner unable to make the mortgage payments on their own. If this occurs, the co-owner may need to consider reaching out to a lawyer for help.

Property As Tenants and a Co-Ownership Agreement

Settle the matter in court. It is in both co-owners ‘ best interests to avoid having to go to court on this matter.

However, if no agreement can be made between the two parties, then at this point a court-ordered sale may be the only option to end the co-ownership arrangement and avoid foreclosure on the house.

The court will order the sale of the property and provide direction on how the sale will be done and how the proceeds will be dealt with.

As a note of caution, any bank foreclosure on the house will negatively affect both co-owner’s credits for years and the co-owners will lose any equity that may be on their house.

Key Reasons to Terminate a Co-Ownership Agreement: When is it Time?

For this reason, going to court should be the last option on the table, to avoid and prevent any foreclosure.

Looking back, co-ownership of a property has its benefits, especially for those who could not qualify for a mortgage alone. But what do you do when you need to get out of the agreement?

Selling, buying out, or settling the issue in court are a few of the options you have to consider.

Just be sure to discuss any concerns or opinions about the property openly with the other co-owner before you decide to get out of the co-ownership agreement.

Get professional consultation from a house appraiser, your bank, and/or a lawyer to help you make your decision. And avoid foreclosure, if possible.

Co-Ownership Agreement Legal Help

Going through a divorce or any legal proceeding can be an incredibly stressful and emotional time. By retaining a lawyer, you are entrusting a third party to handle all aspects of your case, which is a big responsibility.

However, it’s important to understand that in order for your law firm to effectively represent you, they need your full cooperation.

When you sign a retainer agreement with us, we expect you to also be responsive to our communications. It’s important that your law firm receives your authorization to proceed with work on your case. Without your input and guidance, they cannot effectively advocate for you.

The Legal Process: Steps to End a Co-Ownership Agreement Properly

Therefore, it’s crucial to maintain open and consistent communication with your law firm to ensure that they have all the information they need to represent you to the best of their ability. By working together, you can achieve a favourable outcome in your legal proceedings.

Therefore, in family law, a client is an essential part of responding to motions.

We will need a declaration (affidavit) from our client to support the facts stated in our motion. We will also need documents signed if we are requesting money from the other party.

Joint Ownership and a Co-Ownership Agreement

Besides needing signatures, we also need to establish a trusting relationship with our clients. A relationship where the client feels comfortable calling to ask ANY question or telling us anything.

Your communication with your attorney is confidential, therefore, it does not help your case to hide anything. We want to know the details of your ex’s behaviour.

How he/she reacts to bad news and to get an understanding of what you really want.

Here at ClearWay Law, we will call you back within 24 business hours. We can also answer your email in the same amount of time.

Potential Consequences: What Happens After Ending a Co-Ownership Agreement?

We pride ourselves on putting our clients first, and in return, all we ask is that you respond to us. Please contact our office to see the difference an attorney can make in your case. Contact us to discuss your co-ownership agreement.

And what about those individuals who are now finding the co-ownership arrangement not meeting up to their expectations?

There may be disagreements with how or when the property is used, issues regarding payments, or perhaps conflicts, and objecting personal views among the owners are making the arrangement difficult.

Whatever the issues may be, there are a few options to get out of a co-ownership arrangement. Let’s take a look at three of these options when considering ending a co-ownership agreement.

Author: Alistair Vigier is the CEO of ClearWay Law

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Ending a Co-Ownership Agreement: The Process