How to Co‐Own Real Property
Decide on ownership interests., Draft a written agreement., Secure financing., Execute and record your ownership documents.
Step-by-Step Guide
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Step 1: Decide on ownership interests.
Tenancy-in-common is considered one of the most flexible ways to co-own real property because the owners can decide among themselves what percent ownership stake each individual owner has in the property.
You also can allocate expenses to maintain or develop the property according to the division of ownership interests, or according to the interest and expertise of the owners.
For example, suppose you and a colleague are buying a parcel of land to build condos.
You have interest in sustainable building materials and energy efficiency, while your friend has expertise building luxury interiors and community amenities.
In that scenario, as tenants-in-common you could divide the control and expense of building those things and accordingly give your friend the larger interest she would need to construct swimming pools and lakes surrounding the condos, while you could focus on the land where the condos would be built. -
Step 2: Draft a written agreement.
Any decisions you make regarding your ownership interests and how you will share the costs and responsibilities of maintaining the property should be put in writing so they become legally binding.Your written agreement can be used to resolve any disputes that arise later on.
Even though you and your partner may be on wonderful terms now – after all, you're buying real property together – things may sour down the road.
Besides the ownership interests the two of you have worked out, your written agreement discusses property expenses, what might happen if one of you decides to sell your interest, and how disputes will be resolved. , Where a mortgage is necessary, typically co-owners who plan to take title to a property as tenants in common must each obtain their own financing for the portion of the property they will own.People intending to purchase land as tenants-in-common can take out a joint mortgage on the whole property, then pay a portion of the mortgage payment each month according to their ownership interest.
However, as tenants-in-common you also have the ability to get separate mortgages that cover your fractional interest in the property.
Separate mortgages can be a good idea if you and your partner have significantly different credit and income.
Keep in mind that if you purchase two separate mortgages, each of you potentially will be responsible for separate down payments.
The total of those two separate down payments may be greater than the single down payment you'd have to put down on a joint mortgage. , All deeds and ownership agreements must be signed by all co-owners and recorded with the county recorder in the county where the property is located.As tenants-in-common, all owners don't have to sign the ownership documents at the same time.
You can execute the deed and obtain financing independently.
Co-owning the land as tenants-in-common also allows you to add new partners later on if you decide it's necessary – you'll just have to modify or amend your co-ownership agreement to account for the new owner.
For example, suppose you and your friend decide to bring a new partner into your condo development project who has skills in marketing and promotion to help you sell units in your new development.
As tenants-in-common, you can allocate a percent ownership in the land to your new partner if you want.
However, keep in mind any financing you obtained does not take that additional owner into account. -
Step 3: Secure financing.
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Step 4: Execute and record your ownership documents.
Detailed Guide
Tenancy-in-common is considered one of the most flexible ways to co-own real property because the owners can decide among themselves what percent ownership stake each individual owner has in the property.
You also can allocate expenses to maintain or develop the property according to the division of ownership interests, or according to the interest and expertise of the owners.
For example, suppose you and a colleague are buying a parcel of land to build condos.
You have interest in sustainable building materials and energy efficiency, while your friend has expertise building luxury interiors and community amenities.
In that scenario, as tenants-in-common you could divide the control and expense of building those things and accordingly give your friend the larger interest she would need to construct swimming pools and lakes surrounding the condos, while you could focus on the land where the condos would be built.
Any decisions you make regarding your ownership interests and how you will share the costs and responsibilities of maintaining the property should be put in writing so they become legally binding.Your written agreement can be used to resolve any disputes that arise later on.
Even though you and your partner may be on wonderful terms now – after all, you're buying real property together – things may sour down the road.
Besides the ownership interests the two of you have worked out, your written agreement discusses property expenses, what might happen if one of you decides to sell your interest, and how disputes will be resolved. , Where a mortgage is necessary, typically co-owners who plan to take title to a property as tenants in common must each obtain their own financing for the portion of the property they will own.People intending to purchase land as tenants-in-common can take out a joint mortgage on the whole property, then pay a portion of the mortgage payment each month according to their ownership interest.
However, as tenants-in-common you also have the ability to get separate mortgages that cover your fractional interest in the property.
Separate mortgages can be a good idea if you and your partner have significantly different credit and income.
Keep in mind that if you purchase two separate mortgages, each of you potentially will be responsible for separate down payments.
The total of those two separate down payments may be greater than the single down payment you'd have to put down on a joint mortgage. , All deeds and ownership agreements must be signed by all co-owners and recorded with the county recorder in the county where the property is located.As tenants-in-common, all owners don't have to sign the ownership documents at the same time.
You can execute the deed and obtain financing independently.
Co-owning the land as tenants-in-common also allows you to add new partners later on if you decide it's necessary – you'll just have to modify or amend your co-ownership agreement to account for the new owner.
For example, suppose you and your friend decide to bring a new partner into your condo development project who has skills in marketing and promotion to help you sell units in your new development.
As tenants-in-common, you can allocate a percent ownership in the land to your new partner if you want.
However, keep in mind any financing you obtained does not take that additional owner into account.
About the Author
Marie Stevens
Specializes in breaking down complex crafts topics into simple steps.
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