If you are purchasing a property with your partner, a friend or a family member, it is a good idea to establish a co-ownership agreement. This applies whether you are buying an apartment, a house, a vacation home or similar properties.
A co-ownership agreement is a written agreement that provides security by establishing how you can manage the shared property – including how any disagreements should be handled. The co-ownership agreement will regulate the ownership between you. Therefore, you can jointly establish clear guidelines for how you wish to manage the ongoing ownership and any potential conflicts that may arise between you in the future.
We recommend that all individuals who are not married establish a co-ownership agreement. Purchasing a property is a significant financial decision, so a clear agreement is essential when buying a property together. It can be difficult to anticipate and understand the consequences of later disagreements, and with a co-ownership agreement, you establish clear guidelines for the ownership of your shared property and how you can best divide and split up the ownership if necessary. This can prevent conflicts between you and increase the financial security of your individual investments.
Should disagreements arise, it is advantageous that you have already decided on how the conflict should be resolved, as otherwise, you will be bound by the general rules of the law, which may not necessarily be the best solution in your situation. You also avoid the uncertainty that can arise between you if you do not have a clear agreement regarding your ownership.
A co-ownership agreement is valid when you reach an agreement, whether orally or in writing. However, oral agreements or self-drafted written documents entail many risks. Oral agreements are very difficult to prove in practice, and self-drafted written agreements can bring difficulties regarding the interpretation and typically do not cover all potential situations that may occur in the future.
We highly recommend seeking legal assistance from an attorney who can draft a written co-ownership agreement to be signed by all owners.
