Co-owning A Property And The Bond
Whether for financial or other reasons, people often invest in property as co-owners, whereby each owns an undivided share in the property. Many such buyers take the sound precaution to draw up a co-ownership agreement.
Buyers in this situation should not forget that no matter what they agree to with regards to split in shares in the property, maintenance, occupation or income from the property, their agreement will not bind third parties such as banks or municipalities.
For example, the bank that grants the home loan will generally insist that both (or all co-owners) agree to be ‘jointly and severally’ liable to repay that loan. This allows the bank to recover the debt from all of the debtors in proportion to their shares or, if necessary, to recover the whole amount from any one of them. So, if one co-owner should fall on hard times or stop paying for any reason, the others will be required to make up the difference.
For assistance or advice in such transactions, contact your conveyancer before putting pen to paper.