If you own property with another person or multiple people, you may have heard the term “tenants in common.” This is a type of ownership where each party owns a specific percentage of the property, and these percentages can be passed down to heirs or sold independently of one another. To ensure that all parties involved understand their rights and responsibilities, it`s essential to have a tenants in common agreement in place.
A tenants in common agreement is a legal document that outlines the terms of ownership for each party, including their share of the property, how expenses will be divided, and how decisions will be made. While it is always best to consult with a lawyer to draft this type of document, there are many templates available online that can help you get started.
Here are some key components to include in a tenants in common agreement:
1. Property Description: This section should describe the property in question, including the address and any other relevant details.
2. Ownership Shares: Each party`s share of ownership should be clearly stated in this section. This could be a percentage or a specific number of units.
3. Decision-Making: It is important to outline how decisions will be made regarding the property, such as maintenance or improvements. This could include a majority vote by the owners or certain responsibilities assigned to specific parties.
4. Expenses: This section should detail how expenses related to the property will be divided among the owners. This could include mortgage payments, property taxes, and maintenance costs.
5. Sale of Shares: If one party wants to sell their share of the property, this section should outline the process for doing so.
6. Death or Incapacity: In the event of the death or incapacity of one of the owners, this section should detail what will happen to that owner`s share of the property.
7. Dispute Resolution: It is important to have a plan in place for resolving any disputes that may arise between the owners. This could include arbitration or mediation.
When using a tenants in common agreement template, be sure to customize it to fit your specific situation. This may include adding additional clauses or modifying existing ones. Also, it`s important to have all parties involved review and sign the agreement to ensure everyone is on the same page.
In conclusion, if you are considering owning property with others, a tenants in common agreement is an important document that can help prevent disputes and protect everyone`s interests. While it`s best to work with a lawyer to create this agreement, using a template can be a helpful starting point. Remember to include all relevant details and customize the agreement to fit your unique situation.