Joint ownership is a legally recognized arrangement between multiple parties to own a single property concurrently. Thanks to this increasingly in-demand form of concurrent real estate, more and more people can afford to buy properties that they would have otherwise been unable to singlehandedly. It provides several benefits to co-owners. However, it also poses certain risks.
Key Characteristics
It resembles a conventional purchase because two or more people will assemble to make a legally binding agreement through a deed instead of a single buyer. After purchasing the asset, each party involved in the agreement will be listed on the deed.
Joint ownership is most associated with its right of ownership, which means that if one of the co-owners dies, their share passes to the other owners. Co-owners have equal rights to use and enjoy the property, and they share subsequent obligations and benefits equally. They have equal responsibilities over the payment of each expense concerning the property.
Joint ownership is a legally binding contract; therefore, none of the owners can terminate the agreement without the consent of the other owners. In the event that an owner wants out, the property must be sold, and the proceedings must be distributed evenly.
Pros and Cons of Joint Ownership in BC Canada
Like every other type of concurrent real estate, joint ownership has several pros and cons. It is, however, important to weigh the advantages and disadvantages before going into joint ownership. Below is a list of the advantages and disadvantages of joint ownership.
Advantages
Joint ownership of properties carries with it certain advantages. Some of these advantages include:
Ability to avoid probate
In joint ownership, the agreements with a right of survivorship would have already laid out how the asset will be distributed upon the untimely death of an owner. This may allow an individual’s estate to avoid costly probate courts. Since the property transfers at death, the individual does not own such property.
Rights to rent and profits
Joint owners are generally entitled to an equal share of the rents and profits that the property receives.
Democratizes home ownership
Since joint ownership is as a result of two or more parties purchasing a single asset, the cost of buying it will be reduced for each owner. Therefore, the more the people who agree to a contract, the less the initial investment will be for each of them.
Equal responsibility
Each party in a joint ownership will share obligations like mortgage, property taxes, maintenance costs, and anything else since there are multiple owners. With more owners, the costs incurred are reduced.
Disadvantages
The followings are the disadvantages of joint ownership in BC Canada:
Lack of flexibility
Agreements are legally binding and somewhat hard to get out of. When a person has joint ownership with others, the consent of each subsequent owner must be sought before making certain arrangements regarding the property. Additionally, if one owner wants out, the property must be sold to share the proceeds equally among subsequent owners.
Equal responsibility
Having equal responsibility is a two-edged sword because, as much as it serves as an advantage, it is also a disadvantage. Each owner must pay their share of taxes, mortgages, and assessments. They must also pay their proportionate share of repairs and maintenance. If one owner doesn’t keep up with their obligations, the responsibility will be passed to subsequent owners.
Lack of inheritance right
Some people may purchase properties with the intention of passing them down to their children or loved ones at the time of their death. However, in joint ownership, agreements give all the rights to the surviving owners. The assets will not be passed down to the heirs. Instead, it will be distributed amongst the remaining owners.
If you have questions about the pros and cons of joint ownership in BC Canada, or if you want to find out if holding properties in joint ownership is in your best interest, or you wish to inquire about any other estate planning issues, contact us at Saanichton Law Group today. A knowledgeable lawyer will be able to advise you which way you should title property and what will be best for your estate planning needs.
Reach out to us either online or by calling us at 250.544.0727
