Property Co-Ownership may Give to Rise in Complications
Jan 14, 2019 Real Estate News
Buying a property jointly and having a co-owner of the same comes with many advantages. But the disadvantages are not to be overlooked. The property co-ownership gives you access to higher loan, but that does not mean that it does not come with a cost.
If there arise a dispute, then you and your partner can go for arbitration which allows you both to avoid the long, tedious court case.
When entering such an arrangement, make sure that the person is someone you trust and you know they are going to abide by the rules o the terms and conditions in future. The share of the property, right and ownership must be clear to both the partners before entering such an agreement.
Things to know before you apply for the co-ownership of the property
- If the joint loan comes with a cost as well. If one of the loan applicants fails to pay the mortgage on time, then the entire EMI burden falls on the shoulder of another applicant.
- The credit score affects both the co-owners in case one of the applicants fails to make their share of EMI on time.
- There is a limit to the loan that one can apply for individually. So if you are thinking that applying for a joint loan can help you stretch the limit a lot, then you are in for a disappointment.
- If in the sales deed the share of each applicant is not specified then by default it is assumed that both the co-owners share the equal right on the property. This can cause a problem if in case there is a dispute between you and the co-applicant.
- Selling a property that is owned jointly is a task too. One cannot sell the property at their own free will. There needs to be the approval of other co-applicant as well.
- If in case you decide to sell the property then the co-owner also has the right for pre-emption. This means that the co-owner has all the right to be the first buyer.
What can be done to avoid the complication in future?
If you and your partner have decided to get into the joint ownership of the property, then the share of the property must be established at an early stage. The terms and conditions of the property must also be laid out at the initial stage.If there arise a dispute, then you and your partner can go for arbitration which allows you both to avoid the long, tedious court case.
When entering such an arrangement, make sure that the person is someone you trust and you know they are going to abide by the rules o the terms and conditions in future. The share of the property, right and ownership must be clear to both the partners before entering such an agreement.
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