Co-ownership of property: Everything you need to know

Article summary

• Co-ownership is when two or more people share ownership of a bond.
• It provides a way for younger homebuyers to get a foot on the property ladder.
• Co-owners share expenses and admin.
• Co-owners all have to agree on any decisions regarding the property.
• The drawing of the co-ownership contract is an essential step in the process.

Whether you’re purchasing a property together with associates, friends, family members, or a life partner; co-owning a property can be an effective way of getting on the property ladder. Here’s what you need to know.

What is property co-ownership?

It’s when two or more people purchase a property together.

There’s no limit to how many can co-own a property.

A joint bond is a popular option for unmarried couples.

The benefits of property co-ownership

• It’s a way for young people to get a foot on the property ladder, especially in a climate where the expense of properties is putting many young homebuyers off.
• Property co-owners share the costs of maintaining and administering the property.
• The risks of investment are shared.
• The bank is more likely to approve the bond as the various owners guarantee each others’ share of the bond.

The drawbacks

• The more people involved in co-ownership, the more admin is required.
• The more co-owners, the smaller the share of the profit each co-owner gets.
• Decisions have to be agreed on by all co-owners, which can hold up renovations or other decisions regarding the property.
• Complications if one investor decides to sell.
• Complications if two or more of the investors fall out.

The importance of the contract

All parties need to sign a co-ownership contract. Drawing up this contract is the most important step in the process, and you should definitely seek legal advice if you’re engaging in co-ownership.

The contract should include:

• What is the objective of buying the property together?
• What happens if one co-owner wants to sell their share?
• How will decisions regarding the management of the property be made?
• Who takes responsibility for managing the property?
• The financial contribution required from each member.
• Conditions regarding sharing of the bond and access to the bond.

What you should know about joint bond ownership

• In the case where two people are sharing the property, it’s assumed that each owns 50% of the property.
• The credit records of all applicants will be assessed.
• A prime applicant must be determined, even though both parties will be vetted.

Assess your chances of qualifying for a bond

Whether applying for co-ownership or single ownership of a bond, it helps to know your financial situation.

You can determine this by getting prequalified with ooba Home Loans. We’ll assess your credit record and provide an estimation of what you can afford.

You can get prequalified by contacting an expert at ooba Home Loans or by using our free, online prequalification tool, the Bond Indicator.