How To Buy a Co-Ownership Property

Co-Own.com.au Team


Buying a co-ownership property can be an excellent way to enter the property market or diversify your property portfolio.  We’ve put together this article that shows step by step how to buy a co-ownership property.
 

Here are the 7 steps for buying a co-ownership property:

 

Step 1: To Occupy Or Invest?


Step 2: Finding the Right Property


Step 3: Making an Offer


Step 4: The Co-Ownership Agreement


Step 5: The Shared Ownership Loan


Step 6: Settlement


Step 7: Managing the Co-ownership Relationship


 
 
 

Step 1: To Occupy Or Invest?

 

Before you start looking for a suitable co-ownership property, you must first decide if you would like to Buy to Occupy or Buy to Invest in the property.

 
 

Step 2: Finding the Right Property

 

Once you have made your decision to Occupy or Invest, you can then start your search using our portal. Just enter the suburb, city or state and the search results will then display all available co-ownership properties based on your search criteria.


 

Step 3: Making an Offer


After the purchase price is agreed upon, the contract of sale will be drawn up using the title structure Tennants in Common, normally showing the ownership share being sold as a fraction. eg; 50/100, reflecting 50% ownership.
 

Important: When making an offer to purchase the property, you must include a special condition like the example below in your contract of sale.

 
  • Subject to, all buying and selling parties agreeing to the living arrangements and conditions outlined in the Co-ownership Agreement.


A special condition like the above gives you the option to pull out of the deal if the Co-ownership Agreement can’t be agreed upon.


 

Step 4: The Co-Ownership Agreement

 

The next step is completing a Co-ownership agreement, this is the most important part of the transaction. The agreement sets out each parties legal rights and obligations, it also addresses any foreseeable issues and provides a means of dealing with them. All parties owning the property will need to agree to the co-ownership agreement before the sale can go through. 

 

We've designed a unique Co-ownership Agreement that covers potential issues and protects both co-owning parties. You can get in touch with our legal team to draw up your co-ownership agreement here.


 

Step 5: The Shared Ownership Loan

 

If you require a loan for the property, both co-owners will need to approach a lender that caters for shared ownership loans. We strongly recommend you use Commbank, as they offer a loan package where both your loans will be treated independently. You can find out more and get in touch with a shared loan specialist here.


 

Step 6: Settlement

 

This is by far the most exciting time for all involved. The Owner Occupier will take up residence in the property and the Owner Investor/s with start receiving rent based on their ownership. The Owner Investor will not have access to the premises unless organised with the Owner Occupier, as per the co-ownership agreement.


 

Step 7: Managing the Co-ownership Relationship

 

It’s important to keep a healthy relationship between both co-owners. It’s advised that you use a property manager to manage the property and act as an unbiased mediator for both parties. The property manager would collect the rent owing to the Owner Investor/s, pay bills and coordinate any repairs and maintenance that is needed on the property. You can get in touch with a co-ownership property manager here.


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