Tenants in Common Agreement Template: Co-Ownership Terms

Tenants in Common Agreement Template

This Tenants in Common Agreement (“Agreement”) is entered into as of [Effective Date], by and among:

Owner 1: [Full Legal Name], of [Address]

Owner 2: [Full Legal Name], of [Address]

Owner 3, if applicable: [Full Legal Name], of [Address]

Each person signing this Agreement is referred to as an “Owner,” and together they are referred to as the “Owners.”

1. Property

The Owners hold or intend to hold title to the following real property as tenants in common:

Property Address: [Property Address]

City, State, ZIP Code: [City, State, ZIP Code]

Legal Description:

[Insert full legal description]

Parcel Number, if applicable: [Parcel Number]

2. Ownership Interests

The Owners agree that their beneficial ownership interests in the property are as follows:

Owner 1: [Percentage %]

Owner 2: [Percentage %]

Owner 3, if applicable: [Percentage %]

Unless otherwise stated in writing, each Owner’s rights to sale proceeds, income, and equity in the property will be based on these ownership percentages.

3. Purpose of Ownership

The property will be held for the following purpose:

☐ Primary residence

☐ Secondary residence

☐ Rental or investment property

☐ Family use

☐ Other: [Describe]

Additional use terms:

[Describe intended use]

4. Contributions at Purchase

The Owners contributed the following toward the purchase or acquisition of the property:

Owner 1: [Dollar Amount / Description]

Owner 2: [Dollar Amount / Description]

Owner 3: [Dollar Amount / Description]

These contributions include, if applicable:

• down payment;

• closing costs;

• loan fees;

• prepaid taxes or insurance; and

• other acquisition costs.

down payment;

closing costs;

loan fees;

prepaid taxes or insurance; and

other acquisition costs.

If unequal initial contributions will affect reimbursement, sale proceeds, or capital account treatment, state that here:

[Describe arrangement or write “Not applicable”]

5. Mortgage and Financing

The property is financed as follows:

Lender: [Lender Name]

Loan Number, if applicable: [Number]

Original Loan Amount: [Amount]

Responsibility for mortgage payments will be allocated as follows:

[Describe whether by ownership percentage, equal shares, or another formula]

If one Owner is not a borrower on the loan but will still contribute to payments, that arrangement is as follows:

[Describe]

6. Ongoing Expenses

The Owners agree to share the following ongoing expenses in the manner stated below:

• mortgage principal and interest: [Allocation method]

• property taxes: [Allocation method]

• insurance premiums: [Allocation method]

• utilities: [Allocation method]

• association dues: [Allocation method]

• routine maintenance: [Allocation method]

• repairs and improvements: [Allocation method]

• other expenses: [Describe]

mortgage principal and interest: [Allocation method]

property taxes: [Allocation method]

insurance premiums: [Allocation method]

utilities: [Allocation method]

association dues: [Allocation method]

routine maintenance: [Allocation method]

repairs and improvements: [Allocation method]

other expenses: [Describe]

Unless otherwise agreed in writing, each Owner must pay that Owner’s share within [Number] days after notice or when the expense becomes due.

7. Possession and Use

The Owners agree that possession and use of the property will be handled as follows:

[Describe whether all Owners may occupy, whether one Owner has primary occupancy rights, or whether the property will be rented]

Additional occupancy rules, if any:

• bedrooms or spaces assigned: [Describe]

• guest rules: [Describe]

• short-term rental rules: [Describe]

• pet rules: [Describe]

• parking or storage rules: [Describe]

bedrooms or spaces assigned: [Describe]

guest rules: [Describe]

short-term rental rules: [Describe]

pet rules: [Describe]

parking or storage rules: [Describe]

8. Management and Decisions

The Owners will make decisions relating to the property as follows:

Routine matters may be handled by:

[Name of Owner / property manager / majority vote / other]

Major decisions requiring approval include:

• sale of the property;

• refinancing;

• lease terms longer than [Number] months;

• major repair or capital improvement above [Dollar Amount];

• use of the property as collateral; and

• any other major action: [Describe]

sale of the property;

refinancing;

lease terms longer than [Number] months;

major repair or capital improvement above [Dollar Amount];

use of the property as collateral; and

any other major action: [Describe]

Approval standard for major decisions:

☐ Unanimous consent

☐ Majority by ownership percentage

☐ Majority by number of Owners

☐ Other: [Describe]

9. Repairs and Improvements

Routine repairs will be handled as follows:

[Describe process]

Emergency repairs may be authorized by:

[Name / any Owner / manager / other]

Capital improvements or non-routine upgrades must be approved as stated in Section 8 unless immediate action is necessary to prevent damage, injury, legal violation, or loss of insurance coverage.

If one Owner pays more than that Owner’s required share for approved work, reimbursement will be handled as follows:

10. Records and Accounting

The Owners will keep reasonable records relating to the property, including:

• mortgage statements;

• tax bills;

• insurance documents;

• repair invoices;

• rental income records, if applicable; and

• contribution and reimbursement records.

mortgage statements;

tax bills;

insurance documents;

repair invoices;

rental income records, if applicable; and

contribution and reimbursement records.

Access to records will be provided to each Owner upon reasonable request.

11. Default by an Owner

An Owner is in default under this Agreement if that Owner fails to pay required amounts, materially violates the use rules, or materially breaches another obligation under this Agreement.

If an Owner defaults, the non-defaulting Owner or Owners may:

• give written notice of the default;

• advance funds to protect the property;

• seek reimbursement with interest at [Rate]% per year or the maximum rate allowed by law, whichever is less;

• suspend discretionary use rights if permitted by law and this Agreement; and

• pursue any other rights allowed by this Agreement or applicable law.

give written notice of the default;

advance funds to protect the property;

seek reimbursement with interest at [Rate]% per year or the maximum rate allowed by law, whichever is less;

suspend discretionary use rights if permitted by law and this Agreement; and

pursue any other rights allowed by this Agreement or applicable law.

Cure period after notice: [Number] days

12. Transfer of Interest

No Owner may sell, assign, gift, pledge, or otherwise transfer all or part of that Owner’s interest in the property except as allowed under this Agreement.

Before transferring to a third party, the selling Owner must first provide written notice to the other Owners stating:

• the interest to be transferred;

• the proposed price and material terms; and

• the proposed closing date.

the interest to be transferred;

the proposed price and material terms; and

the proposed closing date.

13. Right of First Refusal

Before a transfer to a third party may occur, the non-selling Owner or Owners shall have a right of first refusal to purchase the offered interest on the same material terms stated in the transfer notice.

The non-selling Owner or Owners must respond within [Number] days after receiving notice.

If more than one remaining Owner elects to purchase, the offered interest will be divided:

☐ In proportion to existing ownership interests

☐ Equally among electing Owners

☐ As otherwise agreed in writing

14. Buyout and Exit Procedures

If an Owner wants to exit the co-ownership and no third-party sale is completed, the Owners may proceed with a buyout as follows:

Purchase price determination:

☐ Agreed value

☐ Appraisal by one appraiser

☐ Average of two appraisals

☐ Other formula: [Describe]

Closing period for buyout: [Number] days after value is determined

If no buyout occurs within the required time, the Owners may:

[Describe whether the property must be listed for sale, partition may be sought, or another process applies]

15. Sale of Entire Property

The entire property may be sold upon:

☐ Unanimous agreement

☐ Approval under the decision rule stated in Section 8

☐ Triggering event described here: [Describe]

If the property is sold, net proceeds will be distributed as follows:

• first, payment of selling costs, closing costs, liens, and debts secured by the property;

• second, reimbursement of approved advances or unequal contributions to the extent stated in this Agreement;

• third, the remaining balance to the Owners according to their ownership percentages unless otherwise stated here:

first, payment of selling costs, closing costs, liens, and debts secured by the property;

second, reimbursement of approved advances or unequal contributions to the extent stated in this Agreement;

third, the remaining balance to the Owners according to their ownership percentages unless otherwise stated here:

[Describe any different allocation]

16. Death, Incapacity, or Bankruptcy of an Owner

If an Owner dies, becomes incapacitated, files bankruptcy, or has that Owner’s interest affected by creditor action, the remaining Owners may exercise any rights stated in this Agreement, including a buyout right if applicable.

Any special rule for these events is as follows:

17. Insurance and Risk

The property will be insured as follows:

[Describe hazard, liability, flood, landlord, or other insurance]

The Owners will contribute to insurance premiums as provided in Section 6.

If the property is damaged or destroyed, insurance proceeds will be applied as follows:

[Repair / payoff / sale / other]

18. Dispute Resolution

If a dispute arises under this Agreement, the Owners will first attempt in good faith to resolve it through discussion.

If the dispute is not resolved, it will be handled by:

☐ Mediation

☐ Arbitration

☐ Court action

☐ Other: [Describe]

Location for dispute resolution: [City, State]

19. Governing Law

This Agreement will be governed by the laws of [State/Country], without regard to conflict of laws rules, except where mandatory real estate or title law applies.

20. Entire Agreement

This Agreement states the full understanding among the Owners regarding the property described above and supersedes prior oral or written discussions on that subject.

Any amendment must be in writing and signed by all Owners.

21. Signatures

By signing below, each Owner agrees to the terms of this Tenants in Common Agreement.

Owner 1:

Signature: __________________________

Name: [Full Legal Name]

Date: [Date]

Owner 2:

Owner 3, if applicable:

Optional Notary Acknowledgment:

State of [State]

County of [County]

On this [Day] day of [Month], [Year], before me, the undersigned notary public, personally appeared [Name of Signer(s)], known to me or satisfactorily proven to be the person or persons whose name or names are subscribed to this document, and acknowledged that they executed it for the purposes stated herein.

Notary Public Signature: __________________________

Printed Name: [Notary Name]

My Commission Expires: [Date]

Notary Seal: _________________________