6 Common Joint Ownership Disputes & Solutions

In US law, joint property ownership occurs when two or more people legally own a property together. With each owner holding equal stakes in the property. 

According to statistics, co-buyers accounted for nearly 26.7% of all US home purchases in 2023. When two people decide to embark on a journey of joint business or ownership, then on the off chance of a dispute can cause a division of assets, affecting them financially.

Joint Ownership Disputes: Your ULTIMATE Guide to Solving Co-Ownership Problems!

Unfortunately, co-owning a property outside marriage can lead to both financial and legal disputes. If you also face joint ownership problems, here are some effective solutions!

Not Being Aware of Your Rights

Many joint ownership legal problems occur because neither owner fully knows their rights and responsibilities.

For example, the right of survivorship is one of the most important clauses in the joint property ownership documents.

It states that any joint owner can designate a beneficiary who will inherit their interest in the property when the existing owner dies.

Solution: 

If there’s a problem related to the right of survivorship or any other minor clause. A partition attorney can easily resolve these disputes. You won’t have to go to any court or engage in lengthy legal battles here.

Usage Rights

Once you all have legally bought the property, it’s time to understand the different forms of usage. The right to share property is the most crucial right associated with property ownership, but many co-owners fail to understand it. 

This happens most often when close friends or family members buy property together, believing they’ll work out the details of the contract later on.

It is important to make the usage rules firm and in the intention to try and handle the usage arrangements in an informal manner.

Solution: 

Depending on where you’ve bought the property, you can hire a local attorney to determine the specifics. For example, you can talk to a real estate attorney California, who will divide the rights based on the spending amount of each co-owner.

In order to avoid any unfair allocation of usage rights, it must be in relation to the economics of ownership. Now, if any of the co-owners are making greater economic and financial contributions to the shared ownership, then they are to have greater usage rights. 

Not Having A Proper Structure

Joint ownership might seem easy, but you must draft many contracts and documents before everyone joins. 

In the title and ownership structure, the basic issues that owners face are specifics of tax money deducting from each owner, the sale or resale of the property, and whether the co-owners protecting against any claims that can be made against them concerning the property.

Solution: 

When you plan to buy a property with one or more other owners, you must be careful about the title to the real estate.

It can be held directly or through a company, trust, or any other entity whose name will appear on the deed. 

• The co-ownership should be regulated, and the requirements apply to creating the shared ownership. 
• The co-owners will be taxed on the money they are making on their shared properties. 
• The co-owners will get a tax deduction on expenses such as mortgage interest, depreciation, and property tax. 

Forceful Selling

Another common issue arises when one co-owner wants to sell the property, but the other co-owner refuses to do so.

This happens most often when two co-owners involving, but such situations may arise regardless of the number of co-owners involvement. 

Many times, forceful selling has to be taken as the last step if everyone wants to sell the property and only one co-owner refuses.

Solution: 

Legally, you can attempt forceful selling of the property involved. A joint owner who wants to sell should try agreeing to proceed or hire a real estate attorney for a partition action.

Contribution Of Services

Many shared ownership agreements involve promising a co-owner a future service or reward in exchange for a reduced contribution to the purchase, like reducing the buying price for that particular co-owner. 

This becomes a problem because the services are not given to the other parties later, or they lead to more costs for all the co-owners, especially if one or more of them are unwilling to continue holding the property.

Solution: 

Treating all the services and rewards at arm’s length is the best solution. The document should clearly outline the scope of work, the time period for performance, how and when compensation is payable, and ultimately, what will happen if one of two co-owners reaches a dissatisfied arrangement. 

So, it is important to avoid any arrangements where the scope of work is decided on a day-to-day basis,  or else where the compensation is based on time spent. As a matter of fact, these types of arrangements lead to disputes. 

Legal costs

If a dispute needs resolving in court, the task can become a big burden for all the co-owners, especially if one or some of them don’t have enough funds to go to court and participate in the legal procedures. 

Moreover, it takes a mental toll on both parties involved. A court-ordered dispute is also time-consuming, and many are resolved after months. 

Solution: 

Look for a reputed real estate attorney or organization that can significantly reduce costs. Many firms offer a fast, cash-based option to help settle disputes.

Resolve Your Joint Ownership Now!

Before drawing up any document or proceeding with joint property ownership, outline every aspect of the property’s rights and uses. It’s important to have everyone in consensus to avoid future problems.

However, it is still useful to have co-ownership rights and duties, although relying heavily on the co-owner agreement to dedicate a response from actual events is unwise. 

Now, even the best agreements must anticipate all the circumstances and apply formulaic responses to those that don’t fit the situation, revealing the best course of action. 

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