Tenancy in Common Sell Agreement: What You Need to Know
Tenancy in common is a form of property ownership in which two or more individuals own a property together with undivided interests. In other words, each owner has a specific percentage of ownership of the property rather than owning a specific portion of it. Tenancy in common is a popular option for individuals who want to purchase a property with others and have the flexibility to sell their portion of the property at any time.
If you are considering purchasing a property with others and choosing tenancy in common as your form of ownership, it is important to understand what a tenancy in common sell agreement is and how it works.
What is a Tenancy in Common Sell Agreement?
A tenancy in common sell agreement is a legal document that outlines the terms and conditions of how the property will be sold if one of the owners decides to sell their portion of the property. This agreement is crucial to have in place to ensure that each owner`s rights and interests are protected during the sale process.
The agreement should include specifics on how the property will be valued and how the proceeds from the sale will be divided among co-owners. It should also address any potential conflicts that may arise during the sale process.
Why is a Tenancy in Common Sell Agreement Important?
Without a tenancy in common sell agreement, the sale of the property can become complicated and potentially contentious. For example, if one co-owner decides to sell their portion of the property without the consent of the other owners, it may result in legal disputes that can be costly and time-consuming.
Having a sell agreement in place can help prevent these types of conflicts from arising and ensure a smoother sales process. It also provides clear guidelines on how the proceeds of the sale will be divided among the co-owners, thereby reducing the likelihood of disputes over how the money will be distributed.
What Should be Included in a Tenancy in Common Sell Agreement?
There are several important provisions that should be included in a tenancy in common sell agreement, including:
1. Valuation Method: The agreement should specify how the property will be valued when one co-owner decides to sell their portion. This can be done by hiring an independent appraiser or by using a predetermined formula.
2. Offer Process: The agreement should outline the process for submitting an offer to purchase the property. This may include a requirement for written offers and a timeline for reviewing and responding to offers.
3. Right of First Refusal: The agreement may include a right of first refusal clause, which allows the other co-owners to match any offer that is made by an outside party. This can help ensure that the property remains under the control of the original co-owners.
4. Division of Proceeds: The agreement should specify how the proceeds from the sale will be divided among the co-owners. This can be based on the percentage of ownership each co-owner has or on a predetermined formula.
5. Dispute Resolution: The agreement should outline the process for resolving any disputes that may arise during the sale process.
Conclusion
A tenancy in common sell agreement is a crucial component of owning property with others. It provides clear guidelines on how the property will be sold, how the proceeds will be divided, and what happens if conflicts arise during the sale process. If you are considering purchasing a property with others, make sure to consult with an experienced real estate attorney to ensure that you have a thorough and enforceable tenancy in common sell agreement in place.
