What is Co-ownership?

Co-Ownership: What You Need to Know

What is Co-Ownership?
Co-ownership means two or more people jointly own a property. All owners are listed on the title and hold a percentage of ownership, entering into both a legal and financial partnership.

Why is co-ownership on the rise?

The practice of co-ownership has traditionally taken the form of a group of friends or family members coming together to buy a second home or a child who inherits a house from their parents or grandparents. While co-ownership isn’t a new concept, it has become a more viable path to second home ownership. As real estate prices continue to rise, it can make more financial sense to combine finances with other buyers and share the costs of buying and owning a home, especially for those who feel priced out of a home in the current market.

Types of Co-Ownership

• Tenancy in Common (TIC): Unequal shares allowed; no survivorship rights unless specified.

• Joint Tenancy (JTWROS): Equal shares; includes survivorship rights if all four unities (time, title, interest, possession) are met.

• Community Property: Available to married couples in 9 states; survivorship rights must be stated.

• Tenancy by the Entirety (TBE): For married couples; includes survivorship and treats couple as one legal owner.

Pros

• Affordable path to ownership

• Deeded equity and usage rights

• Shared costs and responsibilities

Cons

• Relationship risks and coordination challenges

• Limited financing options

• Less decision-making freedom

• Shared financial liability

Getting Started
Create a co-ownership agreement that defines:

• Ownership structure

• Roles and responsibilities

• Payment and maintenance plans

• Exit strategy and decision-making rules

Consult a real estate attorney to ensure clarity and legal coverage.

Types of Co-Owners
You can co-own with family, friends, or strangers. The type of relationship may influence the best ownership model (e.g., TIC vs. TBE).

Mortgages & Financing
Co-owners usually take one mortgage. Lenders consider combined income and credit, but the lowest credit score often sets terms. Some TICs allow fractional loans, which limit liability to your share but may come with higher interest.

Co-Buyer vs. Co-Signer
A co-buyer shares ownership and payments. A co-signer backs the loan financially but has no ownership rights.

Selling a Co-Owned Home

• If all owners agree, the home is sold together.

• Individual owners can sell their share (depending on ownership type), but usually need agreement from others.

Co-Ownership vs. Fractional Ownership
Both involve shared, deeded ownership and costs. Fractional ownership often relates to resort properties, while co-ownership applies to private homes.

Key Takeaways

• Co-ownership makes property more accessible and affordable.

• Different legal structures define rights, responsibilities, and survivorship.

• Proper agreements and planning are essential for smooth co-ownership.

• Selling and financing have added complexity but also offer flexibility.