CO-OWNERSHIP AGREEMENT
THIS AGREEMENT is made on the ………….day of………………………20……., (hereinafter, “Effective Date”) entered into by ___________________ (hereinafter the First Party”) and ________________________ (hereinafter the “Second Party”) collectively referred to as the “Parties” or individually as the “Party”) and includes that Party’s successors and assigns.
Whereas, the Parties have together purchased the premises known as ____________________________________________, by deed dated and recorded with ________________ County Registry of Deeds in Book ___________ Page ________ (the “Property”); and
Whereas, the Parties desire to confirm in this Agreement the terms and conditions of their co-ownership;
Therefore, in consideration of the mutual promises exchanged herein by the Parties and for other good and valuable consideration, each to the other given, the Parties agree to the following:
ARTICLE 1 – OWNERSHIP OF PERSONAL PROPERTY
1. First Party covenants and agrees that all personal property now owned by Second Party, of whatever nature and wherever located and any property which Second Party may hereafter acquire, shall be and remain Second Party’s sole and separate property to use and dispose of as Second Party sees fit as if no agreement had been entered into.
2. Second Party covenants and agrees that all property now owned by First Party, of whatever nature and wherever located and any property which First Party may hereafter acquire, shall be and remain First Party’s sole and separate property to use and dispose of as First Party sees fit as if no agreement had been entered into.
3. A full and complete disclosure of all personal property owned by First Party and located on the Property has been made by First Party to Second Party, and the list of such property is attached hereto as Exhibit A and made a part hereof.
A description of any property acquired by First Party after the date of this agreement will be added to Exhibit A together with the details of any such acquisitions and acknowledgments thereof by First Party and Second Party as signified by their initials.
4. A full and complete disclosure of all personal property owned by Second Party and located on the Property has been made by Second Party to First Party, and the list of such property is attached hereto as Exhibit B and made a part hereof.
A description of any property acquired by Second Party after the date of this agreement will be added to Exhibit B together with the details of any such acquisitions and acknowledgments thereof by Second Party and First Party as signified by their initials
5.The Parties covenant and agreed that the property described in Exhibit C attached hereto and made a part hereof is owned jointly by both Parties; and
The Parties covenant and agreed that property, acquired after the date of this agreement, which both Parties execute shall be jointly held will be described in an addendum or addenda Exhibit C, together with the dates of any such acquisitions and the acknowledgments thereof by the Parties as signified by their initials.
ARTICLE II – REAL PROPERTY
Whereas Second Party and First Party hereby make known that each has furnished equal consideration for the purchase of the property, in the amount of $__________________ and
Whereas the Parties desire to establish their mutual rights and obligations regarding to ownership of the property:
Now, therefore, for good and valuable consideration, each to the other given, the Parties mutually agree as follows:
6. PROPERTY
First Party and Second Party hold title to the Property as tenants in common, each owning and undivided fifty percent (50%) interest.
7. GENERAL RIGHTS AND OBLIGATIONS
The Parties shall have such rights and duties as tenants in common among themselves and with respect to third persons as are determined by the laws of ____________state , except as otherwise provided herein. To the extent permitted by law, the provisions of this agreement shall take precedence over those provisions of the state law which described the incidents of tenancy in common, and shall be binding upon the Parties.
8. OPERATING EXPENSES
All expenses relating to the ownership, maintenance, operation and use of the Property, including taxes, assessments, utility charges, insurance premium, repairs, improvements, items purchased by agreement for use in maintaining the Property, and any other payments taken jointly by the parties shall be borne one half by First Party and one-half by Second Party, except as otherwise expressly provided herein. Any tax deductions attributable to such expenses or payments shall be available one-half to First Party and one-half to Second Party except as otherwise expressly provided herein. First Party and Second Party each agree to indemnify and reimburse the other for such monies suspended by the other on account of such indebtedness at any cost incurred on account thereof as exceeding that Party’s respective share of the total of such indebtedness, including interest and other charges accrued thereon.
9. REQUIRED PAYMENTS
All payments made with respect to the property such as taxes, assessments and insurance premiums shall be made jointly by the Parties on or before the applicable due date with each such party contributing that portion of each such payment required under paragraph 8 of this agreement. This paragraph shall apply whether or not a party is occupying the Property.
10. INCOME AND PROCEEDS
All income, issues and profits from the Property, including, without implied limitation, rents, the proceeds from the sale of the Property or any part thereof, and all payments with respect to insurance policies on the property, shall be divided one-half to First Party and one-half to Second Party except as otherwise expressly provided herein.
11. EXPENSE RECONCILIATION
There shall be at least quarterly a reconciliation of all common expenses, without regard to the monetary value of any personal labor of either party, unless mutually agreed upon ahead of time. If, during the course of said quarterly reconciliation, it appears to the Parties that the contributions made by one of them exceeds those of the other, or if, pursuant to paragraph 21(A) below, the six-month period set forth therein has expired, and the Parties agree that they will together attached to this Agreement an Exhibit D, which shall set forth their adjusted, respective shares of the equity in the Property. Such adjustments which are made from time to time shall reflect the most current contributions to the maintenance of the Property as exists between the Parties. The signature of each party upon this Exhibit D, shall indicate the assent of each party to said Exhibit D and the signatory thereto shall be forever barred from contesting said Exhibit D.
12. LIENS OR ENCUMBRANCES
Neither First Party or Second Party shall directly or indirectly, voluntarily or involuntarily, suffer or permit any lien or encumbrance to attached to their respective interests in the Property without the prior written consent of the other.
A. Repairs and capital improvements:
(i) Minor repairs or improvements: minor repairs or capital improvements shall be defined as those costing less than $1000 per item. Minor purchases for household use shall be defined as those costing less than $500 per item. Minor repairs or capital improvements and minor purchases for household use may be made by either party without the prior approval of the other party.
(ii) Major repairs or improvement: major repairs or capital improvement shall be defined as those costing more than $1000 per item or more. Major purchases for household use, shall be defined as those costing $500 per item or more. Major repairs, capital improvements or purchases for household use, may be made only with the prior written approval of both parties.
(iii) Emergency repairs: emergency repairs shall be defined as those repairs necessary to prevent serious and permanent damage to the property. Emergency repairs may be made by either party without the prior approval of the other party but only to the extent required to prevent such serious and permanent damage.
(iv) Reimbursement: a party making an expenditure or incurring an indebtedness for repairs, capital improvements, or purchases for household use, shall be entitled to reimbursement from the other party in accordance with the provisions of paragraph 12(A)(i) and 12(A)(ii), except that where prior approval is required, the party making such expenditure or occurring such indebtedness without obtaining such approval shall not be entitled to reimbursement and shall bear the expense alone, without receiving any credit whatsoever for having done so, either at the time of the sale of the property or at any other time. As used in this paragraph 12, terms “repairs” and “capital improvements” shall have the same meaning as set forth in the regulations of the Internal Revenue Code as are in effect at the time said repair or capital improvement is made.
13. REMEDY FOR NONPAYMENT.
If either party shall fail to make the payments specified in this agreement such as specified in Section 8 and 9, within 30 days of the time required (or within a lesser time if payment must be made within such lesser time to prevent a default by the Parties on any obligation or under any material agreements relating to the property), the other party may make such payments on behalf of the party who fails to make such payments (the “the Defaulting party”). The Defaulting party shall be required to repay this amount in 100 days. The party who makes such payments on behalf of the defaulting party shall have a lien against the defaulting party’s interest in the Property in an amount equal to the aggregate of all such payments made by the non-defaulting party on behalf of the defaulting party. Upon any sale of the Property under paragraph 14, unpaid amounts shall be deducted from the net proceeds of the sale and paid to the non-defaulting party with a priority in the distribution of the proceeds of the sale as specified in paragraph 16. Upon a buyout of one party of the other party’s interest under paragraph 15, such amounts shall be charged against the defaulting party in accordance with the provisions of subparagraph D of paragraph 16.
14. SALE OF PROPERTY
A. Definitions: the following definitions shall apply within this paragraph:
(i) the “Sale Period” shall be the period beginning on the expiration of the option period and ending at the midnight of the last day of the fifth full week following the expiration of the option period.
(ii) the “Option Period” shall extend for 30 days beginning on the date of receipt of the appraisal report, or, if two appraisers have been chosen under the terms of paragraph 33, on the date of receipt of the second appraisal report (provided that both appraisal reports shall be due within 21 days after the notice date) or if the parties agree on a Fair Market Value, on the day said agreement is reached.
(iii) the “Advertising Period” shall be the period beginning on the day following the last of the Option Period and ending at midnight on the Tuesday following the fourth Sunday following the last day of the Option Period.
(iv) the “Listing Period” shall be the period beginning on the day following the end of the Sale Period.
(v) a “Bona Fide Offer” shall be defined as a legally enforceable written offer to purchase the property accompanied by deposit of 1% of the offering price by certified, cashier’s or treasurer’s check and providing for a closing no later than 60 days after acceptance. The Bona Fide Offer may be contingent upon the offeror’s securing financing of 80% of the purchase price, such financing to be obtained within 45 days from the acceptance of such offer at the expense of the person making the offer.
B. Procedure for Sale: At any time, either party may give written notice to the other party that she desires the Property be sold. After the giving of such notice, the following procedure shall be followed with in the Sale Period:
(i) the property shall be offered for sale at its fair market value (“Fair Market Value”). Within three working days after the Notice Date, the Parties shall jointly determine the Fair Market Value. If the Parties are unable to agree between themselves as to the Fair Market Value, they shall hire a real estate appraiser to determine the Fair Market Value in accordance with the procedures specified in paragraph 33. The appraisal report or both appraisal reports, if two appraisers are chosen under the terms of paragraph 33 shall be due within 21 days after the Notice Date.
(iii) the party other than the party giving notice (the Remaining Tenant), shall have the option during the Option Period to purchase the Property for the Fair Market Value. The option must be exercised on or before the last day of the Option Period and the provisions of paragraph 15 shall dictate the procedure for the purchase.
C. if no party exercises rights under the Option Period, the Parties shall proceed as follows:
(i) on the first Sunday after the beginning of the Advertising Period and for the next three successive Sundays thereafter, the property shall be advertised in a local paper, and such other available outlets, for sale at the Fair Market Value.
(ii) during the Advertising Period, both Parties shall make reasonably diligent efforts to show the Property and receive offers therefor. Each party shall notify the other of all offers received.
(iii) the party other than the party giving notice shall have the further option to purchase the Property at any time during the Advertising Period at a price equal to or higher than the Fair Market Value or the highest Bona Fide Offer received prior to the time the option is exercised as set forth in subparagraph 14(B)(ii).
(iv) if the option to purchase under the provisions of subparagraph 14(B)(ii) is not exercised, the Property shall be sold to the maker of the highest Bona Fide Offer equal to or exceeding the Fair Market Value. If there is no such offer, the Property may be sold at a price and upon such terms as the Parties mutually agree. If the parties do not agree to accept any offers received, then on the day following the end of the Advertising Period, the property shall be listed for sale with a real estate broker on a multiple listing basis at the Fair Market Value, unless otherwise agreed by the Parties. Unless otherwise agreed by all parties, the property shall be sold for the highest Bona Fide Offer received during the listing period.
15. BUY-OUT OF CO-TENANT
In the event that one party desires to buy-out the interest of the other party in the property, the following procedure shall be followed:
A. Terms of Offer: the party desiring to purchase the Property (the Offering Party), shall deliver to the other party (the Offeree) a written offer, which shall state the value which the offering party assigns, and at which the offering party agrees to purchase the other party’s undivided interest in the Property. Such offer shall be accompanied by a certified or cashier’s check in the amount of $__________as a deposit.
B. Mutuality of Offer: The Offering Party shall also agree to sell her interest in the property to the Offeree at the price stated therein, if the other party so elects, in accordance with subparagraph 15 C. However, there shall be no buy-out by either party of the other party without the mutual agreement of the parties. The parties agree to execute all documents necessary to affect the buyout referred to in the preceding sentence.
C. Obligations of Offeree: after receipt of the offer and $______________deposit, the Offeree within two weeks of the date of such receipt shall do one of the following:
(i) agree in writing to sell her interest in the property at the price stated in the offer; or
(ii) agree in writing to purchase the offering party’s interest in the property at the price stated in the offer, deliver to the other party an executed offer accompanied by a certified or cashier’s check for $__________ as a deposit and return the deposit of $________________held from the offering party.
(D) Terms of Sale: within one week after the Offeree makes an election under subparagraph 15 C., the parties shall sign a purchase and sale agreement, as revised by mutual agreement of the parties which may be contingent for 45 days upon the procurement of financing. Payment shall be in certified or bank cashier’s check or wire transfer and closing shall be within one month after the signing of the purchase and sale agreement, unless extended by the agreement of the parties. The purchasing party shall arrange so that the selling party will have no further liability on any other joint obligations made with respect to the property, or arrangements as otherwise mutually agreed and writing by the parties.
E. Disposition of Deposit: the deposit made under subparagraph 15C or 15 C(ii) shall be credited to the purchase price only if the sale is completed as provided in the purchase and sale agreement.
Treatment of special payments at the time of the closing on any sale: under this paragraph 15, if any amounts are due to a party under paragraph 12, payment shall be credited to or charged against as the case may be that payments made to the selling party for her interest in the property.
G. Subordination to provisions for sale: in the event both of the parties desire to and are able to purchase the other’s interest in the property, neither shall purchase the other interest herein, but the provisions of paragraph 14 shall apply.
16. DISPOSITION OF PROCEEDS OF SALE
In the event of the property is sold pursuant to paragraphs 14 or 15, the proceeds of the sale shall be distributed as follows:
A. first, to the repayment of any other joint obligation or charges secured by any lien against the property;
B. second to the payment of all fees, charges, conditions or other expenses in connection with the sale of the property;
C. third to the repayment of each party for the amount contributed to the down payment and closing costs for the property as set forth in schedule D. attached hereto and made a part hereof;
D. fourth, to the reimbursement any party entitled to payments pursuant to paragraph 13 of this agreement and
E. fifth, the remaining amount shall be distributed one half to First Party and one half to Second Party.
17. POWER OF ATTORNEY IN CERTAIN CIRCUMSTANCES
A. Grant of Power of Attorney: whereas each party hereto has entered into this agreement inconsideration all of and in reliance upon the promises and covenants of the other party contained herein, in order to ensure that such promises and covenants shall be fully performed as herein agreed, each party hereby grants to the other an irrevocable special power of attorney, exercisable only in the circumstances and to the extent specified in subparagraph 17B.
B. Limits of power of attorney: in the event that a party elects to proceed under the provisions of paragraph 14, 15 or 21B, if either party ( the Complying Party) performs all acts required therein to be taken and the other party is unwilling or unable to perform the acts required by her by the terms of such paragraph ( the Noncompliant Party) the Complying Party shall have an irrevocable special power of attorney to perform such acts on behalf of the non-complying party as are necessary to carry out the terms of this agreement including with implied limitation, the power to sign the name of the noncomplying party to a purchase and sale agreement, a deed, or all other documents necessary to implement the provisions of paragraphs 14 and 15 and collect on behalf of the other party the proceeds of any sale and to make distribution thereof as provided in this agreement.
18. MANAGEMENT OF PROPERTY
First Party and Second Party shall be responsible for managing, and arranging for necessary repairs to the property, provided that the money for such payment and repairs shall be provided one half by First Party and one-half by Second Party in accordance with the provisions of paragraph 12. Neither shall be liable to the other for any failure to perform such duties unless such failure results from gross negligence or intentional misconduct.
19. ALIENATION
No party will transfer or attempt to transfer her interest in the property without the prior written consent of the other party.
20. NO POWER TO BIND
The parties have no intent under this agreement to form a partnership with respect to the property, nor to permit one party to act as the agent of the other, or to permit one party to act with a power of attorney for the other party with respect to the property except as expressly provided for in this agreement. The intent of the parties is hereby expressly declared to the contrary.
21. ASSUMPTION OF COSTS
A. the parties covenants and agree, in the event of one of the parties becomes unemployed and exhaust her existing cash reserves, the other party will assume full financial responsibility for any payments due on and or repairs made to the above-mentioned real property until such time as joint responsibility as herein above-described can be resumed, or the house is sold, whichever occurs first. If the condition described herein occurs, the party who is unable to make her proportionate payments will repay of her unpaid shares to the other party within six months of the former’s failure to make such payments provided however that if at the end of six months the nonpaying party is still unable to make such payments, the party shall renegotiate this paragraph of the agreement and shall comply with the provisions of paragraph 11 above.
B. in the event of an unaccounted disappearance or incapacity of either party for a period in excess of 30 days, the other party may unilaterally act to fulfill the obligations of the absent or incompetent party without diminishing the said party’s rights or the rights of rights of said party’s personal representative to a full and fair accounting.
22. RESOLUTION OF DISPUTES
In the event that the parties are unable to resolve to their mutual satisfaction any disputes regarding the substance or interpretation of any matter relating to or arising from the terms of this agreement, and the parties covenants and agree to proceed as follows in order to resolve any such disputes that may rise:
the parties covenants and agree that each of them will appoint one person and that the two individuals chosen will then together appoint one other person, who will serve as a mediator between the parties.
B. the parties covenants and agree to cooperate with the mediator referred to in the preceding paragraph. If any and all attempts to work with the parties to reach a fair and reasonable resolution of the dispute or if the parties or either one of them do not accept all decisions of the mediator concerning the resolution of a dispute, they shall proceed to mediation at a reputable entity such as the American Arbitration Association (AAA).
23. CONSENT TO MEDIATION
Any dispute or disagreement which arises out of or in connection with this agreement and which cannot be reconciled among the parties as set forth in paragraph 22, shall be decided by mediation by the reputable entity, unless the parties otherwise agree mutually in writing. The decision of the mediator shall be final and binding on the parties and judgment may be entered upon in accordance with applicable law in any court having jurisdiction thereof. Notice of demand for mediation shall be filed in writing with the other parties to the agreement and with the reputable entity. All costs of such mediation shall be paid by the parties equally.
24. ACTS NOT TO BE DONE WITHOUT CONSENT
A. employ or dismiss any agent or servant of the parties except as herein provided.
B. lend any other monies or extend any credit of the parties to any person or persons.
C. give any security or promise for the payment of money on account of parties unless in the ordinary course of business
D. enter into any bond or become bail endorser or as security for any person.
E. draw, accept or endorse a bill of exchange or promissory note on account of the parties
F. compromise or compound or, except upon payment in full, release or discharge any debt due to the parties
G. directly or indirectly voluntarily or involuntarily suffer or permit any lien or encumbrance to attach to their respective interests in the property without the prior written consent of the other.
Any party committing any breach of any of the foregoing stipulations shall indemnify the other from all losses and expenses on account thereof.
25. OBLIGATION
Each party shall in all times duly and punctually pay and discharge her separate and private debts and engagements, whether present or future and keep indemnified therefrom, and from all actions, proceedings, costs, claims and demands in respect thereof, the premises and the other party.
26. NON-ASSIGNABILITY
The rights and duties under this agreement shall be deemed to be personal and shall not be assignable by either party other than by operation of law.
Article III – GENERAL PROVISIONS.
27. OCCUPATION
This agreement shall terminate and cease to bind the parties in the event that either or both of them decided to discontinue sharing the property described herein, provided that if the event described in this paragraph shall occur, this agreement will not terminate until all issues of property distribution finances have been resolved to the mutual, reasonable satisfaction of both parties.
28. CHANGES TO THE AGREEMENT
Either Party may request changes to the agreement, but they will only be effective if agreed in writing, signed by all Parties, and recorded. If any ambiguity is found in the agreement or various documents forming this agreement, the Parties shall issue any necessary clarification or instruction.
29. SUCCESSION
This agreement shall in or to be binding upon the parties’ heirs and executors or administrators. In particular, but not in limitation of the general terms hereof, in the event of the death of a party, her heirs and executors or administrators shall possess the same privileges and rights and shall be subject to the same liabilities and obligations with respect to the sale and buyout provisions of paragraph 14 an 15 as would the deceased party were she still living.
30. APPLICABLE LAW
This Agreement shall be governed in all respects by the laws of ___________________, and its Courts without regard to its conflict of law provisions.
31. ENTIRE AGREEMENT
This agreement constitutes the entire agreement between the parties. It supersedes all prior oral or written agreements or understandings between the Parties concerning the subject matter of this agreement.
32. SEVERABILITY
The provisions of this agreement are severable. If any provision is held to be invalid or unenforceable, it shall not affect the validity or enforceability of any other provision.
33. APPRAISALS
Whenever the terms of this agreement provided that a Fair Market Value of the property shall be determined by appraisal, the parties shall hire a real estate appraiser to produce a written appraisal report, with comparables, of the Fair Market Value pursuant to paragraph 14 B (i), the cost shall be borne by the party proposing the improvements. Where the appraisal is made pursuant to the sale of the property under paragraph 14 or 15 the cost shall be borne equally by the parties. If the parties cannot mutually agree upon an appraiser, each shall hire and pay the cost of her own appraiser. Where two appraisers are chosen, the Fair Market Value of the property shall be the average of the two appraisal reports.
34. TERMINATION
This agreement shall terminate upon the sale the property pursuant to paragraph 14 and disposition of proceeds of sale in accordance with the terms of paragraph 17 or upon the buyout of one party by the other in accordance with the provisions of paragraph 14 or 15. If this agreement has been recorded with ______________________ County Registry of Deeds, a notice of termination shall be recorded therein in the appropriate form.
35. NOTICES
All notices and communications by either party with respect to this agreement shall be duly given if delivered personally to the other party with signed receipt copy or mailed by registered or certified mail, postage prepaid to the other party at the address recited above or any other address of which written notice by registered or certified mail has been given.
36. CAPTIONS
The captions herein are inserted only as a matter of convenience and for reference and in no way define, limit or describe the scope of this agreement or the intent of any provisions thereof.
Executed under seal on the day and year written above.
_________________________ _____________________________
First Party Second Party
NOTARY ACKNOWLEDGMENT
STATE OF _________________ )
SS.:
COUNTY OF )
On this ______________ day of ___________________, 20__, before me personally came __________________________________________________________, to me known and known to me to be the person described in and who executed the foregoing instrument and he/she acknowledged to me that he/she executed the same.
_________________________________
Notary Public
My commission expires: __________________
STATE OF _________________ )
SS.:
COUNTY OF )
On this ______________ day of ___________________, 20__, before me personally came __________________________________________________________, to me known and known to me to be the person described in and who executed the foregoing instrument and he/she acknowledged to me that he/she executed the same.
_________________________________
Notary Public
My commission expires: __________________
EXHIBIT A
PERSONAL PROPERTY OF FIRST PARTY
EXHIBIT B
PERSONAL PROPERTY OF SECOND PARTY
EXHIBIT C
JOINT PROPERTY
EXHIBIT D
SCHEDULE OF PERCENTAGE INTEREST IN REAL PROPERTY
FIRST PARTY %
SECOND PARTY %
As of Date of Purchase
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