What's a Co-ownership Agreement & How to Create One
Learn how a Co-ownership Agreement protects your home, relationships, and financial interests in co-ownership.
⚡️ At a glance
• Home co-owners need agreements
• Agreements reflect decisions and define terms, structure, management
• Co-ownership Agreement is a living document, not fill-in-the-blank job
• Memorandum of Agreement is secondary document to file with your County
• Agreements are legally-binding when created, executed, and updated properly
Co-own a home? You need to create and manage a Co-ownership Agreement. It lays down the rules of co-ownership and evolves with your goals, situation, and lives.
In our 2025 national survey of 1,637 US-based co-buyers and co-owners, 94% said they need help with a Co-ownership Agreement. Unfortunately, many folks delay until it's too late.
Co-owners who put in the work build wealth, protect, and future-proof their co-investment. And it's more about science than art.
Here's what we'll cover:
What is a Co-ownership Agreement?
A Co-ownership Agreement is a legal document that outlines the details of joint ownership and management of a particular property between two or more individuals.
The agreement sets the terms, structure, and management for joint homeownership, associating co-owners and their mutually-agreed determinations to a specific property. It's more than just a document—it's the backbone of your co-ownership. Fortunately, it's adaptable to your needs and expectations.
A well-crafted agreement prevents misunderstandings, setting clear roles, rights, and responsibilities for all parties. It also creates a framework for the day-to-day management of the co-ownership arrangement.
Without a forward-looking agreement, unexpected changes can force outcomes you never intended.
Who needs a Co-ownership Agreement?
Anyone co-investing in a property with friends, family, or a partner. Much like a business partnership, you're pooling resources, cooperating for shared interests, and sharing risks and rewards. A written agreement is your roadmap for success. When properly designed and executed, it also acts as a legally-binding contract.
Why do we need a Co-ownership Agreement?
Three key elements make co-ownership successful: planning, structure, and management. A written agreement is the foundation. It supports healthy relations, smooth sailing, and return on investment.
1. Streamline operations
An agreement details roles, rights, and responsibilities, making management smoother. It acts as a source of truth that prevents misunderstandings and creates non-repudiation.
2. Prevent conflict
The agreement establishes clear expectations, including expense distribution, property use, and decision-making procedures. This roadmap helps to pre-empt potential disputes and provides a mechanism for resolution, protecting relationships, and stability.
3. Protect against risk
Co-owners don't have the same legal or tax protections as married couples. An agreement provides a legal framework to safeguard co-owners' rights and interests.
4. Limit financial exposure
Co-owners often jointly finance their property, making them equally liable for debt repayment. A comprehensive agreement can protect co-owners from financial mishaps.
5. Simplify the exit
Every co-ownership will eventually dissolve. Developing an exit strategy and documenting it in your agreement can make this process less stressful, and far less expensive.
What does a Co-ownership Agreement cover?
The content and format of the agreement depend on your situation, preferences, and governing law.
Basics
In most cases, you should include:
- Participants
- Occupancy
- Property description (include a proper Legal Description)
- How you hold Title to the property
- Details of the home purchase
- Mortgage Information
- Ownership structure and individual ownership percentages
- Individual contributions (financial capital contributions and non-financial contributions)
- Roles, rights, and responsibilities
- Expense allocations (recurring, non-recurring expenses, emergency)
- Mechanics of payment
- Maintenance and repair management
- Decision-making
- Dispute resolution
- Contingency plans
- Document management plan
- Exit strategy
Some co-owners choose to get more granular, but the best agreements are those you co-create and commit to.
⚠️ Heads up!
How you hold Title to your property impacts the structure and composition of your Co-ownership Agreement. It also impacts decision-making around ownership structure.
Many co-owners choose Tenants in Common (TIC) or Joint Tenants with Right of Survivorship (JTROS).
A Limited Liability Company (LLC) is generally better suited for investors who manage a real estate portfolio.
Other elements
In addition to the basic components, be sure to include:
➡️ Definitions and provisions: Define key terms and conditions within your agreement to prevent misunderstandings and establish clarity.
➡️ Governing law: Specify which state’s law will govern the agreement, which generally corresponds to the state where the property lives.
➡️ Written notice: Outline how formal notices, like changes to the agreement or key decisions, should be communicated. You should identify the method (e.g., email, certified mail) and the timeframe for a response (e.g., 30 days).
➡️ Review and update schedule: Treat your Co-ownership Agreement as a living document. Schedule regular reviews to make sure it stays up-to-date with your current situation.
➡️ Co-owner contact information: Include current contact information to ensure clear lines of communication.
How to make it official
On its own, a printed document or PDF ain’t worth much.
Follow these steps to execute your agreement:
- Review and agree: Ensure all co-owners thoroughly review the agreement, understand all provisions, and agree to them. Address and clarify any areas of doubt.
- Sign and date: Each co-owner should sign and date the agreement initially and every time it is updated.
- Witness, notarize, or digitally sign: This adds an extra layer of legitimacy to the process.
- Create a Memorandum of Agreement: This is a shorter, more concise document that outlines the basic terms of the co-ownership. It doesn't include all the agreement details but serves as a public record of the arrangement.
- Record your Memorandum of Agreement: Submit or deliver your Memorandum of Agreement to your local County’s recording office to officially record it on the public register. This ensures the agreement is recognized as a matter of public record and establishes constructive notice. Be sure to keep a copy of the filed Memorandum for your records.
It's essential to formalize your Agreements to protect your rights and interests as co-owners. This process helps ensure your agreements are legally binding and practically useful.
Update your agreement
Your Co-ownership Agreement is a living document. It should evolve as your circumstances, goals, and the property itself change. Regular updates to your agreement can help you maintain harmony, protect your investment, and ensure the agreement continues to serve its purpose. Here are some key considerations:
✍️ Life developments
Significant events like marriage, childbirth, job changes, financial changes, or the death of a co-owner may require updates to your agreement. Any time a co-owner's circumstances change, review your agreement.
✍️ Asset or liability changes
If you decide to change ownership structure, modify individual ownership interests, refinance, or take on additional debt related to the property, you should update your agreement.
✍️ Property modifications
Changes to the property, such as significant renovations or new features, might warrant updates to your agreement. This is particularly true if these changes affect the use of the property or the financial contributions of the co-owners.
✍️ Conflicts
If conflicts arise between co-owners, you may want to update the agreement to better manage these disputes in the future. This could involve clarifying roles, responsibilities, or decision-making procedures.
✍️ Legal landscape evolution
Stay informed about any changes in property, tax, or co-ownership laws that might affect your agreement. If laws change, update your agreement to stay compliant.
It is important to update your Co-ownership Agreement regularly to ensure it remains a valuable tool and does not become outdated. All co-owners should agree upon, sign, and date all updates.
✍️ Periodic reviews
Set a schedule to review your agreement regularly: quarterly, every six months, or annually. Regular reviews ensure that your agreement stays up-to-date with everyone's current situation and expectations.
Considerations
Your Co-ownership Agreement is a living document that reflects dynamic decisions and consensus between you and your co-owner(s). It’s not a birth certificate. It’s your foundation, and you get out what you put in. It must be complete, authentic, and up-to-date to be effective and enforceable.
As you co-create your agreements, here are qualities to aim for.
🔐 Secure
Your agreement should be tamper-proof wherever you decide to store it. A physical copy in your drawer or a digital copy in a shared Google Drive folder falls short. Your largest asset, home, and relationship(s) are on the line. Think like a Swiss bank.
🔑 Accessible
Make sure each co-owner has clear and easy access to all versions of the agreement.
🪄 Easy to modify
Life changes, family situations change, and jobs change. Birth, death, coupling, breakup, divorce, and illness are all possible, as are changes to your financial affairs. As circumstances evolve, so should your agreement.
🔢 Versioned
Track all changes to your agreement. A stale agreement is like a used pull tab—no good. It’s not just for cases of conflict: IRS audits, external legal challenges, or the death of a co-owner could all require details of change history.
✅ Verifiable
An agreement is only as good as its ability to be verified. If you can't prove that it's authentic, updated, and executed, it's worthless. A scanned PDF with scribbled signatures could be challenged in court, probate, or an audit.
Check out our blog post on how we use blockchain to help co-owners solve these challenges.
Common pitfalls to avoid
⚠️ Focusing on the output over the process
An agreement is an output—a few pieces of paper or a PDF, neither of which are inherently valuable. The usefulness of a Co-ownership Agreement stems from the dynamic decision-making and consensus between co-owners that it represents.
Too often, we see co-owners focus on ticking the box. But it’s not about creating a contract so you can take your granny to court if something goes wrong! It’s about making informed decisions and getting on the same page regarding your largest asset and home. Co-creating and maintaining a Co-ownership Agreement helps you avoid conflict and protect the interests of everyone involved in various situations, even those that don't involve a disagreement between co-owners.
⚠️ Putting it off
Many co-owners invest more time (and money) in Netflix than planning, structuring, and managing their most important asset. An agreement isn’t a lawyer, and it can’t automatically rescue you when sh** hits the fan.
⚠️ Neglecting it all together
Friends, family, and loved ones are not immune to risk in joint homeownership. The strength of your relationship(s) isn’t a substitute for a proper agreement: it's a great reason to take it seriously! Your home, relationship(s), and financial investment are worth protecting.
Pro tips
• Start early
The earlier, the better. You’ll tease out hairy issues before they become problems, save time and money, and gain peace of mind.
• Think about the big picture
An agreement is an artifact that ties together the many moving parts involved in co-ownership. The usefulness depends on it being accurate, current, and comprehensive.
• Formalize your agreement
Not documented? It didn’t happen. Not executed? It didn’t happen.
• Keep your agreement up-to-date
Treat your agreement as dynamic, because it is. The return on investment to actively managing co-ownership versus posting on social media, zombie scrolling, and fantasy football? Potentially hundreds of thousands of dollars.
💡The terms you set in your agreement are preventative. They're designed to ensure things go well! They're also a backstop. If things things don’t go well, you’ll be glad you set up guardrails.
Frequently asked questions
Are co-ownership templates enforceable?
Not really.
A co-ownership agreement isn’t something you can “fill in the blanks” for and call it good. It’s a living document shaped by real decisions between co-owners.
Templates are one-size-fits-all—they often lack the specificity and depth you need for your unique situation.
Imagine co-owning a $750,000 home, and things go sideways—someone can’t pay, there’s a disagreement, or it’s time to sell.
Would you trust a $30 template to hold up in court or resolve the issue?
While templates can sometimes serve as a starting point, they rarely meet the legal and practical requirements for enforceability.
Do we need an attorney to create a co-ownership agreement?
Not necessarily. In most cases, you don’t need an attorney to create a legally binding co-ownership agreement.
Attorneys can be helpful in complex cases—like multi-owner arrangements or unique property types—but they often come with high costs, starting at $500+ per hour.
If you do choose to hire one, make sure they specialize in residential real estate and understand co-ownership nuances. However, for many co-owners, accessible tools like Co-ownerOS™ offer a practical, cost-effective alternative to build and manage agreements without starting from scratch.
How do we update our co-ownership agreement?
Updating a co-ownership agreement should be straightforward and collaborative:
- Identify the section of your agreement that needs to be revised.
- Discuss proposed changes with all co-owners to ensure mutual agreement.
- Formalize the updates in writing, ensuring they don’t contradict existing enforceable terms.
- Digitally or physically sign the new version to make it binding.
Co-ownerOS™ simplifies this process by allowing you to make updates, collect approvals, and secure digital signatures all in one place. The updated agreement is automatically stored for easy access and reference.
If you’re not using a platform like Co-ownerOS™, you may need to revisit the attorney who helped draft your original agreement for revisions.
What happens if a co-owner wants to sell?
When a co-owner decides to sell their share, having a clear process in your agreement is critical. This could include provisions for buyouts, third-party sales, or even the sale of the entire property.
Without a well-defined plan, these situations can quickly become contentious or legally complicated, especially if timelines or expectations aren’t aligned.
A thoughtful agreement ensures transparency and fairness for all parties involved.
How do we handle disputes or financial defaults?
Disputes and financial defaults are among the biggest challenges in co-ownership. To avoid conflicts, a strong co-ownership agreement should include:
- Mediation Options: Agree to use a neutral third party for resolving disputes before escalating.
- Buyout Clauses: Establish predefined terms allowing co-owners to buy out a defaulting party’s share.
- Penalty Provisions: Clearly outline the consequences for non-payment or breaching responsibilities.
These terms need to be carefully crafted to comply with local laws and ensure enforceability, minimizing ambiguity and reducing the potential for long-term conflict.
What are the most common mistakes in co-ownership agreements?
Here are some common pitfalls to avoid when creating your co-ownership agreement:
- No Exit Plan: Not outlining what happens if someone wants to leave the arrangement.
- Unclear Financial Responsibilities: Leaving it vague about who pays for what expenses.
- Skipping Dispute Resolution: Assuming issues won’t arise instead of planning for disagreements.
- Overlooking Verbal Agreements: Verbal agreements are often legally unenforceable and prone to misinterpretation.
- Ignoring the Need for Updates: Agreements must evolve with life changes, like refinancing, new co-owners, or updated property use.
A well-structured agreement addresses these risks upfront, reducing friction and ensuring long-term success.
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Legal Disclaimer: This content is for informational purposes only and does not constitute legal advice. Co-ownership laws and practices vary by jurisdiction. For specific legal concerns, consult a qualified attorney.