Massons

The art of co-ownership: how to buy your weekender with friends, with confidence

Written by Jodie Masson on January 27, 2017

The smart way to buy your weekender and keep your friends

It’s that time of year when we all take a break from our stressful jobs, and travel to places more peaceful than our own. We start to reassess our priorities and think about spending more time with our families.

Maybe it’s time to buy a weekender? A place to get away from it all regularly. A home away from home.

But the problem with buying a weekender is that it’s a huge expense – not only the initial acquisition of that beachside property, but also the ongoing maintenance costs and rates (which are usually not tax deductable). In addition, the reality is that it’s unlikely, after the initial “honeymoon period”, that you will use it every weekend and every holiday.

The ongoing maintenance (eg cleaning and lawn mowing) can also be a drain on families who are already time poor – do you really want to be spending your week maintaining and cleaning one house and your weekends maintaining and cleaning a weekender?

It might be time to think about co-ownership.

Co-ownership is essentially owning a property with others. In the context of a weekender or holiday house, it’s a very useful structure as it allows people to pool their money to buy and manage an asset that they may not have otherwise been able to afford. It allows several families to share the burden of ongoing rates and charges, maintenance and cleaning. In most structures, it means that the weekender is used more regularly as people visit less often and tend to value their “allocated time”.

A co-ownership structure is analogous in many ways to a strata scheme (in the sense that it involves many owners working together to make decisions about a jointly owned property). However, whilst a strata scheme sits within a comprehensive legislative framework that governs the relationship between co-owners, a co-ownership structure does not. You need to specially contract to establish the “ground rules” as, unlike strata, there is no specific legislation to save you if things go wrong. It is very important to have a comprehensive co-ownership deed which sets out the legal contract between the various co-owners.

We have set up and worked with several co-ownership structures, both for enormous and complicated commercial properties and for smaller “weekender” style assets. Specialised skills are required to set up a functional and peaceful co-ownership scheme. It pays to get it right from the very beginning.

In the context of a weekender, the co-ownership arrangements that we have seen work well all cover the following key areas:

  • Allocation of use of the property between the owners (usually by way of a yearly roster) ensuring that each “special” period (eg Christmas, Easter, long weekends) is rotated fairly
  • Insurance, indemnities and risk
  • Maintenance, repairs and cleaning (what will be outsourced and what will the owners will do themselves?)
  • “House rules” that apply equally to owners and visitors (eg pets, storage of personal items)
  • Furniture and other jointly owned house and pantry items
  • How costs are shared (preferably by way of an administrative fund and sinking fund held in a separate bank account)
  • Annual meetings and processes for decision making. Will one share equal one vote? Are some decisions so important that they should be unanimous?
  • Who is responsible for key areas (eg administration (managing the roster and mail), paying rates and other bills, organising tradesman)?
  • What happens when an owner wants to sell their share? Will owners have a right of first refusal to buy each other out? What happens if an owner dies or becomes insolvent? Can an owner mortgage their share?
  • Is holiday letting permitted? How will it be managed? How will the income be distributed?
  • Will a caveat be registered on title to notify purchasers of the existence of the co-ownership structure?
  • And most importantly… dispute resolution! What happens if the owners can’t agree?

A co-ownership deed needs to be properly constructed to be enforceable by the original owners, and any subsequent co-owner. It needs to have “running covenant” clauses so that it will always apply to the property, even where one or more owners try to avoid its operation. It needs to be a document that an owner is able to rely on if they need to take legal action, in court if necessary, against a co-owner for a failure to comply with the co-ownership deed.

In a well-managed co-ownership scheme, serious disputes rarely happen as the co-ownership deed articulates the pre-arranged agreement between the owners. It operates in practice like a strata scheme – where meetings are held annually, owners follow the pre-agreed rules and the costs associated with owning and maintaining the property are properly budgeted for and properly shared.

Now…. maybe that weekender is not such a bad idea after all?

Insights

"Excellence Awardee" - Boutique Firm of the Year - 2022 Australasian Law Awards

We are delighted that Massons has been selected as an “Excellence Awardee” in the category of “Boutique Firm of the Year” at the 2022 Australasian Law Awards.

Thank you to all of our wonderful clients who have supported our nomination in this category, and to our amazing lawyers and support staff for making this possible!

Wishing all the other Awardees the best of luck and looking forward to the Gala Dinner.  A night out with our team is always cause for celebration – win, lose or draw!!

March 23, 2022

Doyle's Guide 2022

We are excited about our inclusion in Doyle’s Guide for 2022 for NSW in the following categories:

Massons – Leading Property & Real Estate Law Firms
Jodie Masson – Leading Property & Real Estate Lawyers and Leading Leasing Lawyers
Leisha de Aboitiz – Leading Property & Real Estate Lawyers and Leading Leasing Lawyers
Ben Malone – Property & Real Estate Law Rising Stars

Thank you to all of our peers and wonderful clients who have helped to achieve this recognition.

March 14, 2022

"Rising Stars" Australasian Lawyer 2022

February 28, 2022

Appointment as Senior Associate

We are excited to announce the appointment of Alex Ho as a Senior Associate at Massons.  Alex started with us as a paralegal and has achieved this milestone in record time due to his hard work, his ability to develop and sustain fantastic relationships with clients, his engagement in constantly seeking to improve himself and others in equal measure, and his absolutely infectious enthusiasm.  We couldn’t be prouder!  Congratulations Alex!

January 5, 2022

Australian Lawyer's Elite Women List 2021

December 8, 2021

We are excited to have been named as finalists in several categories in the Lawyers Weekly “Women in Law Awards 2021”:

– Massons – “Boutique Diversity Law Firm of the Year”
– Ole Mitrevski – “Senior Associate of the Year – SME Law”
– Michelle Mon – “Rising Star of the Year – SME Law”
– Nicole Caryofyllis – “Legal Support Professional of the Year”

We are proud to be recognised as a Firm which supports diversity in the workplace and are humbled to be included in the list of finalists in these categories. Win or lose, we are looking forward to celebrating the Awards night and would love to thank our peers and clients who have helped us achieve this recognition.

October 12, 2021

Australia's commercial property law experts

Enquiries

Phone: +61 2 8923 0900
Email: property@massons.com