A Tenancy in Common Agreement is a binding contract between co-owners of a property or asset. The agreement lays out all the terms both parties have to agree to in order to ensure everyone can use and manage the property properly. You can use this Tenancy in the Common Agreement template whether co-owners have a 50:50 share, or a different split. You can also add additional parties should the property be owned by three or four people/companies.
This Tenancy in Common Agreement is a legally binding contract between:
Hereby known as the 'First Party', and
Hereby known as the 'Second Party'.
The Agreement comes into effect [Document.CreatedDate] , and relates to both parties' interest in the Property described below:
(Address of co-owned property)
_____________________, hereby known as the 'Property'.
The Agreement details the terms of the relationship between the Co-owners and their responsibilities for the Property.
Both parties agree to the following terms:
Not all Tenancy in Common Agreements are 50:50. If one party uses or owns a larger share of the property, this can be outlined in percentage form.
1.1 The Co-owners, as tenants in common, will both hold the title of Property based on their respective interests, as laid out below:
First Party: ______%
Second Party: ______%
1.2 Appreciation or depreciation of the Property will be shared between Co-owners in proportion to their interest.
1.3 Both parties will share any net profits and losses from the Property during their Agreement on a pro-rata basis unless otherwise agreed upon in writing. This share will be divided by their held interests in the Property.
2.1 Should either party wish to change or improve the property, both parties must vote on the decision about the terms set out in Section 7 of this Agreement.
This section outlines that if the First Party wanted to sell their section of the property, the Second Party would have the first choice of purchasing it from them. The Second Party in this case would be known as the ‘Continuing Party’.
3.1 In the event of one Party intending to sell or transfer their interest in the Property (the "Seller"), the Seller must provide a written Transfer Notice to the Continuing Party.
3.2 Should this transfer be to a third party, the Seller must provide details to the Continuing Party of the Purchaser, price and any other material terms agreed by the Seller.
3.3 The sale must be completed within 180 days from the receipt of the Transfer Notice.
3.4 Upon receiving a Transfer Notice, the Continuing Party has the first choice to choose to buy the Seller's interest in the Property in full. This purchase will be for the price noted in the Transfer Notice (unless otherwise agreed by the Seller and Continuing Party). The Continuing Party cannot choose to purchase only a portion of the Seller's interest.
3.5 Notice of purchase from the Continuing Party must be provided within 30 days of receiving the Transfer Notice.
4.1.1 Should either party wish to transfer their interests in the Property to the Continuing Party or a Third Party, the following terms will apply:
4.1.2 The Continuing Party/Third Party will become responsible for all obligations of the Seller effective from the transfer completion date.
4.1.3 The Continuing Party/Third Party will pay the full price of the Seller's interest in the Property by cheque (or other payment option agreed in writing) to the Seller prior, to or on the completion date.
4.1.4 All parties will ensure that all transfer documents and duties are re-registered in the name of the Continuing Party/Third Party.
4.1.5 If the Seller transfers their interest in the Property to a Third Party, the Third Party will enter into a Tenancy in Common Agreement with the Continuing Party and shall uphold the Seller's obligations of the pre-existing Agreement.