CO-OWNERSHIP AGREEMENT
FOR A PRE-LEASED PROPERTY
This Co-ownership Agreement (this "Agreement") is made at __________ on __________.
BETWEEN
__________, of __________, PAN __________;
__________, of __________, PAN __________
(each a "Co-owner" and together the "Co-owners").
RECITALS
D. The Co-owners wish to record how they hold the Property, how the rent and costs are shared, how it is managed, and what happens if one of them wishes to leave or dies.
THE CO-OWNERS AGREE AS FOLLOWS.
- 1. THE PROPERTY AND THE LEASE
1.1 The Co-owners hold the Property, the Lease and the Deposit together and in the shares set out in clause 2. This Agreement governs only the relations between the Co-owners. It does not change the Lease or any right of the Tenant under it.
1.2 The Co-owners shall comply with the Lease as lessors and shall not do anything that would put the Lease or the Tenant's rent at risk.
- 2. SHARES
2.1 The Co-owners own the Property, and are entitled to the rent and every other receipt from it, in the following shares:
(a) __________: __________%;
(b) __________: __________%;
2.2 The Co-owners hold as tenants in common, each in their own share, and not as joint tenants. A Co-owner's share does not pass to the other Co-owners on death; it passes to that Co-owner's heirs or legatees, who are bound by this Agreement as clause 12 provides.
2.3 The shares add up to the whole of the Property. Each Co-owner bears the costs, and receives the income, of the Property in the proportion of their share, and no Co-owner may claim a different proportion unless all agree in writing.
- 3. RENT
- 4. THE SECURITY DEPOSIT
4.1 The Deposit belongs to the Tenant until the Lease ends and is refundable to the Tenant under the Lease. The Co-owners are liable to refund it in the proportion of their shares. A Co-owner who holds the Deposit or any part of it holds it for all the Co-owners and shall not use it for any other purpose.
4.2 A deduction the Tenant is lawfully entitled to make from the Deposit at the end of the Lease is borne by the Co-owners in their shares, unless it arose from the fault of one Co-owner, who then bears it alone.
- 5. COSTS OF THE PROPERTY
5.1 The Co-owners shall share, in the proportion of their shares, the property tax, ground rent, allotment dues and transfer or other fees payable to any authority, insurance, the repairs and works the lessor must do under the Lease, and the fees of the lawyers, accountants and other advisers the Co-owners engage for the Property.
5.2 The Managing Co-owner may pay a cost that is due and recover each Co-owner's share from them on a written statement with the receipt. A Co-owner shall pay their share within fifteen days of receiving the statement.
- 6. THE MANAGING CO-OWNER
6.2 The Managing Co-owner has no power to decide any matter reserved by clause 7.2 and shall act on the decisions of the Co-owners. The Managing Co-owner is not paid for this work unless the Co-owners agree otherwise in writing, and answers to the Co-owners for what is done in their name.
6.3 The Co-owners may replace the Managing Co-owner by a decision under clause 7.1. If the Managing Co-owner dies, becomes incapable of acting, or sells their entire share, the others shall appoint a new Managing Co-owner within thirty days.
- 7. DECISIONS
7.2 The following need the written agreement of every Co-owner: (a) renewing, extending, varying or ending the Lease, or letting the Property to anyone else; (b) accepting a surrender, changing the rent or agreeing any rent-free period; (c) allowing the Tenant to sub-let, assign, change the use of or alter the Property; (d) selling, mortgaging or otherwise charging the whole Property; (e) starting a suit or eviction proceedings against the Tenant, except the urgent steps clause 6.1 allows; (f) works on the Property costing more than one month's rent; and (g) amending this Agreement.
- 8. DEALING WITH THE TENANT
8.1 No Co-owner shall, alone, give the Tenant any concession, waiver, extension or promise about the Lease, or accept rent in a way that differs from this Agreement. The Managing Co-owner shall send the other Co-owners a copy of every important notice sent to or received from the Tenant within seven days.
8.2 The Co-owners shall, when this Agreement is signed, give the Tenant a notice of the co-ownership and of how the rent is to be paid, signed by all of them, and shall ask the Tenant to acknowledge it.
- 9. RESTRICTIONS ON DEALING WITH A SHARE
9.2 After that period, a Co-owner may sell their share only after offering it to the other Co-owners under clause 10. No Co-owner shall mortgage or charge their share without the written consent of every other Co-owner, which may be refused for any reason.
9.3 A Co-owner may transfer their share to a spouse, child or parent, or to a company or limited liability partnership that the Co-owner wholly owns, if the transferee first signs a deed agreeing to be bound by this Agreement. The transferring Co-owner remains responsible for what the transferee owes under it.
9.4 Every transfer of a share is subject to the conditions of the allotment or title described in recital C, including any permission or fee required, and the transferring Co-owner shall bear the cost of obtaining it.
- 10. RIGHT OF FIRST REFUSAL
10.1 A Co-owner who wishes to sell their share (the "Seller") shall first give the other Co-owners a written notice stating the share, the name of the person who has offered to buy it, the price, and every other term of the offer, with the offer itself attached.
10.4 If the offer is not wholly in money, the price for the purposes of this clause is the money value of the offer fixed by an independent registered valuer chosen by the Seller and the other Co-owners together, whose fee they share equally.
- 11. LEAVING WITHOUT A BUYER
11.1 After the period in clause 9.1, a Co-owner who wishes to leave but has no buyer may offer their share to the other Co-owners at the value fixed by an independent registered valuer chosen by all of them together, whose fee they share in the proportion of their shares. The others may, but need not, buy at that value within the time clause 10.2 allows.
11.2 No Co-owner may ask a court to divide the Property or force its sale while the Lease is running, and the Co-owners waive any right to do so to the extent the law allows. The Property may be sold as a whole only with the agreement of every Co-owner under clause 7.2.
- 12. DEATH, INCAPACITY AND INSOLVENCY
12.1 If a Co-owner dies, their share passes to their heirs or legatees under the law of succession or their will. The heirs or legatees take the share subject to this Agreement and shall within ninety days of the death sign a deed agreeing to be bound by it and name one person to act for them in all dealings with the other Co-owners.
12.2 If a Co-owner becomes incapable of managing their affairs, a person lawfully authorised to act for them may do so under this Agreement. If a Co-owner is declared insolvent or their share is attached, the others may buy that share under clause 11.1 at the value fixed under that clause.
- 13. TAX
13.1 Each Co-owner is responsible for their own income tax on their share of the rent and of any gain, and for their own returns. The Co-owners shall ask the Tenant to deduct and certify any tax at source on each Co-owner's share separately, against that Co-owner's own PAN.
13.2 Any registration, return and payment required for goods and services tax on the rent shall be handled as the Co-owners decide under clause 7.1 on the advice of a chartered accountant, and its cost and any tax payable shall be borne in the proportion of their shares.
- 14. RECORDS AND INFORMATION
14.1 The Managing Co-owner shall keep accounts of all rent and costs, give each Co-owner a monthly statement with the bank statement of the joint account, and give a yearly statement within sixty days of the end of each financial year.
14.2 Each Co-owner may inspect the accounts, the Lease and the title documents at any reasonable time and take copies. The original title documents shall be kept safely as the Co-owners decide, and no Co-owner shall take them out of that custody except to register or deal with them for the Property.
- 15. DEFAULT
15.1 If a Co-owner breaks this Agreement and does not put it right within fifteen days of a written notice from another Co-owner, the others may do what is needed to put it right at that Co-owner's cost, set off what is owed against that Co-owner's share of the rent, and ask the arbitrator to order specific performance and damages.
- 16. DISPUTES
- 17. GENERAL
17.1 This Agreement creates a co-ownership and not a partnership. No Co-owner is the agent of another, and none may bind another except as clause 6 provides.
17.2 A notice under this Agreement is valid if sent in writing to the address of the Co-owner at the head of this Agreement, or to any later address that Co-owner has given the others in writing, by hand, by registered post or by email with a delivery receipt.
17.3 The stamp duty and registration charges on this Agreement, if any, and the cost of preparing it, are borne in the proportion of the Co-owners' shares.
17.4 This Agreement is the whole agreement of the Co-owners about the Property and replaces every earlier discussion. It may be amended only in writing signed by every Co-owner. A delay in enforcing a right is not a waiver of it. If a part of this Agreement is held invalid, the rest remains in force. It is governed by the law of India.
IN WITNESS WHEREOF the Co-owners have signed this Agreement at __________ on __________.
__________
Signature: ______________________________
__________
Signature: ______________________________
WITNESSES