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The increasing price of home ownership may lead some to consider co-owning land with a family member or friend. Where spouses own land together, the fair distribution of expenses and assets is usually dealt with by family law. Other co-owners may be surprised to find out that the law provides limited remedies in the case of a dispute arising about sharing profits and expenses.
Prudent co-owners may have entered into a written agreement that outlines their obligations regarding the property. Absent such an agreement, the only times that a co-owner may make a claim that the other pay their share of expenses or account for any profits received is during a court-ordered sale or if the co-owner has been denied access to the property by a fellow co-owner.
The fact that one co-owner exclusively occupies the property does not give any others a right to claim rent from that person. Even in a court-ordered sale, the court will only make an order for the payment of rent from an exclusive occupant if that occupant makes a claim for payment of a share of their expenses.
Where one co-owner obtains profits from the property, the traditional view in the law is that there is similarly no right to claim for a share of those profits unless the other co-owner has been denied access to the property or on a court-ordered sale.
In 2012, the British Columbia Law Institute issued a report on accounting and contribution between co-owners of land that called it a “rudimentary and archaic” area of the law. It recommended introducing a general right to claim contribution towards necessary expenses from other co-owners.
Until that happens, anyone considering co-ownership of land should obtain legal assistance to make sure that they have an enforceable right to share both the expenses and profits of land ownership.
For more information, please contact:
Our Commercial Real Estate Group has experience in all aspects of the law and practice related to commercial property acquisitions, management, structuring, development and sales.
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