When to use:
These agreements cover any situation where two or more people or sets of people share ownership and use of a house, flat or other property for holiday occupation. The agreements are designed to regulate occupation where only one owner occupies the whole of the property at any one time. However, there is nothing to prevent more than one owner occasionally using the property at the same time.
First, you should consider the most suitable structure for your sharing proposal. If you are looking at a commercial arrangement or one for more than ten people, then it would be better to hold the property in a limited company and buy and sell shares in it. Then ownership of the property itself never changes. No stamp duty is paid once it is bought as the right of occupation can be treated as a licence.
However, running a company does cost money, so between 2 and 10 owners it is a matter of preference as to whether you want the formality, expense and greater certainty of a company structure and shareholders agreement or the lower cost and comparative informality of an agreement like one of these.
We offer two versions here. One is for a situation where only two parties share - two individuals or two families, or whatever. The other is designed for more than two parties.
In Australian federal law, the registration of ownership does not record the shares in which land (that is, property) is held. So if you own 60% and I own 40% we have to record that in some other document. If we do not do so, the Law will assume we own in the shares in which we contributed to the purchase price. This may or may not be the same thing. These Net Lawman agreements specifically record the shares. They also record shares which may be owned by someone who is not a registered owner. Such an interest is called a beneficial interest.
AU-PR543 includes provision for:
-
Terms of beneficial interest - beneficial trusts provision
-
Price and payment for the Property
-
How many people allowed into occupation at one time and who they may be
-
Who and how will manage payment of expenses
-
Undertakings by the parties
-
Alternative exit strategies
-
Effect of termination
-
What if someone wants to sell his share or sell the property
-
Many usual legal provisions
AU-PR544 includes similar provision, but provides for a management structure ordered by annual meetings of the owners, possibility of proxy voting, and more. The exit strategy allows for a share to be sold to a third party, after offering it to all other owners.
These agreements include the declaration of trust (trust deed) as well as detail about the sharing arrangement.
