Lop-Sided Co-Ownerships

Focus on Real Estate - November 20

A Co‐Owners' Agreement (COA) for a heavily lopsided bi‐lateral co‐ownership (such as when one co‐owner holds a 75% undivided interest and the other co‐owner holds 25%) should look quite different than a COA for a 50/50% co‐ownership. In the case of the lop‐sided co‐ownership, there is typically a trade off between control and liquidity:

1. the majority co‐owner wants to control all decisions, ie. no veto given to the minority coowner; and
2. the minority co‐owner is often comfortable with this so long as it has a way to bring an unhappy co‐ownership to an end, either through a buy‐out of the majority co‐owner or through some form of liquidity.