Buying property with someone you trust, whether a partner, a close friend or a family member, can feel like a smart move. Shared cost, shared responsibility, shared opportunity. But as many property lawyers will tell you, it’s also one of the most common sources of legal dispute in Australia.

Without clear documentation upfront, assumptions around who owns what, who pays what and what happens if circumstances change can easily unravel — with costly, emotionally draining consequences.

In this article, we explain why co‑ownership must be carefully planned and the key issues you should address before signing contracts. Drawing on real Australian precedents, we highlight examples where ‘buying together’ went wrong.

What Goes Wrong — And Why

When two or more people go into a property purchase together, the legal picture depends on how the property is held: as joint tenants or tenants in common, or under a trust or business structure. Each form carries different rights and different risks.

Joint Tenants

Where property is held as Joint Tenants, all registered owners own the whole property, not distinct shares.

When one owner dies, the property automatically passes to the surviving joint tenant(s), regardless of what their Will says.

This ‘right of survivorship’ can create serious problems if your intention was to pass your share to a child, spouse or someone outside the co‑ownership group.

Tenants in Common

Where a property is held as Tenants in Common, each owner holds a defined share (which may be equal or unequal).

If one owner dies, their share forms part of their estate to be distributed under their Will (or under intestacy rules).

Shares can reflect financial contributions, but unless clearly recorded, disputes often arise over who paid what and who gets what.

Beyond the legal title, disputes often stem from misunderstandings or lack of clarity about:

Financial contributions — who paid the deposit, mortgage repayments, maintenance, rates and improvements?
Ongoing expenses — who covers running costs, repairs, taxes and upkeep?
Use and occupation — is one owner living there or is it rented? What happens if one owner wants to move on or sell?
Exiting the arrangement — can one co-owner force a sale? Do other co-owners have the right to buy their share? What if someone dies?
Estate planning conflicts — does survivorship override your Will?

When verbal agreements, good faith and trust are all people rely on, problems often emerge when relationships shift, circumstances change or someone passes away.

Key Considerations Before You Buy: What to Agree Now

If you’re buying property with someone else, here are the core questions to answer before you sign:

Ownership structure — will you be joint tenants or tenants in common? If tenants in common, what proportion does each person own?
Financial contributions — document who’s paying for what (deposit, mortgage repayments, renovations, maintenance).
Ongoing costs and responsibilities — who pays rates, upkeep, insurance, repairs? How are expenses shared?
Exit strategies — what happens if one person wants to sell their share, refinance or move overseas? Is there a buy‑out clause?
Death or incapacity — if one owner dies or becomes unable to manage their share, what happens to their interest?
Decision‑making process — who makes decisions about repairs, sale, rental, improvements, tenancy? What about disagreements?
Legal agreement — document everything in a co-ownership agreement (or shareholders’/partnership agreement if business structure is involved), signed by all parties before the purchase proceeds.

Getting this clarity early avoids confusion later, preserves relationships and saves time and costs if conflicts arise.

When It Goes Wrong: Two Australian Case Studies

To understand why this matters, here are two significant Australian (or Australia‑relevant) cases where co‑ownership or contribution disputes caused major headaches — and legal intervention.

1. Ryan v Dries (2003) — Improvements, mortgage payments and compensation

In this case, parties purchased a property as joint tenants (legal ownership) but one party made the majority of mortgage repayments, maintenance and improvements.

When conflict later arose, the court found that equity could impose a trust, effectively converting the arrangement into a tenancy in common to ensure the paying party was recognised and compensated for their contributions.

Lesson: Without clear agreement, courts may re‑characterise legal ownership to reflect actual financial contributions or responsibilities, potentially overriding what’s on the title.

2. Rural Co‑ownership Dispute — Forced sale under statute (eg application under Conveyancing Act 1919 (NSW) Section 66G)

In a case involving father and son who jointly owned rural land as tenants in common, after the father passed away the executor attempted to sell the father’s share. The son objected. The dispute ended up in court where a sale order was sought under Section 66G of the Conveyancing Act, a statutory mechanism that allows one co‑owner to force a sale or partition when the other remains uncooperative.

The court rejected a claim for a common‑intention constructive trust (because of insufficient evidence) but ordered sale and costs against the resisting co-owner.

Lesson: Even where you share legal title and anticipate co‑ownership, when relationships break down or when one party refuses to cooperate, the only resolution may be a court‑ordered sale. This often carries high legal costs, delays and emotional stress.

The Hidden Costs of Poor Planning

When co‑ownership goes wrong:

Legal costs — court proceedings, trustee costs, statutory fees and solicitor fees.
Time delays — estates tied up for months or years with uncertainty for beneficiaries or co-owners.
Loss of value — forced sales under duress may net less than fair market value and improvements may not be properly accounted for.
Family breakdown — disputes over property often exacerbate existing relationship tensions, sometimes irreparably.
Emotional stress — what was meant to be a secure asset becomes a source of conflict, mistrust and worry.

These financial, emotional and relational costs often far outweigh the effort of preparing a proper co‑ownership agreement before purchase.

Best Practice: Professional Agreements & Legal Advice

If you’re considering a joint property purchase:

Engage a property lawyer (or conveyancer) preferably as soon as you begin discussions and certainly before any contracts are signed.
Decide on ownership structure, joint tenancy or tenancy in common, and record the decision in writing.
Draft a co-ownership agreement (or shareholders’/partnership agreement if a business structure is involved). Include the contribution schedule, responsibilities, exit mechanism, dispute resolution and sale/buy-out options.
Record financial contributions and future payments including deposit, mortgage repayments, improvements and maintenance, rates/fees.
Agree on use, occupation and decision-making rules such as who lives there, who rents, who consents to major decisions and what happens in a deadlock.
Prepare for death or incapacity by including death or incapacitation clauses, right to buy-out or pre-agreed sale procedures.
Regular review — life changes, finances change and relationships evolve. Update agreements and title structures when needed.
Communicate openly — make sure all parties (and future beneficiaries) understand intentions and agree to the arrangements.

This process takes careful thought but it sets a foundation for clarity, fairness and long-term peace of mind.

Why Families Often Avoid This — And Why That’s Risky

You might hear these objections:

“We’re just good friends / family — we trust each other.”
“It’s too complicated / too expensive to set up properly.”
“We’ll deal with it if anything changes.”
“It’s just a shared home, nothing fancy.”

But trust, good intentions and informal arrangements rarely survive the pressures of time, changing relationships, death, financial hardship or diverging goals.

What feels simple today may become complicated tomorrow and by then, repairing the relationship or reconstructing the agreement may be impossible.

When Joint Ownership Makes Sense — And When It Doesn’t

Good reasons to co‑own:

You and your co‑owners have similar long-term intentions for the property (e.g. long-term home, shared investment and agreed exit strategy).
You want transparent shared ownership with predetermined shares and responsibilities.
You’re investing as a team, pooling resources to access a property you couldn’t afford alone.

When to reconsider or use a different structure:

Where relationships are informal, uncertain or likely to change over time (friends, casual partnerships).
Where parties have unequal contributions, different long-term goals or expectations.
Where there are business interests, complicated finances, blended families or multiple properties.
Where death or incapacity could cause real hardship or conflict for surviving co-owners.

In many of these cases, a special-purpose vehicle (trust, company, partnership) or professional trust / property management structure, combined with agreements, might offer greater protection.

How Our Property Law Team Helps

At Aubrey Brown Lawyers, we assist clients to set up co‑ownership arrangements that reflect both financial reality and personal dynamics. Our services include:

Advising on ownership structure (joint tenancy, tenants in common or trust).
Preparing co‑ownership agreements or partnership/shareholder agreements.
Documenting contribution schedules, ongoing responsibilities, exit mechanism, and dispute resolution procedures.
Reviewing existing property holdings, especially where title doesn’t reflect actual contributions, to clarify or rectify ownership interests.
Acting where disputes arise including negotiation, mediation or litigation, including applications under mechanisms like Section 66G (NSW) to force sale or partition when co-owners are deadlocked.

Our goal is to help you enter a co-ownership arrangement with confidence, protecting your interests should circumstances shift.

Final Thoughts — Co-Ownership Isn’t a Casual Commitment

Buying property with someone else can unlock opportunities but it isn’t just a transaction. It’s a long-term partnership that demands clarity, agreement and mutual understanding.

Without proper planning, what begins as shared ambition can easily become shared conflict.

For a lasting, fair and secure co‑ownership arrangement, plan carefully, document fully and seek professional legal advice before you sign.

If you’d like to talk more about how to protect yourself when buying property with someone else, or want help drafting a co‑ownership agreement, please call our Property Law team on (02) 4350 3333.

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