When two individuals own a piece of real estate together, they are acting like business partners. The real estate lawyers at Kailua Kona, HI, law firm DeVries & Associates PC encourage property co-owners to view each other in that regard, and in doing so, to show one another the same duty of care that business partners would.
7 Essential Duties of Property Co-Owners
The real estate lawyers at DeVries & Associates, P.C. explain the seven essential duties that business partners and co-owners of real estate owe each other:
1. Loyalty & Good Faith
Each partner must act in good faith toward and not take advantage of the other. This includes not concealing any money or assets generated as a result of the real estate property
2. Reasonable Care.
Each partner has a duty to use reasonable care when performing a business transaction. If they fail to use reasonable care, they are liable for any losses resulting from their negligence.
Each partner must inform the other of all matters relevant to the partnership, including the buying, selling, or renting of the property.
Each partner has the right to take an equal part in managing the real estate, regardless of either party’s financial contribution to the property.
5. Share of Profits
Each partner is entitled to equal share of the profits unless otherwise stated in a legal and binding contract.
6. Repayment of Loans
If either party pays his or her own money to cover expenses incurred on the property’s behalf, they are entitled to reimbursement from the property’s profits.
7. Contribution & Indemnity
If one partner pays more than his or her proportionate share of debts incurred by the piece of real estate, they have a right to reimbursement from the other partner.