CO-OWNERSHIP AND CONDOMINIUM
Updated: Mar 17, 2022
Co-ownership refers to legal relations in which two or more entities have equal rights to the use and enjoyment of property. Co-ownership relationships may satisfy the preferences of some owners, and predefined categories of co-ownership, as opposed to contractually defined relations, may allow parties to satisfy these preferences at a relatively low cost. However, shared ownership results in coordination and externality problems, which the law attempts to mitigate in numerous ways, including judicial oversight of ‘reasonableness’ (as in the law of waste) or fiduciary duties; ending the co-ownership relation (through the right of partition) or providing rules that seek to optimize the joint decision-making process (such as compulsory unitization). A major area of growth in shared ownership is in condominium developments, where entities own some property individually while co-owning common facilities. This permits parties to take advantage of economies of scale and the joint provision of common goods. Condominium arrangements are governed by a combination of contract, statute, and judicial law, and typically include democratic decision-making structures intended to minimize the sum of decision-making costs (gathering information, voting, and bargaining) and the cost of erroneous decisions.
Keywords: Cotenancy, Co-ownership, Condominium, Cooperative, Communal Ownership