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Agreement Between Tenants In Common
1. Parties. Agreement dated [date] between [name] of [address] (First Party), and [name] of [address] (Second Party). First Party and Second Party are sometimes referred to individually as "tenant in common," and collectively as "tenants in common" in this Agreement.
2. Identity of Property. First Party and Second Party have purchased and now each own an undivided one-half interest, as tenants in common, in certain real property located in [county, state], including all buildings and improvements located on such property, more particularly described in Exhibit "A" attached [omitted] (Property).
3. Intent of Parties. First Party and Second Party wish to define their rights and obligations with respect to the Property and, therefore, have executed this Agreement.
4. Exclusive Use. First Party grants to Second Party a right of exclusive occupancy and use of the Property. Such right shall exist until the death of Second Party or the termination of this Agreement in accordance with its terms.
4. Exclusive Use. First Party grants to Second Party a right of exclusive occupancy and use of the Property during the period [month and day] to [month and day] inclusive, in each calendar year. Second Party grants to First Party a right of exclusive occupancy and use of the Property during the period [month and day] to [month and day] inclusive, in each calendar year.
5. Right to Lease. [Used if alternative clause is utilised in Paragraph 4]. First Party or Second Party, respectively, may lease the Property to a third person during all or any part of the period to which each is entitled to exclusive occupancy and use. All terms of such lease shall be at the sole discretion of the tenant in common entitled to exclusive occupancy and use. There is no obligation to share the rents and profits of any such lease with the tenant in common not entitled to occupancy and use. The tenant in common leasing the Property shall be solely responsible for repair of any and all damage to the Property or its furnishings and other contents caused by tenant in common's lessee, and shall indemnify the other tenant in common for any claim or liability arising out of any such lease that is not satisfied by any insurance policy maintained for the Property.
6. Expenses. First Party and Second Party shall each pay one half of any and all monthly payments due on a certain note and mortgage, executed in favor of [bank], each dated [date] (which mortgage was recorded at [----] [number] page [number]), that create a caveat on the Property.
Second Party shall pay all reasonable and ordinary expenses required for operation and maintenance of the Property (Operating Expenses), including taxes and other governmental assessments, insurance premiums (as to which both tenants in common must be named as insureds), fuel and other utility charges, and costs of ordinary repairs (defined as any repair not exceeding $250 in cost).
First Party shall reimburse Second Party, on demand, for one half of all Operating Expenses.
7. Capital Improvements and Repairs. The written consent of both tenants in common shall be required prior to commencement of any capital improvement or extraordinary repair (defined as any repair exceeding ........ dollars ($........) in cost) on or to the Property, or the grant of any mortgage, lien or other caveat secured by the Property.
8. Insurance Coverage. Second Party shall maintain the following insurance with respect to the Property: [type and level of coverage]. All such insurance policies shall name both tenants in common as insureds, so as to insure each party's full interest in the Property.
9. First Purchase Option.
a. First Party and Second Party each grants to the other a "right of first refusal" with respect to any sale of or other transfer of ownership to, or any subsequent mortgaging of, their respective interests in the Property (hereafter, a transfer).
b. The right of first refusal shall operate as follows:
i. As a condition to the right of either tenant in common to transfer the tenant in common's interest in the Property, the party who intends to make such transfer (Offeror) shall provide notice in writing to the other tenant in common (Offeree) of such intention. After an offer price is established as specified below, Offeror shall again provide notice in writing to Offeree of this intention to transfer Offeror's interest in the Property. Such notice shall specify all of the relevant terms of the proposed transfer. The giving of such notice by Offeror shall constitute an offer to sell Offeror's interest to Offeree. The price at which such offer is made shall be established as follows: (A) by agreement of both tenants in common; (B) if such agreement is not reached, by an appraisal to be made by a firm agreed upon by both tenants in common, with each tenant in common paying one half of the cost of such appraisal; or (C) in the event an appraiser cannot be agreed upon, each tenant in common shall designate, at the tenant in common's own expense, an appraisal firm and the average of the appraisals submitted by each firm shall constitute the offer price.
ii. Offeree shall have [number] days after receipt of a notice containing an offer price, established pursuant to Paragraph 9(b)(i), to accept such offer. If accepted, closing of such sale shall take place as soon thereafter as practicable, but no later than [number] days after acceptance of the offer.
iii. If Offeree does not accept such offer in accordance with Paragraph 9(b)(ii), the Property may be offered for sale to a third person on terms no more favourable than those set forth in the notice to Offeree. Such sale may not, however, be consummated on terms containing any reduction in net price (after payment of broker's commissions, if any) or any material change that is more favorable to a proposed purchaser, in any other terms than those contained in the notice to Offeree, unless and until Offeree is provided an additional right of first refusal with respect thereto in accordance with Paragraph 9(b)(i).
10. Intrafamily Transfers. Notwithstanding anything contained in Paragraph 9, the parties agree that each tenant in common has the right to transfer all or any part of tenant in common's interest in the Property to that party's spouse, child or children, and heirs or legatees without any right of first refusal existing in the other tenant in common.
11. Right of Partition. Each tenant in common irrevocably waives any and all right that party may have to maintain any action for participation as to that party's undivided interest in the Property.
12. Notices. All notices required to be sent under this Agreement shall be sent by certified mail, return receipt requested.
13. Disputes. This Agreement may be enforced by appropriate proceedings for injunctive relief or specific performance.
13. Arbitration. If any dispute arises as to the Property, which the parties cannot resolve within a reasonable time, either party may require that the dispute be submitted to arbitration. Arbitration shall be conducted in [city or county] in accordance with the rules then existing of the American Arbitration Association or like organization. The decision of the arbitrator shall be conclusive and binding on both parties, and judgment on such award may be entered in any court having jurisdiction. The expenses of arbitration shall be shared equally by the parties, but each party shall be solely responsible for the fees of each party's own lawyer.
14. Amendments. This Agreement may not be changed except by agreement, in writing, between the parties.
15. Binding Effect. This Agreement shall run with the land and inure to the benefit of the parties, their respective successors, heirs, and assigns.
16. Disclaimer of Partnership. Nothing contained in this Agreement shall be construed as creating a partnership or joint venture between the parties. Rather, it is understood that the parties are, and shall remain, tenants in common.
17. Termination. The obligations of each tenant in common under this Agreement shall terminate upon the sale of the party's interest in the Property, and the party will be relieved of all obligations accruing after such sale. This Agreement shall terminate upon the sale of the entire Property and the distribution of the net proceeds of such sale to the tenants in common, or at such other time as may be agreed upon, in writing, by both tenants in common.
18. Entire Agreement. This Agreement contains the entire agreement of the parties and there are no other promises or conditions in any other agreement whether oral or written. This Agreement supersedes any prior written or oral agreements between the parties.
19. No Representations. Neither party has made any representations or promises, other than those contained in this Agreement or in some further writing signed by the party making the representation or promise.
20. Applicable Law. This Agreement shall be governed by the laws of the State of [State].
IN WITNESS WHEREOF, this Agreement has been signed on the date first above written.