The Benefits of a Written Agreement When Sharing Property
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If you have decided to share your home, car, or other property with someone else (other than a spouse or close relation) don't rely on mere oral discussion regarding the various terms and rules. There are lots of good reasons to get your sharing agreement in writing, as described below.
A written sharing agreement:
Helps prevent amnesia. Putting information and decisions on paper means keeping less of it in your head; there's a limit to how many details we can keep organized in our brains. Even with people whom you trust completely, you may have had the experience of remembering the same event or conversation differently. Making a written agreement is an easy way to avoid confusion and potential conflict. You won't have to figure out (or argue over) whose memory is accurate, because you have the answer in writing.
Provides a handy reference. If anyone in the group has a question, you can just look up the answer. Having documents on hand also provides a quick and easy way to orient people who join an existing sharing group.
Leads to a well-thought-out plan. Putting ideas in writing helps a group think through details that might not have been ironed out during discussions. Plans that seem really great over a glass of wine don't always make as much sense when you lay them out on paper.
Encourages consistency. Having a written agreement provides one set of procedures for everyone to follow. For example, if a group rotates its secretary and treasurer, each person might track money and keep records a little differently, which could create an administrative muddle. Providing the secretary and treasurer with written procedures will help prevent that problem.
Promotes group harmony. Documents keep everyone "on the same page" and prevent disputes from arising. And if disputes do arise, the documents serve as a good reference for sorting them out. The documents may also provide set guidelines for how to resolve a dispute.
Seals the deal. Some people are more comfortable committing their time, money, and energy to something if they are sure that everyone else is committed. People want to feel protected and assured that the other member(s) of the group won't bow out suddenly and leave them in a bad spot. Written agreements can also help weed out people who aren't completely committed. Having to actually sign an agreement creates a moment of truth that can help someone realize he or she isn't really ready—or willing—to take on the responsibilities the sharing arrangement will require.
Creates group recognition and legitimacy. If you will be dealing with people or institutions outside of your group (for example, if your group will enter into contracts, hire an accountant or lawyer, apply for a loan, or open a bank account), a signed agreement will encourage outsiders to recognize you as a group. For groups that plan to borrow money, a signed agreement will ensure the lender that members have made a financial commitment to that group. In fact, some lenders will require a written agreement to approve a loan.
Lets YOU make the rules. If you don't have a written agreement, local and state law may dictate some of the rules for your group, especially if a dispute arises. For example, if Horton and Babar own a house as tenants in common and do not make an agreement about how one of them could later sell his share, a dispute could arise that winds up in court—where a judge gets to decide how the property will be handled. The judge might force a sale of the whole property and decide how to distribute the proceeds. If Horton and Babar had made their own agreement, they would have been able to decide this issue for themselves (and possibly avoid the problem entirely).
Lets you share your sharing agreement. One really good reason to put your decisions in writing is that people are going to come and say to you: "Wow!! How did you arrange your awesome dog walking co-op? I'd like to do the same with my neighbors." Then you will proudly whip out your agreement and procedures and send them off on their wagging way.
Makes for easier enforcement if you want it. A written agreement is much easier to enforce than an oral agreement. This is a benefit of writing things down, but it can also lead to anxiety. Maybe your group wants to put things in writing just to make sure your plan is sound and everyone's on the same page, but doesn't want to create a legally enforceable contract. In that case, you can write at the end: "We do not intend for this to be a legally binding agreement. We have written this agreement in the spirit of cooperation and to help clarify our plans related to sharing dog walking responsibilities."