Q: Looking to buy a home as tenants in common in Colorado, is it ok that the other co-owner lives out of state?
The other co-owner also owns another residence, would this new residence be considered a vacation home and would they have to pay extra taxes? Finally, do both parties have to take out the mortgage jointly, or can just one party take out the mortgage?
A:
There is no requirement that a joint property owner reside in Colorado. All the documents can be faxed/mailed/sent via email and signed out of Colorado. I'm not sure what you mean by extra taxes (there is no special tax for second homes, just reduced deductions versus a domicile/primary residence). The classification of property to the out-of-state owner is defined by its use. As a joint owner the co-owner is jointly and separately liable for taxes and debts (mortgage).
It is possible to create a separate agreement that establishes ownership and obligations (i.e. who pays taxes/mortgage and maintenance)--this should be recorded with the deed. It is possible to as a single tenant take-out a mortgage on their portion of the land, but in reality nearly all lenders require that the other tenant sign the loan agreement (for the few that do, the equity available is radically reduced and usually only applies to large tracts of land). I recommend that you consult with an attorney because amending deeds and filing restrictions is MUCH easier (and cheaper) if the filings occur with the land/home sale rather than after the fact.
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