Whatshot
Must-knows for buying a property with a partner or friend
Must-knows for buying a property with a partner or friend
Date: 2018-06-08
With fewer couples nowadays getting married but choosing rather to co-habit, or friends choosing to share as they cannot afford something on their own, comes the trend of co-owning property.
Co-ownership is a great way to get onto the property ladder, but does need careful consideration in drawing up a contract between the owners so that there is no miscommunication or misconception of how the property will be dealt with should they part or decide to sell.
There are many things to consider when buying a property with another person, and the following should be included in the agreement between the co-owners:
Who will occupy the property Will it be one person or be shared
Who will be applying for finance, paying in cash or contributing the deposit, and in what proportion if this is to be shared
When maintenance or repairs are needed, what percentage will each owner pay It is assumed that the contributions are in direct ratio to the share of the property owned, unless stipulated.
If the property or share in the property is sold, how will the profits (or losses) be split
Will the sale of a share in the property be restricted by the other owner(s)
Is there a chance a co-owner might use this property as collateral for another loan or draw from an access bond
What happens in the case of death of one of the co-owners, or inability to contribute to future payments
What happens if the co-owners decide to part, and is there a dispute resolution in place if they do so on unfriendly terms
It is also best to discuss before purchasing what future plans each co-owner has for his share, in case their intention is not to hold on to the investment for the same period of time the others need. Buying and selling property is expensive, and investments should always be seen as long term, for no shorter than ten years at a time.