Top 5 things to consider first before buying property with family or friends

Property sharing agreement

It’s a good idea to have your solicitor draw up a property sharing agreement or a co-ownership agreement that outlines the important details like what happens when one of you decides to sell, how much share each person has, and what costs you’re each liable for.

Shared responsibilities

As well as sharing the up-front cost of buying a property – securing finance, deposit and any taxes - when you buy a property with friends or family you share the responsibilities that go along with owning your own property – so the ongoing bills, repairs and maintenance, insurance costs and any other financial commitments are shared. These should be clearly documented and agreed in the property sharing agreement.

Successful sharing

Sharing a mortgage successfully depends on being transparent and direct about the important details. That means discussing monthly payments and bills that will need to be paid, setting boundaries and agreeing on responsibilities, and finding the best way to hold each other accountable.

The legal implications

It’s important you carefully consider the legal implications of co-ownership before making your decision. If all co-owners sign the loan documentation, each is jointly and severally liable for each other’s debt. So, if one of the friends or family fails to meet their loan repayments, you could end up having to cover their shortfall.

Unpredictable circumstances

Consider buying property with like-minded people who have similar goals to you. Make sure they’re in a good financial position to meet their share of repayments and financial responsibilities.

Source

Shannon CorbettComment