Owning property with friends and family
With a continuing rise in property prices, we are starting to see an increase in co-ownership arrangements where family and friends purchase homes together. Many people are seeing this as a good way to get into the property market.
While this can be a practical option, there can be unintended complications if the parties obligations and expectations are not clearly set out. Even though the property is owned with family or a close friend, disputes and unexpected events can happen and we highly recommend that the parties enter into a Property Sharing Agreement.
While each situation and property is unique, a Property Sharing Agreement would generally cover the following:
- How much each party is contributing.
- What lending is required and how this is to be dealt with between the parties.
- How outgoings are dealt with (such as power, rates and insurance).
- Who is responsible for the maintenance of the property and how these costs are shared.
- What happens if someone wants to sell the property or terminate the co-ownership
- What happens if you want to do renovations to the property.
- What happens if one party dies.
- What happens with any gains or losses and how are these to be split between the parties if the property is sold.
- What happens if there is a dispute between the parties.
- What happens if someone gets a new partner.
Being clear on the parties responsibilities at the outset, can ensure that you have the ability to deal with any expected or unexpected future events. A well drafted Property Sharing Agreement will give a clear process to follow and save all parties unnecessary legal fees in the future.
The Property team at Saunders Robinson Brown have experience in dealing with these matters and would be happy to discuss these with you.
The above information is of general nature only. You should contact our firm for advice relating to you specific circumstances.
About Chris Boivin
Chris is a Partner advising clients on a wide range of matters. He assists with both commercial, rural and residential property matters, as well as business transactions and asset planning.
About Caitlin Stack
Caitlin joined Saunders Robinson Brown in 2018. She is a member of our Property Team and assists clients with residential property matters and associated financing.