To battle the rise in cost of living, interest when you separate rates and property prices, we are seeing an increase in parents, siblings and friends pooling their funds together to purchase their dream home.
Sounds like a perfect solution on face value. It is important, however, to go into these transactions with your eyes wide open and make an informed decision after receiving financial and legal advice.
If you’re still keen to proceed, a co-ownership agreement can be a helpful way to:
• avoid issues with differing interpretations of the arrangement; and
• plan for future issues that may arise if the relationship turns sour.
The terms of the co-ownership agreement will depend on the parties’ unique circumstances. The following are common matters to consider:
• the ownership percentage;
• contributions to the property purchase price and ongoing bills;
• the plans or intentions with respect to the property;
• what happens if a person doesn’t pay their share?; and
• what happens if someone wants to end the deal and get their financial interest in the property back?
Considering and dealing with matters at the outset (and putting it in writing) will help ensure the arrangement has the greatest chance of success.