As property prices continue to increase (especially if you live in Sydney) more and more people are combining their buying power to buy the house of their dreams, or just get into the market. It’s no secret that buying a property with a friend or relative is a great way to get a foothold in the property market, but it’s not a decision that should be taken lightly.
Often, when you are dealing with family or friends, people tend to overlook the formalities which only provides uncertainty and a recipe for disaster for when disputes do arise. Having a well written and specific co-purchasers agreement tailored for your situation can help everybody understand their rights and responsibilities so there are no awkward situations later on.
Even the best of friends and closest of relatives can fall out or have a dispute, especially when there is money involved, and if that was to happen, an agreement can provide an exit strategy that everyone has agreed upon at the beginning, to minimise or eliminate any further disputes.
What can a Co-Purchasers Agreement consist of?
How the property is owned.
The proportion of each person’s interest in the property and their liability for the upkeep of the property and any maintenance/repairs required to be taken in respect to the property.
Whether each person can or has borrowed against the property.
How the parties can end the agreement (in the event that a disagreement arises).
How the parties can transfer their share/interest in the property.
Whether the parties can force the sale of the property.
How the proceeds of the property are to be applied to discharge any of the parties’ liabilities and in what order as to how the net proceeds are to then be divided between the parties.
A mechanism for one party to buy the other party out or alternatively for the sale of the property which includes the process of appointing an Agent to sell the property including setting the reserve price.
It is our experience that often if there is a falling out between couples, friends or relations. Even the most basic/simple things usually cannot be agreed upon (for example, which real estate agent to appoint to sell the property). If you have a properly drafted Agreement, it will no doubt avoid any further disputes between the parties and assist with an amicable sale or transfer of the property, which will obviously save time, effort and costs.
Contact us to find out more or to arrange a consultation with an experienced property lawyer in Sydney.