Frequently asked questions – property sharing advice
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What happens if I fall out with my sharer(s) or a co-buyer dies?
Hopefully this will not happen! However, it is advisable to discuss this type of situation with an experienced solicitor before you co- buy, who will advise you on various contracts such as a 'Declaration of Trust' a 'Co-Habitation Agreement' and a 'Will'. Make sure you and your co-buyers have these agreements in place so that in the event of a fall out or a change in circumstances, everyone knows and has agreed what will happen, i.e. The asset is sold completely or a new sharer is found to take over from the person who no longer wants to be part of the property share.
What is a Declaration of Trust?
Also known as a Trust Deed. It is a legal document that outlines the arrangements between co-buyers, such as how much each co-buyer owns of the property and how the property will be sold if necessary, for what ever the reason – fall out, death of a co-buyer etc.
What is a Co-Habitation Agreement?
Just for those co-buying property and intending to live together or share a holiday home. This document clarifies each co-buyer's financial responsibilities, who owns what, how the household will be run, what the ground rules are. It is a document that helps everyone know where they stand from the beginning.
What is a Will?
A legal document that expresses who you want to gift your estate (what you own) to when you die. If you do not have a Will, 'Intestacy' (the government) will take responsibility and decide how your assets will be divided.
What are the advantages to buying property with others?
- You share the costs (initial costs, maintenance costs and running costs).
- You share any worries, responsibilities and decisions.
- You share the achievements and joy!
- It makes something that may have been unaffordable, affordable.
- You share any work involved in maintaining the shared property.
Should we have a co-ownership agreement?
It is advisable to have a formal agreement written up between all sharers, that way everyone knows what they own and where they stand. See Declaration of Trust.