Buying property with friends

[Mrs Bird]

Hi guys,

We have recently bought a property with our two friends. My husband and I own 50% and our friends have a 25% SHARE EACH. Many times we have discussed writing up a contract covering all issues including death, marriage breakups , selling in the future etc but we still havent done anything about it. Despite all our good intentions we need to do this document for all our benefit.

My question is do we need to go through a solicitor or can we complete our own contract ourselves that would be legally binding.

Has anybody been in the same situation and what approach was taken?

Thanks Mrs Bird

 

[INVESTRON]

a solicitors agreement would be best, but you may be able to get away with making you own agreement and you all signing in front of a justice of the peace.

it may already be too late, because the title just shows 4 owners and not what % each owns, so as far as it's concerned, you all have equal shares.

i think.

 

[NigelW]

Originally posted by Mrs Bird
Hi guys,

We have recently bought a property with our two friends. My husband and I own 50% and our friends have a 25% SHARE EACH. Many times we have discussed writing up a contract covering all issues including death, marriage breakups , selling in the future etc but we still havent done anything about it. Despite all our good intentions we need to do this document for all our benefit.

My question is do we need to go through a solicitor or can we complete our own contract ourselves that would be legally binding.

Has anybody been in the same situation and what approach was taken?

Thanks Mrs Bird

Go see your respective solicitors to get this sorted out.

Things to think about are:

- are you all joint tenants or tenants in common - makes a big
difference. ie the last survivor could end up with it all - which I gather is NOT intended.
- what do your respective wills say, do you all have wills, do they deal with property like this?
- as between you and your spouse is this the best split from an asset ptr and tax perspective?

I don't want to lecture...but see somebody who knows what they're doing...a small fee now will give you peace of mind for years to come. You might all be best of friends now, but people can turn nasty when money's involved.

With respect to the other posters, don't take shortcuts now or be a cheapskate. You probably paid quite a bit of money to buy the property. Spend a little bit more now to make sure there's no arguments about who owns what.

You wouldn't try DIY heart surgery, so don't try DIY lawyering - it could be damaging to your wealth.

 

[Kevin Hockey]

Hi Mrs Bird,

Love your pic by the way.

You should also talk to your accountant as you will probably find it is best set up as a trust. I am currently looking at buying some development sites with my Nephew and my accountant suggested this for me. Having heard DaleGG's seminar last night I am now convinced this is the way to go.

Good luck with it.

Kev

www.nundahrealestate.com.au

 

[Sunstone]

Dear Mrs Bird,

Agree with Nigel, buying anything with partners is difficult at the best of times. Buying without a legal document to detail responsibilities and processes when things WILL go wrong is akin to walking where angels fear to tread.

Visit a solicitor. Get the property put into a unit trust and document it. For the next one seriously consider what factors led you to have a partner and the pros and cons you experience with this. Then consider would you do it for the next one and why or why not............?

Partners do have their benefits but they must be carefully analysed and due diligence MUST be made on your potential partners. A meeting I had recently with two potential business partners highlighted this. One potential partner whilst having some technical experience had no practical business money handling nous. Therefore if this party had unrestricted access to the business chequebook then it could have important ramifications for the other partners involved. This fact concerned myself.

In this case we have decided to keep on looking to find the right partner mix. However partners in a business have substantially more benefits and bring more expertise than a situation of having partners in purchasing an IP.


Investron,

Mate enable your personal messages in your profile. On the forum these are used much more frequently than e-mail and enable one to one communication. Also helpful when people put more in their profile

Cheers,

Sunstone.