buying with family

G'day guys.... I may have an opportunity to purchase my first IP. My brother has said he can come up with the deposit if I service the loan - so it's a shared purchase. I will be living in the property with my family.

I was wondering who I need to go to to get something legal drawn up, so that if I move out and start renting it out, or I sell it, we have a fair and legal agreement to refer to - stating what percentage of earnings or profit will go to each party and so on.

Thanks for your advice!
 
G'day guys.... I may have an opportunity to purchase my first IP.
Good :)

My brother has said he can come up with the deposit if I service the loan - so it's a shared purchase.
OK a JV - fine. But you may be better off just paying your brother interest on his loan to you or working out some kind of 'shared equity' scheme like some bank loans (used to) have.

I will be living in the property with my family.
Then it WILL NOT be an IP.;)

I was wondering who I need to go to to get something legal drawn up, so that if I move out and start renting it out, or I sell it, we have a fair and legal agreement to refer to - stating what percentage of earnings or profit will go to each party and so on.
Yes absolutely, otherwise it will end in tears. You both need an exit strategy in case he wants his deposit back or you want to move on or etc etc happens.
 
thanks for your advice...sorry, not an IP, a PPOR. BUT, we are looking at making it an IP later on down the track.

So who would we approach to draw up this type of legal agreement?
 
happy, whenever we have done internal family things we normally discuss it and make sure we all understand each other's positions. If that works out then we go thru all the possibilities:
what if I die, what if he dies, what if I can't repay, what if he wants out, what if we want to bring in another partner, what if we want to do a reno, what if, what if, etc etc.

You will need to do this anyway, even if you use a solicitor to draw up the actual agreement.
For ourselves, we have just drawn it up and signed off on it and we each have a copy. That suits us - but it may not suit everybody.
 
So if we discuss things, agree on all the possibilities, draw up our own agreement and both sign - is this legally binding? Or do we need to have a solicitor to run over it? In this case, are there solicitors who specialise in property law?

Thanks again for your interest.
 
So if we discuss things, agree on all the possibilities, draw up our own agreement and both sign - is this legally binding?
Yes, to the extent that it does not contravene any other laws that you may or may not be aware of.

Or do we need to have a solicitor to run over it?
It would not hurt but you'll need one to look after your interests and your brother needs one to look after his. One solicitor cannot look after you both IMO. It really depends on how you all get along to start with and how reliable or otherwise you are.

In this case, are there solicitors who specialise in property law?
Yes, but I have none to recommed to you

Also before you go to all that expense, it might be worthwhile to see a good MB who will be able to advise if a lender would be happy with the arrangement - i.e. brother deposit & whether or not he is to be on title & if so whether he loses his future rights to a FHOG and whether he registers his interest on the property with a caveat etc.
 
It may be better to leave your bro off title and do it in your name with the side agreement - it could count as your main residence and be CGT exempt. but do write everything down and plan out who will do what and who will pay for what etc. Also what happens if he wants to sell and you don't and vice versa -what happens if you don't qualify for finance or can't get the funds to pay him out etc.
 
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