In today’s housing market many are trying to find alternative ways to stretch their buying power. One way is by purchasing a home with a friend, relative, or unmarried partner. The benefit of buying a home with someone else is that you can likely afford a larger loan than you might have qualified for alone and can split the costs of home ownership. There are, however, drawbacks to purchasing a home jointly – such as differing opinions or misunderstandings.
Creating an agreement, commonly called a Joint Ownership Agreement or Co-Ownership Agreement, prior to entering into a home purchase can provide a roadmap to the future. A Co-Ownership Agreement is an agreement that lays out the terms and conditions of your joint home purchase. Co-Ownership Agreements create an agreement between the parties regarding what happens if one or both of parties want out of the arrangement. This type of agreement lays out the general expectations of the parties regarding such things as: maintenance, allocation of costs, renovation decisions, allocation of profits or losses, general household expectations, etc. The agreement also sets forth the procedures for resolution of disputes or for settling disputes. Failing to create a written agreement can lead to costly legal fees, loss of investment, and damage to the relationship.
If you are contemplating purchasing a home with a friend, relative, or significant other, consider allowing Kalil & LaCount to draft you a Co-Ownership Agreement. Creation of an agreement up front will provide you with peace of mind, avoid disputes and provide mechanisms for dispute resolution. Having a clear understanding of each other’s expectations can make your home ownership investment profitable and uneventful.