Top Tips When Buying Joint Property
Posted on: 25 November 2019
Would you want to buy a property with your friends? However, issues might arise, such as the property is too expensive or maybe you need help managing the property. Below is a comprehensive guide on the various considerations you should make when purchasing joint property.
Your Goals Must Align
How will you use the property? Ask the other investors to give their opinion before purchasing the property. For instance, if you are buying land, some people would want to subdivide the land, others would want to develop the property while others would want to flip the property. You must all agree on how you will use the property. Otherwise, you risk conflicts and legal suits in the future.
Work With an Experienced Conveyancer
Protect your investment by working with an experienced conveyancer. The conveyancer should be licensed to work in your state. When working with an online conveyancer, he or she should have a physical office. The conveyancer will:
- Conduct due diligence to ensure the property is not under any dispute and that it is registered in the seller's name.
- Organise a house inspection to check for signs of land contamination, presence of pests and the condition of structural features such as the roof, floor and pillars.
- Negotiate the purchase price and explain the terms of the contract of sale.
- Organise your paperwork and negotiate interest rates on your behalf if you are purchasing with a mortgage.
Written Agreements
You will need a contract to formalise your agreement. It should cover the following:
- What is the share of each member in the property?
- What would happen if a shareholder wants to leave?
- Are investors allowed to sell their shares in the property?
- What happens if a shareholder dies before you sell the property?
- What happens when a shareholder cannot afford to make a mortgage payment due to loss of employment or illness?
Preferably, the shareholders should get independent legal advice before signing the contract. It is a guarantee that they understand the terms and conditions of the agreement.
Management
There are two ways to manage the joint property. Each of the shareholders could be assigned a specific task in managing the property. You could also opt to engage a property manager to run the property. The property manager should take charge of repairs and handle the financial aspects of the business. He or she should report to the management committee appointed by the shareholders.
Purchasing joint property is now easy with the above tips. Align your goals, work with a property conveyancing service, have a written agreement and decide how to manage the property.
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