Buying with friends

Buying a foreign property with friends can be an excellent idea – not only does it halve the money you have to put in, but you can both use it as a holiday home if you want to. However, the old adage ‘never mix business with pleasure’ holds true – you need to think about the future and what happens if you fall out with each other, or you each have different ideas of what to do with the property in a few years time.

It is a good idea to have some sort of legal document put together at the time of the sale to ensure you are both happy with the purchase and the future of the property. Some of things you may want to consider are:

– Create a legal document which clearly states what all the financial obligations are
– Create an agreement that decides how future transfers of ownership will be handled
– Establish a ‘right of refusal’. This gives the others owners first dibbs at buying the other half’s part of the property first.
– Decide what happens if one person dies – do the remaining owners have the right to buy out whoever inherits the property? Do you both make wills in which the property is left to the other owner?
– Decide what will happen if one person falls behind in the mortgage payments. Perhaps they will sell their share to the other partners.
– State clearly who is physically responsible for the property
– Decide whether to have a specific fund on the side for repairs and maintenance.
– State when each person is allowed to use the property, or draw up a scheme which shows when each person is allowed to stay at the property.
– Decide on the usage of the property – is it for rental? Can friends stay?
– Decide on whether pets, smoking and parties will be allowed at the property

Even if you feel that you are the best of friends now, you can never predict the future therefore getting a legal document drawn up now can save you a lot of hassle, expense and aggravation in the future.

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