What to know about buying property with multiple people: [an extract from an article written by: Michelle Cohen, Principal at Leapfrog Johannesburg North East – in property24 – 26 September 2024]
It’s not uncommon for two people to buy a property together. In fact, it is often the only way first-time buyers can get onto the property ladder. And while spouses or partners, or a couple of friends, buying together is par for the course, there is also the option to make the circle bigger, significantly so.
… first and foremost, to view property co-ownership as a business transaction. “Whether you’re the co-owner of a property with one other person or eight other people, make sure you have an agreement in place that governs how the property will be managed – in good times and bad.”
- Split the difference:
… it is a good idea to decide upfront how expenses like property maintenance, rates and taxes, and levies will be split between the owners. - When the road forks:
…As with any business transaction, or indeed any relationship, conflicts and disputes do arise.
While a lawyer needs to draw up the contract, a trusted property advisor can guide and advise you on how to structure the agreement to protect and promote the interest of all parties involved.
As a minimum, the agreement should address the following concerns:
- Will any of the owners occupy the property? What are the implications for those who don’t?
- What happens in the case of death of one of the co-owners
- What happens if one of the co-owners is unable to continue contributing financially,
- Whether to the bond repayment or the other expenses?
- What happens if one of the co-owners wants to sell their share on the property?
- Do the other owners immediately have the first right of refusal?
- Should the property be sold, how will the potential profits or losses be divided?
- What happens if not all co-owners are able to contribute to a deposit?
- How is the responsibility of property maintenance to be divided?
- Are any of the co-owners allowed to use the property as collateral for another
loan, or permitted to draw from the access loan?
The Original Full Article can be Viewed here: → https://www.property24.com/articles/what-to-know-about-buying-property-with-multiple-people/32386