Private Client
WHAT TO CONSIDER IF YOU’RE THINKING ABOUT BUYING A HOME WITH A SIBLING OR A FAMILY MEMBER
Where to start
The connection with family members and friends are some of the most meaningful relationships in life. It seems obvious that they would be ideal partners in a property purchase too – you have known each other for years and have a shared background. With the way property prices are going, the financial resources of a second person can make buying a house more accessible. There are many success stories, but also cautionary tales. Family dynamics are what shape us, and they can be very powerful. The charming brother that you’re so close to can also be a person who spontaneously invites friends to stay, will pay the agreed share of outgoings “next week”, and still thinks Mum will do the housework. The sister who always gets invites to the best parties may have spontaneous loud gatherings in the home you share.
What do we need to talk about?
It’s important to consider not only whether you can live together as adults, but also to reflect on financial contributions and arrangements. Things to discuss include:
- Who is contributing to the deposit/purchase price?
- Who will pay the mortgage?
- What happens if interest rates or your financial circumstances change?
- Will you get income protection insurance in case your employment situation changes?
- What if one of you wants a partner to move in (or another friend or sibling)?
- What if one of you wants to move out/go overseas, and wants the house sold? How will the remaining sibling or friend feel about that, and what will happen?
- When the value of the house changes, how will that change the amount each of you receive from any sale?
- Do either of you have the means to pay for unexpected repairs or maintenance?
Do we need a written agreement?
Buying a house together can seem like a wonderful idea, and it’s tempting to think that you won’t need to spend money with a lawyer to write down financial arrangements and how to sort out disputes. The cost of a written property agreement, and ensuring ownership is correctly recorded on the certificate of title, can save money, and family relationships, down the track. Court applications to force a sale or a buy-out can be time consuming and expensive. A structured dispute resolution process with a buy out provision in an agreement can save money and time, and at least will make expectations clear.
Need more information or help?
The team at Brookfields can provide practical advice and assistance tailored to your specific circumstances. Please let us know how we can help.
