What you should know before buying a property with a friend

With fewer couples getting married nowadays and they prefer the co-ownership instead buying a property single. Most of the friends opting to share because they can't afford anything on their own, the trend of co-owning property is on the rise.

Co-ownership is a fantastic way to get on the property ladder, but it requires careful consideration when drafting a contract between the owners to ensure that there are no misunderstandings or miscommunications about how the property will be handled if they split up or decide to sell.

Once a property has been located, the purchasers should determine what proportion each owner will own before signing an offer to purchase; if this is not specified in an agreement between the co-owners, it is presumed that they possess equal interests in the property. To guarantee that the agreement is kept, the shareholding in the property can also be registered in the title documents at the Deeds Office.

When buying a property with another person, there are a number of factors to consider, and the following should be mentioned in the co-ownership agreement:

• Who will live on the premises? Is it going to be a single or a group of people?
• Who will apply for financing, pay in cash, or put down a deposit, and in what percentage if the deposit is to be shared?
• What percentage of the cost of maintenance or repairs will each owner bear? Unless otherwise stated, donations are considered to be proportional to the percentage of the property held.
• How will the profits (or losses) be distributed if the property or a portion of the property is sold?
• Will the other owner(s) impose any restrictions on the selling of a part of the property?
• Is it possible that a co-owner may utilize this property as security for a new loan or take advantage of an access bond?
• What happens if one of the co-owners passes away or is unable to contribute to future payments?
• What happens if the co-owners decide to split up, and is there a way to settle a disagreement if they do so on bad terms?

Co-ownership is a great option to own a property that you might not be able to afford on your own. It is critical to carefully select your co-owners and to establish an agreement with them from the start about percentages of bond repayments, rates, operating expenditures, and behavior standards for all parties involved.

It's also a best to discuss each co-future owner's plans for his or her share before buying a property, in case they don't plan to retain it for the same period of time as the others. Property acquisition and disposal are costly, therefore investments should be considered long-term, with a minimum ten-year horizon.