Joan and May (mother and daughter) decided to buy a property together to live in.

The lawyer who acted on their purchase recommended that they sign a property sharing agreement to record arrangements in relation to the property, but they were both in a rush to get their own place to live in and decided to agree arrangements later once everything had settled.

They told their lawyer that for now the property would only be in Joan’s name as she had better credit history for a loan.

Later May got married and had two children, who also lived at the property with her and Joan.

Some years later Joan unfortunately suffered from dementia and May passed away in an accident.

Joan’s son and May’s widower started to argue about what should happen with the property as Joan needed it sold to pay for her ongoing care in a rest home, and Joan’s widower needed a place to live with the children.  

Neither Joan’s son Matt or May’s widower could find any documents setting out any arrangement between Joan and May.  They had to go to Court to try to determine what should happen with the property, and whether May’s estate owned any share of the property.

Parents and children are now buying together and living together more often for various reasons.

This can work well for people, and you may get along very well with the family members you have purchased with, but things can get very messy when one family member enters into a relationship, or when there are other children of the parent who are not part of the arrangement.

If it is not clearly set out who owns what share of the property, by having the title show who owns what share of the property, and a property sharing agreement setting out the details if the title is not the full answer as in Joan and May’s case, and also how shares are sold, who is responsible for outgoings etc, then there can be disputes later with:

  1. A partner of one of the owners on a separation or death of the owner about what share their ex-partner or deceased partner owned.
  2. A child who is not an owner disputing what share was owned by the parent on the parent’s death.
  3. Between the parents and children who own together when they are looking to end the property sharing arrangement, because they all want to sell, or one party wants to sell because they want to move elsewhere (for work or because they have a growing family etc) or because of a relationship breakdown between them.

To try to avoid (or more easily resolve) disputes later between yourselves, or one of you and the other person’s estate, or with future partners of any owner of the property, we recommend that when you buy with family (or friends) you enter into a property sharing agreement (also called a co-ownership agreement), and own the property as tenants in common together (all owners on the title with shares recorded next to their names).

The property sharing agreement can set out:

  • Who owns what share of the property, and how the shares can be changed if one party makes a lump sum payment on the mortgage, or if one owner pays for all of some maintenance or a renovation, or if one wants to purchase a further share from the other.
  • Who is responsible for what share of the loan repayments and outgoings;
  • How outgoings are to be split and if there are different ratios when only some parties are living at the property.
  • If repairs are needed there should be a process for cost sharing, getting quotes etc.
  • A process for a situation where one party wants to sell, including how the price will be determined, timeframes for one owner buying the other out, and the process if the whole property needs to be sold on the open market?

If you are in a romantic relationship

Parties in a romantic relationship can jointly own a share together.

If instead parties in a romantic relationship have separate tenant in common shares, or only one of them is a tenant in common owner (or the sole owner on the title for the whole property), a property sharing agreement will not be a binding agreement between the parties who are in a romantic relationship together. 

Instead such couples should enter into what is called a Contracting Out Agreement to have a binding agreement about the division of their property between each other.

A property sharing agreement will still be binding as to what is owned in total by the parties in a romantic relationship with other owners who are not in a romantic relationship with them.

Buying with others is a good option, but you need to make sure you get robust legal advice to protect everybody as far as possible from the consequences, including cost, of any changes occurring down the track.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.


Andie Donnelly

Property Lawyer