When you own property with friends or family you need to consider a Property Sharing Agreement…

Cheryl and her friend Jane bought an apartment together when they were in their early 20’s and single.  At the time their lawyer told them they should consider a document called a Property Sharing Agreement, recording arrangements relating to the property.  They didn’t do it as they couldn’t foresee any issues.

Cheryl ended up moving overseas and left Jane to carry out all maintenance on the property.  Eventually Jane’s partner moved in to the apartment and didn’t pay any rent, which frustrated Cheryl.  Cheryl and Jane’s friendship fell apart, and they were left fighting over whether the property should be sold or not.

Had they signed a Property Sharing Agreement when they bought the property things would have been much clearer, as it would generally set out (among other things) what happens if one party wants to sell their share, what happens in the event of a dispute, and how maintenance and capital improvement costs are shared.

If you already own, or are considering buying, a property with a friend or family member, you should talk to your lawyer about a Property Sharing Agreement. It’s an important modest investment that may well turn out to be very important to you.