Before you buy, you’ll need to decide if you will be Joint Tenants or Tenants in Common. If you buy as Joint Tenants it means that if one of you should die, the other would automatically inherit their half of the property, even if their will made different instructions. However, if you buy as Tenants in Common, you’ll each own a separate share of the property which you can leave to whoever you want to in your will. In our experience, friends tend to buy as Tenants in Common and married couples or people in long term relationships tend to follow the Joint Tenants route. Your solicitor will be able to advise you on your situation.
Buying and living with a friend
Top legal and life advice from QualitySolicitors
The Legal side
Ask your solicitor to draw up a Declaration of Trust to confirm the shares of the property you both own. This should also outline what will happen if one of you decides to sell – usually allowing the other owner the option of buying them out within a reasonable amount of time. To give everyone a bit of reassurance from the start, you can also choose to include a clause which states that neither of you will sell for at least two years.
Separate legal advice means both your best interests are looked after. Remember, you might be good friends now, but this could change in the future, so get sound legal advice to protect you for all future scenarios. This is particularly important if one of you has contributed a higher amount to the deposit. We can help you draft documents to cover everything from who pays for any property repairs to whether you can have friends around.
What will happen if one of you becomes redundant or too ill to work? You will both be liable for the mortgage repayments, so if one of you can’t pay, your lender could insist that 100% of the mortgage is paid by the other person. You might want to consider taking out insurance to protect yourselves. Similarly, think about what would happen if you fell into negative equity, your mortgage company could pursue both of you for the full amount.
The Life side
It’s easy to think that because you’re friends you don’t need legal documents drawing up rules for how you’re going to live together. However, the reality is that friendships and circumstances do change. Buying a property is a huge financial commitment for both of you and its far better to be protected. So, don’t be shy about insisting on this.
Possibly the biggest challenge when buying with friends is what happens if one of you gets a new partner. Can they stay over all the time? Can they move in? If so, do they contribute to the mortgage and bills? Discuss this upfront with your friend to make sure you’re both clear about how you would manage this together.
One of the most exciting things about buying your first home is furnishing it. When you’re buying with friends, you might want to consider paying for furniture separately rather than as a couple. If you share the cost for everything, when you decide to move on you’ll have a complex situation where you’ll need to agree the value of each item, who gets to keep it and what contribution they’ll need to pay to the other.
Even if you’re close friends, it’s important to still have your own space and privacy. It sounds simple, but don’t help yourself to their food or toiletries, always knock before going in their room or ask before inviting other people around to the property.
This can be one of the most important things to making this arrangement work for you. Make sure you address any issues or concerns as they happen, rather than letting them brew for too long. Perhaps consider arranging a regular time to sit down and have an informal chat about the house, what projects need doing, what bills are due and an opportunity to discuss any problems.
If you are moving house and need a reliable, approachable and experienced conveyancing solicitor, or simply want to chat about your conveyancing needs, call us on 0808 274 7557 or find your local QualitySolicitors branch here.