Are you fed up with paying rent to a landlord, simply to put a roof over your head? You may want a change, as you have been living in a building that somebody else owns for some time now, mainly because you cannot afford to put down enough money for your own mortgage. As there is no sign of any promotion on the horizon, do you feel that you are stuck in this particular situation or do you have another alternative? You may know that the concept of "co-ownership" is on the rise, but is this something that you should realistically consider?
Tenancy in Common
As people become more connected than ever through various digital platforms, so opportunities arise that may never have existed before. One of these is co-ownership, where digital platforms try to connect two different individuals for the purpose of buying one property between them. These platforms provide information to detail the process and may also point them in the direction of a potential house, but there are many things to consider before entering into what may be termed a "tenancy in common" agreement.
This solution may well make a certain type of property affordable, as the costs associated with purchase, including legal fees, can be divided between two owners instead of one. This may be particularly attractive for those who are buying a second home, but it can also work if the two individuals intend to co-occupy the property.
Potential Pitfalls
Nevertheless, it's important to go into this sort of project with your eyes wide open. As you do so, you should ask yourself several important questions to determine whether it is a good idea or not.
Changing the Agreement
To begin with, what happens if one individual wants to move on and sell their share of the home? As this type of agreement is still in its infancy, it may be difficult to find somebody to take over that part of the contract in a timely manner. Furthermore, the owner who remains has little control over the new partner and this could lead to all manner of issues as time goes by.
What about Default?
Assuming that the pooled resources open up the opportunity, it may be necessary to take out a mortgage between the two individuals to make this work. However, further complications may arise. After all, when two people borrow then they are legally liable for each other's debts in relation to this contract and if one defaults, the other one is in big trouble.
Ask for Advice
This may still be a good solution for you, but you have to be very careful as you proceed. Make sure that you get good counsel from a property lawyer at all stages of the negotiation.
