Buying a property with another person is in many respects like investing in a business and it is important for all the parties to know the terms and conditions of your relationship as property owners.
Anyone who is buying a property with another person, whether they are a family member or a friend, should have a Co-ownership Agreement with your co-purchaser and the value of your investment together.? Not sure what this means here
What is a Co-ownership Agreement?
A Co-ownership Agreement is a legal agreement between two or more people who have bought or who are in the process of buying a house together. The Co-ownership Agreement will be tailored to suit the needs of the people who are buying the property
When should I discuss the Co-ownership agreement with my Solicitor?
The Co-ownership Agreement should be discussed with your Solicitor in the early stages of the buying process. The Co-ownership Agreement should be signed at the same time that you are signing the Contract to purchase the house.
If I buy a house with someone else do we automatically own the house on a 50:50 basis?
No, that is not necessarily the case. In most cases the shares which people own in a house will reflect the amount of money –each person has contributed to the purchase price.
One of the main advantages of the Co-ownership Agreement is that it records exactly the contributions that have been made by each of the purchasers, not only to the purchase price but also to legal fees and any other expenses e.g. Engineer. This information can then be used to ensure that each person becomes registered as owner of a share in the property that reflects the contribution that they have made.
Can you specify in the agreement how future expenses in relation to the property will be shared?
Yes, the Co-ownership Agreements will set out the share of ongoing expenses that each of the owners will be liable for. Those expenses can cover maintenance and repairs, insurance, utility bills and so on. In the majority of cases the expenses will be borne by the owners on the same basis as their ownership e.g. if two people own a property on a 50:50 basis, ongoing expenses will be shared in the same way. There are some instances however where this may not hold e.g. if one of the co-owners lives in the house and the other does not, the resident co-owner may take on responsibility for 100% of the ongoing expenses. The Co-ownership Agreement will have a mechanism for dealing with a person who- fails to contribute his/her share of the expenses.
If I want to sell my share in the house what can I do?
The agreement will stipulate that your share must first be offered for sale to your co-owner. If your co-owner wishes to acquire your share in the property, a price will have to be agreed and the mechanism for that will be set out in the Agreement.
If your co-owner does not want to acquire your share in the property or cannot raise the finance to purchase the share then the Agreement, more often than not, will contain a clause stating that the entire property will be put on the open market for sale.
What happens if one of the owners dies?
The Agreement will allow for the surviving owner to acquire the share of the deceased owner.It will stipulate that the person acquiring the share can agree a fair (usually market) price for the share that they are acquiring. If the owner and the Executor of the deceased owner cannot agree upon a price, the Agreement sets out a mechanism for an independent valuation which will be binding on both sides.
If I have a disagreement with my co-owner how does the Agreement help?
Any dispute between the owners, that they fail to resolve themselves, can be referred to an independent Arbitrator. The decision of the Arbitrator is final and binding on all parties.
I bought a house with a friend two years ago and we don’t have a Co-ownership Agreement. Is it too late to do one now?
As the saying goes “better late than never”. Anyone who has made an investment with another person or perhaps a group of people should have a Co-ownership Agreement, even if it is put in place after the event.
Your Solicitor will need you to provide as much information as possible in relation to the contributions made to the purchase price and expenses. Your Solicitor will advise you on the terms and conditions of the agreement that are appropriate for your particular circumstances.
Pre-nuptial agreements have been labelled as “an insurance policy against falling out of love”.
A Pre-nuptial Agreement can be entered into by a couple who are intending to marry.
It usually sets out their rights on any property, debts, income and other assets purchased together or that they have brought into a relationship.
The Agreement will set out how the parties will divide their assets and deal with their finances upon Divorce or Judicial Separation.
In addition to property and assets, an Agreement can deal with issues such as succession rights, children, custody, access, maintenance, and pension.
Why do a Pre-nuptial Agreement?
Many parties do a Pre-nuptial Agreement to try to avoid disputes if they separate.
Irish legislation allows the Family Law Courts to regard all assets of a married couple as being matrimonial assets.
A Pre-nuptial Agreement is a way of pre-empting a forced division of assets on breakup.
A Pre-nuptial Agreement is made with the intention of contracting out of a Court driven settlement. Not sure what this means
Who enters into Pre-nuptial Agreements?
Pre-nuptial Agreements are not only entered into by the rich and famous.
We regularly draft agreements for people from a variety of financial backgrounds.
Couples of modest means are increasingly turning to Pre-nuptial Agreements in order to protect their assets.
It is often the case that business or farming enterprises look to protect family assets on the marriage of a family member.
Are Pre-nuptial Agreements enforceable?
The best answer under the current legal regime is that Pre-nuptial Agreements are not illegal or unenforceable in Ireland.
An Irish couple is not prevented from signing a Pre-nuptial Agreement in Ireland.
However, the Irish courts are not obliged to enforce such Agreements if the couple’s relationship later breaks down.
The primary duty of the Irish Courts under our Constitution is to ensure that proper provision is made for all family members on a breakup.
If a Pre-nuptial Agreement is considered by a Court to make proper provision it is less likely that the Court will set it aside.
Will Pre-nuptial Agreements be recognised in the future?
Public opinion is moving towards the acceptance that such agreements provide peace of mind and are of benefit to the parties when getting married.
It is anticipated that the Courts will take Pre-nuptial Agreements into account as one of the factors to be considered when determining financial relief on Separation or Divorce.
This will put these Agreement on the same footing as Separation Agreement that couples enter into when separating.
A Co-habitation Agreement is an agreement, between people who are not married but living together, to provide for financial and other matters during their relationship or at the end of the relationship (whether on death or otherwise).
What is the main difference between a Pre-nuptial Agreement and a Co-habitation Agreement?
A Pre-nuptial Agreement is entered into pre-marriage and a Co-habitation Agreement is entered into by parties who are not married, don’t intend to marry, but are living together.
It is now critical for co-habiting couples to give consideration to a Cohabitation Agreement and to the effects of the Civil Partnership Act 2010.
Can all co-cohabiting couples draw up a Co-habitation Agreement or are there conditions?
Anyone can enter into a Co-habitation Agreement.
Independent legal advice should be sought to ensure one party is not acting under duress.
It is important to give full consideration to the terms of these Agreements.
The material in this Blog is provided for general information purposes only and does not amount to legal or other professional advice. While every care has been taken in the preparation of the information, we advise you to seek specific advice on any legal decision or course of action.