Buying a large house between two couples to split

looking for planning

Is this possible? The house in question would be very easily subdivided between the original house and a later extension. Would a bank allow this for mortgage purposes?

SB_Part2

Do you mean a mortgage for 4 people?

looking for planning

Well either both couples getting (separate?) mortgages or one couple paying cash, but all 4 names on the deeds.

L1011

You would have severe difficulty organising this, can't see a bank being willing to do it at all. If either couple was even close to wanting to get an exemption from the Central Bank rules, forget it entirely - extremely hefty deposit and very very good loan to earnings ratios and there may be a sliver of a chance.

looking for planning

And would there be any legal issues with subdividing a house whether immediately or for the future?

quietsailor

It sounds messy OP just from what you wrote and in Ireland messy means expensive.

You will probably find it cheaper to buy two separate properties in the long run

One_Of_Shanks

I know this isn't quite what you asked but even if it is possible and the bank actually allow it, it sounds like a recipe for disaster. I'd strongly advise you not to do this.

looksee

As a complete non-expert it looks to me as though you would each be owning each other's house, so that if one couple needed to sell up you would be in a very complicated situation, I imagine the whole thing would have to be sold and any profit or debt divided - a scenario I cannot see a lender approving. Also if one couple spent money on, say, an extension, that value would not be on their part of the house, it would be on the entire building.

Again I have no idea, but could the four people form a development company then purchase individual units from that?

It all sounds a bit dodgy. If you can afford a large property and do all the development work to divide it between four of you, why not buy two smaller, ready to go, properties. If one couple is 'carrying' the other couple who could not get a mortgage on their own, then the proposition is even more dubious.

looking for planning

yeah I know it's messy.

I've no worries on the personal, making it work side of things. I'm from a country area where half the place lived on subdivided plots in each other's gardens so the living arrangements are not an issue.

In terms of why - neither of us could buy this particular house on our own - or any house in this exact area where we both want to live. We could both afford decent semi-d's not too far away, but nothing that would compare with this.

With the banks - we'd have a sizable deposit between both couples so nowhere near looking for exemptions.

What would the extra expenses be -
solicitors - if so is that for working out some kind of pre-nup (or whatever one would call this!) type agreement? or for making the subdivision legal?
Planning costs to subdivide?
Higher cost mortgage?

RobbieTheRobber

looking for planning wrote: »

And would there be any legal issues with subdividing a house whether immediately or for the future?

Yes there would be legal issues.

The house would be considered a single dwelling and would be sold as such. If you did manage to purchase it between four people you would have four people who were part owners of a single dwelling.

Whether you could then sub divide the property into two dwellings would be a matter for the relevant planning authorities and I don't think anyone here could give you a guess at how likely that would be, without much more information. Even then it would be worth as much as free information on the internet is worth.

As others have said this whole things seems full of complications and the potential for much greater complication into the future.

endacl

If this made any sense at all, OP, you'd have heard of somebody else who did it.

harr

I think the only way of doing this would be to get planing to split the property into two separate houses...maybe talk to a contractor to see if possible and then you buy the two units back off the builder... You won't get a mortgage the way you are hoping as you will need two separate deeds
Not even sure if the way I suggested is possible sounds messy...

mickdw

RobbieTheRobber wrote: »

Yes there would be legal issues.

The house would be considered a single dwelling and would be sold as such. If you did manage to purchase it between four people you would have four people who were part owners of a single dwelling.

Whether you could then sub divide the property into two dwellings would be a matter for the relevant planning authorities and I don't think anyone here could give you a guess at how likely that would be, without much more information. Even then it would be worth as much as free information on the internet is worth.

As others have said this whole things seems full of complications and the potential for much greater complication into the future.

This pretty much sums it up.
You would have to buy as a single unit among 4.
Once owned, apply for planning for dividing into 2 and go from there.
If no banks involved, it's very doable but with mortgages, not worth the headaches.

cruizer101

Realistically you will have to talk to bank, people can advise on here but it is that unique a case no-one can really give you proper answer except the bank, maybe try a financial advisor / mortgage broker

seamus

endacl wrote: »

If this made any sense at all, OP, you'd have heard of somebody else who did it.

Oh it happens.

But people are usually silly about it and try do it in the way that's least complicated up front, in exchange for long-term uncertainty.

I know of an older couple who go involved in this kind of messing;

House in a town that had been left to two sisters who didn't really get along, so they informally divided the house between themselves; one sister had no bathrooms, the other no kitchen, one sister "owned" the front door, the other owned the rear garden, all that kind of craziness.

An older couple moved back to the area and wanted to buy the whole house. Sister 1 more than happy to sell, sister 2 no interest whatsoever. They were insistent on moving back, so they bought sister 1's share.

They are now renovating their "half" of the house with agreement from sister 2, with concessions to her where she gets a load of the facilities she's been stubbornly missing for years and in exchange they get the right to go in and out the front door. To properly divide the property into two distinct homes but without dividing the title. And all without any real legal footing of course.

When it comes to property, people will do some really, really odd stuff. FWIW their long-term plan is to wait until this woman dies and buy her half of the house from her estate, but there's every chance she could leave it to someone just as stubborn as her. Or they could die first.

alwald

Your idea is great, especially now that prices are high, it is innovative and unusual hence why most people will advise you against it.

Large properties can easily be divided into 2 separate properties, you might build it in a way that it will look like 1 large property from the outside but from the inside it will be 2 separate properties.

Honestly nobody can tell you whether it will work or not, you will need to contact an architect and spend money to see what kind of design is possible, then you will need to know if a planning permission is possible and lastly contact the bank with your design so that it will make perfect sense to them.

Good luck!!

CIARAN_BOYLE

The big problem is that you would have to spend a few grand in order to know if it would work or not or whether you would get mortgage approval or even whether you would get to buy the house or be outbid.

Ri_Nollaig

alwald wrote: »

Your idea is great, especially now that prices are high, it is innovative and unusual hence why most people will advise you against it.
...

Its unusual for a reason.
People are advising against it because its a very obvious recipe for disaster!

Who knows what could happen in a year or ten years time?
Will they have separate meters and other utilities etc? What happens if a disagreement erupts and the couples are not on talking terms anymore.
What happens if one couple breaks up or dies? One couple wants to sell while the other doesn't, etc.
There is near countless scenarios that could happen that would leave this place in a massive legal limbo.

Perhaps if this was done by two cash buyers who can basically do whatever they want.
Sure, they can take the risk and walk away if it goes sour but any Bank is not going to want to get stuck in this potential mess any time soon.

alwald

Ri_Nollaig wrote:

Who knows what could happen in a year or ten years time? Will they have separate meters and other utilities etc? What happens if a disagreement erupts and the couples are not on talking terms anymore. What happens if one couple breaks up or dies? One couple wants to sell while the other doesn't, etc. There is near countless scenarios that could happen that would leave this place in a massive legal limbo.

OP said that he's confident regarding the personal terms and about the agreement between both couples, he's in a better position than us as we have very little information about this agreement and as such my answer is about the other matters and questions.

You mentioned different scenarios where things can go wrong, they are all valid and possible, however OP said that splitting large houses in the area where he wants to buy is not that unusual so he can learn from others.

Marcusm

The bank will want to see good marketable title and habitable properties from the outset to make it work. Buying part of a folio is not a problem. The problem I suspect is that you will not, at the outset, have two habitable properties. The question is whether you will have the funds to split both properties, in accordance with building regs. If you do, you'll be about 20% there as the lender (and it would most likely have to be a single lender) would still likely deny based on the absence of planning consent. If you could get the vendor to obtain planning consent, you might have a possibility.

Spanish Eyes

I would NEVER share my house with another couple. Just me maybe. Although I know the plan would be to subdivide the house eventually.

I absolutely cannot see any advantage here. What is it? A big fancy house divided into two separate places? Why. You would only end up with the equivalent of a semi d anyway, and all the hassle involved. Fek that.

How do you decide who gets what part of the house, will it be divided exactly on sq m. Who gets the front door, who gets.... ah here, you can see where I'm coming from. And Planning will be required to change a single dwelling into two. Anyway I'm sure you have figured all that out.

You only have to look at some of the houseshare threads here when a partner is moved in to see the angst it causes.

But if you do get around to it, and it works out legally and mortgage wise I'd really love to know how it is working out.

Ush1

I find it hard enough sharing a house with my wife!

looking for planning

Spanish Eyes wrote: »

I would NEVER share my house with another couple. Just me maybe. Although I know the plan would be to subdivide the house eventually.

I absolutely cannot see any advantage here. What is it? A big fancy house divided into two separate places? Why. You would only end up with the equivalent of a semi d anyway, and all the hassle involved. Fek that.

Plan for living arrangements would be to subdivide immediately - as I said the house lends itself well to this. Original house one side - Extension built on as a separate wing to the other side.

Advantage - Yes we'd end up with the equivalent of a semi d, but it would be one I love with a huge garden in the exact place I want to live...

looksee

Half a huge garden...

However it looks as though you are determined to give it a go OP, good luck to you, I hope it works out. Be interested to hear how it goes.

Ri_Nollaig

alwald wrote: »

OP said that he's confident regarding the personal terms and about the agreement between both couples, he's in a better position than us as we have very little information about this agreement and as such my answer is about the other matters and questions.

You mentioned different scenarios where things can go wrong, they are all valid and possible, however OP said that splitting large houses in the area where he wants to buy is not that unusual so he can learn from others.

...yeah famous last words
Ofcourse I don't know what their personal situation is or isn't.
But what I do know is relationships and friendships can break down and the likelihood of that happening here is much higher than normal! And thats ignoring other possible issues like one of the four losing their job.

A bigger house/garden is not worth that possibility.

Bandana boy

I like it OP , its thinking outside the box
There are some obvious pitfalls , but make sure you have a solid "prenup" with agreed buy out clauses and go for it.

alwald

Ri_Nollaig wrote:

...yeah famous last words Ofcourse I don't know what their personal situation is or isn't. But what I do know is relationships and friendships can break down and the likelihood of that happening here is much higher than normal! And thats ignoring other possible issues like one of the four losing their job.

Ri_Nollaig wrote:

A bigger house/garden is not worth that possibility.

How do you know that?? Going by your logic I can say that I simply know that a relationship breakdown won't happen and no issues will arise.
The fact is that the OP is sure and confident about the personal terms.

One of the four loosing their job is a possibility, it can happen to a couple as well. At least they are 4, if one loose the job then there are 3 salaries left to pay the mortgage, for a couple there is only 1 salary so it's much more difficult.

harr

alwald wrote: »

How do you know that?? Going by your logic I can say that I simply know that a relationship breakdown won't happen and no issues will arise.
The fact is that the OP is sure and confident about the personal terms.

One of the four loosing their job is a possibility, it can happen to a couple as well. At least they are 4, if one loose the job then there are 3 salaries left to pay the mortgage, for a couple there is only 1 salary so it's much more difficult.

And are the other couple going to be happy paying more or double if the other couple lose their job or jobs...it's a disaster waiting to happen...
If at all possible two totally separate mortgages, split house in two then go to bank..

One_Of_Shanks

alwald wrote: »

OP said that he's confident regarding the personal terms and about the agreement between both couples, he's in a better position than us .

That's all true and fine. But when a couple buys a home together there is a risk that they won't stay together and usually if they break up it gets messy and you then have the unenviable process of selling the house or paying off the other person etc...
It's a risk most of us take because it's done as a couple. You're in love etc and you're on the same page and providing it stays that way everything is rosy.
Still for even the most romantic of us it's in the back of your mind that it's a big step and there's a wee bit of risk involved, is that fair enough?

Now... With two couples buying the same house you are multiplying that risk of something going wrong.
Not just doubling it, you're pretty much quadrupling it.

Couple-A break up, couple-B break up, or person A,B,C,D fall out with person A,B,C,D.
Or either couple one day decide they are sick of it raining all the time and fancy a move abroad, or one couple hit financial hardship etc, etc...

I know the OP says the 4 of them are all getting along great now and of course they are or they wouldn't be considering this.
And maybe it will all work out if they go ahead. Lets hope so.

But the reason why most people are saying it's a bad idea is because the odds are stacked against it on practical grounds.

And as well as everything else they'd be effectively gambling the friendship between the two couples on this working out.

L1011

alwald wrote: »

it is innovative and unusual hence why most people will advise you against it.

No, its complicated, risk fraught and implausible which is why most people are advising against it.

4ensic15

The minimum the banks will want is
a) Planning permission
b) A plan costed by a quantity surveyor and supervised by an architect or engineer for the conversion
c) proof of funds to carry out the plan
d)post conversion valuations for each portion
e) an undertaking from a solicitor that there will be a new folio opened with the bank charge secured on it
f) separate solicitors for each couple
g) Counsel's opinion on the family Home Act implications of the transaction.

After that a bank just might give a mortgage.