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Purchase with friend

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    #32
    LawBoy2018
    Registered Users Posts: 1,162 ✭✭✭LawBoy2018


    MissShihTzu wrote: »
    No. Absolutely not. It will be a recipe for disaster. No matter how well you get on...

    Do you have any horror stories? Personally, I have never heard of two friends buying a house together.


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    #33
    MissShihTzu
    Registered Users Posts: 1,080 ✭✭✭MissShihTzu


    LawBoy2018 wrote: »
    Do you have any horror stories? Personally, I have never heard of two friends buying a house together.


    Yes, but it's one from London where I am from and dates back to the 80's. The principle was the same. It didn't end well. I also have personal experience but that was buying with a boyfriend.


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    #34
    LawBoy2018
    Registered Users Posts: 1,162 ✭✭✭LawBoy2018


    MissShihTzu wrote: »
    Yes, but it's one from London where I am from and dates back to the 80's. The principle was the same. It didn't end well. I also have personal experience but that was buying with a boyfriend.

    How did it end up? Were you joint tenants, or tenants in common?


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    #35
    MissShihTzu
    Registered Users Posts: 1,080 ✭✭✭MissShihTzu


    LawBoy2018 wrote: »
    Do you have any horror stories? Personally, I have never heard of two friends buying a house together.

    I would suggest reading the below...
    godtabh wrote: »
    Look at the horror stories here from celctic tiger era situations similar to yours. I wont do it.

    A search of the thread will turn up similar stories, I am sure...


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    #36
    Padre_Pio
    Registered Users Posts: 5,161 ✭✭✭Padre_Pio


    LawBoy2018 wrote: »
    What do you mean by 'hold over'? Isn't that what contracts are for? But I take your point.

    Yes, I agree. That would definitely need to be discussed straight away. Would banks even consider it though? Especially in light of the current circumstances.

    I would be more interested in buying a property as an investment, rather than one to live in tbh. Would it be best to set up an Ltd company? That way we could claim back any capital allowances available from renovations against rental income, if we were to rent it out. We could also claim back mortgage interest, management fees, etc. We wouldn't necessarily need to set up a company to do that, but it might be less risky.

    Maybe, the point is that couples who buy usually share all their problems, including financial.

    But friends or family don't.

    Ok, so say this is an investment, you're going to rent it.
    Say your business partner needs money for some reason and needs to cash out of this investment? What if you don't want to sell? What if you can't buy him out?

    What if one of you decides to relocate to another part of the country? The one living closest is left dealing with all the hassle of managing tenants.
    What if you want to spend x thousand sprucing the place up and he's content being a slum lord?

    Obviously many people have very amicable partnerships with friends, but don't go into this thinking things are rosy. You could be partners in this investment for decades.
    It's these sort of things where one person needs to have the overriding say in the matter. A 50/50 split means you need to agree on everything.


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    #37
    LawBoy2018
    Registered Users Posts: 1,162 ✭✭✭LawBoy2018


    Padre_Pio wrote: »
    Maybe, the point is that couples who buy usually share all their problems, including financial.

    But friends or family don't.

    Ok, so say this is an investment, you're going to rent it.
    Say your business partner needs money for some reason and needs to cash out of this investment? What if you don't want to sell? What if you can't buy him out?

    What if one of you decides to relocate to another part of the country? The one living closest is left dealing with all the hassle of managing tenants.
    What if you want to spend x thousand sprucing the place up and he's content being a slum lord?

    Obviously many people have very amicable partnerships with friends, but don't go into this thinking things are rosy. You could be partners in this investment for decades.
    It's these sort of things where one person needs to have the overriding say in the matter. A 50/50 split means you need to agree on everything.

    Great input, thanks for that!


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    #38
    Padre_Pio
    Registered Users Posts: 5,161 ✭✭✭Padre_Pio


    LawBoy2018 wrote: »
    Great input, thanks for that!

    I'll admit that I'm not in this situation, I know of a few people who are, and it's working out for them, but it comes down to the fact that people change over time.
    Their needs, outlook, priorities etc change, and unless you're in sync, there's a chance for disagreements and disagreements over money are never good.


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    #39
    3DataModem
    Registered Users Posts: 3,997 ✭✭✭3DataModem


    Markcheese wrote: »
    J
    I mean if you buy a house with a romantic partner ,you can't really bring up "what if we split " and if married well what ever was agreed pre purchase is null if there is a split ...

    There's a whole bunch of law, legal precedent, and stuff specifically for the romantic partner scenario. For others, there is not.

    This is one of the reasons why the 34th amendment was so important to some people.


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    #40
    jetfiremuck
    Registered Users Posts: 3,467 ✭✭✭jetfiremuck


    The purchase can be done provided a robust legal framework is attatched. Items like min length of ownership before a sale or get out can be triggered. The splitting of utilities relating to the properrty as in LPT, and other legal requirements (that could affect the property legally). Should life insurance policies be considered etc.
    If there is a good working relationship and professional relationship established between you then Id see no issue. People moving in as in tenants etc is another kettle of fish.

    Partnerships are part of business and all aspects of life today.


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    #41
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    [QUOTE=Padre_Pio;114897278Their needs, outlook, priorities etc change, and unless you're in sync, there's a chance for disagreements and disagreements over money are never good.[/QUOTE]

    One of the biggest problems is it's not just the co-owners that need to be in synch. The future partners, and the markets also have to co-operate.

    Imagine the scenario:

    you and a mate/sibling bought a house together 8 years ago. You moved out 2 years ago to shack up with long-term partner in a rental. Your mate still lives in the house. You and new partner want to buy a house together but you can't get a mortgage as you already have one. Market has burped so house is worth less than the outstanding mortgage, should recover its value in the next 5 or 6 years.

    It's not far fetched. I'm sure we've more than a few threads along those lines knocking around here somewhere.


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    #42
    LawBoy2018
    Registered Users Posts: 1,162 ✭✭✭LawBoy2018


    Graham wrote: »
    One of the biggest problems is it's not just the co-owners that need to be in synch. The future partners, and the markets also have to co-operate.

    Imagine the scenario:

    you and a mate/sibling bought a house together 8 years ago. You moved out 2 years ago to shack up with long-term partner in a rental. Your mate still lives in the house. You and new partner want to buy a house together but you can't get a mortgage as you already have one. Market has burped so house is worth less than the outstanding mortgage, should recover its value in the next 5 or 6 years.

    It's not far fetched. I'm sure we've more than a few threads along those lines knocking around here somewhere.

    But a tenant in common can sell his/her share if they so wish. If the housemate didn't want to sell, he would have the option of buying me out. If he was being awkward + refused to cooperate, I could just make an application to the courts to force a sale.


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    #43
    Padre_Pio
    Registered Users Posts: 5,161 ✭✭✭Padre_Pio


    LawBoy2018 wrote: »
    But a tenant in common can sell his/her share if they so wish. If the housemate didn't want to sell, he would have the option of buying me out. If he was being awkward + refused to cooperate, I could just make an application to the courts to force a sale.

    Friendships and solicitors letters don't mix


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    #44
    LawBoy2018
    Registered Users Posts: 1,162 ✭✭✭LawBoy2018


    Padre_Pio wrote: »
    Friendships and solicitors letters don't mix

    I'm just looking at this from an objective perspective. My point is that if things were to go sour, there are avenues available. I think we're all in agreement with the prospect that if two people were to enter such an arrangement, their friendship would need to be parked at the door + all contracts/paperwork would need to be bulletproof and cover every possible scenario.

    Now, on to the next part!

    I worked with the legal team in BOI for a while and I never came across any mortgage applications between two friends. How would banks perceive such arrangements? How would they factor in the added risk (if any)?

    The nub of all of this would be whether the applicants actually planned on living in the property, imo. (this wouldn't be the case for me, but I would still love to hear people's thoughts)


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    #45
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    LawBoy2018 wrote: »
    I think we're all in agreement with the prospect that if two people were to enter such an arrangement, their friendship would need to be parked at the door
    )

    This is the reason it would never work...friendships cannot be just parked at the door.....
    there are avenues to go through if it goes tits up alright but have a look through boards and all the threads from people who have tenants who refuse to move...they have legal avenues available as well but it’s costly and immensely stressful...not worth it at all imo


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    #46
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    LawBoy2018 wrote: »
    But a tenant in common can sell his/her share if they so wish. If the housemate didn't want to sell, he would have the option of buying me out. If he was being awkward + refused to cooperate, I could just make an application to the courts to force a sale.

    What if the friend couldn't sell because they couldn't meet their share of the shortfall in the mortgage.

    Joint & several. Are you going to meet the shortfall?

    Will the bank agree to the sale if neither of you agree to meet the shortfall?

    What if the friend decides to be 'off-putting' to any potential purchasers? More Court costs? Who pays those?

    I'm deliberately playing devils advocate here because (my admittedly vague recollection of clearly anecdotal evidence) tells me we've had posts along these lines before.

    How many of these scenarios/eventualities can you reasonable protect yourself against with a contract?


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    #47
    Interested Observer
    Registered Users Posts: 13,105 ✭✭✭✭Interested Observer


    LawBoy2018 wrote: »
    But a tenant in common can sell his/her share if they so wish. If the housemate didn't want to sell, he would have the option of buying me out. If he was being awkward + refused to cooperate, I could just make an application to the courts to force a sale.

    You read some mad stuff on this forum.


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    #48
    LawBoy2018
    Registered Users Posts: 1,162 ✭✭✭LawBoy2018


    Interested Observer wrote: »
    You read some mad stuff on this forum.

    Why contribute if you have nothing to add to the conversation?


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    #49
    LawBoy2018
    Registered Users Posts: 1,162 ✭✭✭LawBoy2018


    Graham wrote: »
    What if the friend couldn't sell because they couldn't meet their share of the shortfall in the mortgage.

    Joint & several. Are you going to meet the shortfall?

    Will the bank agree to the sale if neither of you agree to meet the shortfall?

    What if the friend decides to be 'off-putting' to any potential purchasers? More Court costs? Who pays those?

    I'm deliberately playing devils advocate here because (my admittedly vague recollection of clearly anecdotal evidence) tells me we've had posts along these lines before.

    How many of these scenarios/eventualities can you reasonable protect yourself against with a contract?

    I'll do some research and get back to you on this later! Thanks for the great input.


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    #50
    martinstacks
    Registered Users Posts: 8 ✭martinstacks


    @LawBoy2018 any luck with this idea?

    A few of us are looking in to this. There are many people or friends who have saved up some money during the pandemic and consider this a viable opportunity. By involving a number of people you share the risk and also add in extra skills and expertise...

    Of course there will be legal agreements outlining the arrangement.

    The Company option seems the most viable.



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    #51
    James 007
    Registered Users Posts: 962 ✭✭✭James 007


    Would a bank give each of you a loan to buy a house together. If you dont need a bank what would be a likely arrangement for selling up later or buying each other out etc.



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    #52
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    https://www.boards.ie/discussion/comment/117740647#Comment_117740647

    Talk to an accountant. My non expert advice is that sounds like a route to CGT for the company on top of whatever liabilities the co-owners might have.



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    #53
    LawBoy2018
    Registered Users Posts: 1,162 ✭✭✭LawBoy2018


    https://www.boards.ie/discussion/comment/117740884#Comment_117740884

    Agreed - It would definitely need further review by an accountant/tax advisor. You would probably be hit by CGT twice if ever you wanted to sell the property unless you could avail of retirement relief. A buy to let mortgage may be more beneficial? Unless you plan on living in the property



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    #54
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    One of you are going to meet someone and get married, as soon as the child comes your going to try and figure out how to get the other person out of the house, whether thats yourself OP or the friend.

    Its going to be very unlikely one of you will be able to get a 2nd mortgage while paying for the current house.

    The resentment will start and one of you are going to look like a dick head trying to stay in a house with a wife and kids of the other person.

    A war will start then and each one will want the other out of the house going down a legal route etc.



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    #55
    LawBoy2018
    Registered Users Posts: 1,162 ✭✭✭LawBoy2018


    https://www.boards.ie/discussion/comment/117745303#Comment_117745303

    The obvious solution would be to sell the house. At least that way they could build equity until they ultimately move on with their lives instead of paying an obscene amount of rent every month.



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    #56
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    https://www.boards.ie/discussion/comment/117745397#Comment_117745397

    Easier said than done when money is involved and a missus



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    #57
    LawBoy2018
    Registered Users Posts: 1,162 ✭✭✭LawBoy2018


    https://www.boards.ie/discussion/comment/117745414#Comment_117745414

    It is what it is. Seems fairly straightforward imo.



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    #58
    SupaCat95
    Registered Users Posts: 714 ✭✭✭SupaCat95


    https://www.boards.ie/discussion/comment/117745429#Comment_117745429

    You have completely left out the human aspect to it.



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    #59
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    https://www.boards.ie/discussion/comment/117745429#Comment_117745429

    Try it so and see what happens. No one with a house at the end of it. You need a 20% deposit for your next purchase.

    The single person probably won't be able to afford a house on their own.

    What happens if the house goes into negative equity.

    What happens if there 10 years into a 30 year mortgage.

    Multiple factors here.



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    #60
    LawBoy2018
    Registered Users Posts: 1,162 ✭✭✭LawBoy2018


    https://www.boards.ie/discussion/comment/117745480#Comment_117745480

    That's what contracts are for lol



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    #61
    LawBoy2018
    Registered Users Posts: 1,162 ✭✭✭LawBoy2018


    https://www.boards.ie/discussion/comment/117745487#Comment_117745487

    How is this so controversial for you? If either person wants to move out/sell their interest in the property, the other party could simply buy them out if they so wished. If he/she couldn't afford it/wasn't interested, they sell the house. Is it that deep?



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