First home buyers

Q: Like many other young people new to the market I’m looking at buying my first home with a friend, just to get a ‘foot on the property ladder’. What do I need to know about ownership options for my property?

I hear words like “jointly owned’ but what does this mean for me? Bruce G

A: Well Bruce, this is a very common approach now that prices have increased so much.

It’s really more of a legal question so I passed it on to Nick Birdsey of Birdsey and Associates. Here is Nick’s response:

For a residential property, ownership can be held by a private person or persons, in 3 different ways. First, a person can hold the property in their own name, or in their trust. So, looking at personal (non trust) ownership, a person such as Allan, whose spouse or partner is Brenda, can buy in his own name but Brenda still has or may have a relationship property interest. Secondly, Allan and Brenda can buy the property in (a) joint ownership - the Title will say “Allan and Brenda” are the owners - or (b) as Tenants in common in equal shares, where the Title says ” Allan as to a half share and Brenda as to a half share.” There are important differences. With joint ownership ((a) above), if one party passes on, say Allan, his share goes immediately to Brenda, under “survivorship”. The property does not go through Allan’s will or estate. So there is no control over what happens to the couple’s biggest asset. That may be fine, but there are situations where (b) is better. Say that Allan and Brenda have not been together long, and bring 2 children each, Diane and Eric and Gerald and Hesta. Allan can leave his defined half share to his children with Brenda having occupation for as long as she needs it. Brenda can do the same, and after a time they can change the ownership to joint ownership. (b) is also good where there are unequal contributions to the purchase price, eg one third Allan, two thirds Brenda. Sounds complicated I know, so I suggest you discuss it with your lawyer before putting pen to paper.