Buy property with a partner

More and more couples today are choosing to delay a trip down the aisle in favour of getting a foot on the property ladder.

Of course, buying a home as unmarried partners has a few complications, but it’s not as difficult as you might think – particularly if you’re smart about it!

These days, it’s incredibly common for people to co-own property with friends, family or romantic partners. It’s a great way to maximise your buying potential, share the responsibilities of maintenance, and lay a solid foundation for a future property portfolio.

Because it’s such a common occurrence, most banks and bond originators are happy to assist unmarried couples (or other partnerships) in making joint bond applications and purchases.

However, the only people who can really ensure your interests and investments are properly protected are you and your partner.

Here are tips on how to do exactly that. I always tell couples to think of joint property ownership as a business agreement. You’d never take a job or start a business without a contract in place, so don’t buy a property without one, either. It’s not about trust, or a lack thereof. It’s a plan of action in case life surprises you.

While asking a lawyer to draw up a customised joint-ownership agreement is always the best option, there are downloadable contract templates available online that can be used as affordable alternatives.

Just be sure you cover all the possible contingencies, including:

How bond payments will be made

How ownership and financial contributions will be apportioned

How costs like insurance, maintenance, rates, taxes and home improvements will be split

What happens if one partner fails to make their contributions

What happens if one partner dies

What happens if one person wants to move out or sell the property early Sadly, even the most iron-clad contract can’t protect you from all eventualities. Banks couldn’t care less what you and your partner have privately agreed on. As far as they’re concerned, if your name is on the bond, you’re responsible for the total bond amount – not just your share of it.

If one partner falls behind on payments, the bank can claim the outstanding amount from the other bondholder. Likewise, if the property sells for less than the outstanding bond amount, the bank will hold everyone equally responsible for settling the difference.

Bill Rawson is Chairman of the Rawson Property Group