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My friend and I are looking into getting a loan for a brand new house sometime next year and he will be putting the deposit on it and the house will most likely be under his name and will be paying 50/50 towards the loan, but what my question is where do I stand if for example push comes to shove we have a fall out, can he take it all? Or is there some sort of contract I can get? Just need some legal advice if possible

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Any reason why you don't want it under your name?

Unless you have some written binding agreement that holds up in court, I wouldn't do it unless it was with family.

All i'll say is that if it's an investment property, he'll reap all the tax benefits. Though you can always work out something under the table.

If you have an agreement drawn up there's no reason you can't do it with a mate, you'd just want it to be a mate that you've had fights/arguments with before and stayed friends throughout so you know your friendship and money isn't going to turn to shit over something small. Because worst case scenario you sell the house, pay of the mortgage with early exit and anything leftover you split down the middle, but it would still be a pain in the arse to go through all that.

Another way to do it is to have you and your friend directors in a company that invests in the house, that way your shareholders agreement is your binding contract. The overdraft account goes under the company name and then your mate can't just say it's only been him contributing to the mortgage. But you might miss out on some tax benefits with this way - Tony might know more about this :P

Two things to consider:

- If you both plan on living there, try living together in a 6 month lease or something first just to see how you get along. So many people find out that being friends with someone and living with them are two different worlds.

- What happens if one of you loses your job, can the other afford to cover the repayments (assuming you're not negative gearing with a tenancy)...will they be happy to until you get back on your feet etc.

Any reason why you don't want it under your name?

Unless you have some written binding agreement that holds up in court, I wouldn't do it unless it was with family.

All i'll say is that if it's an investment property, he'll reap all the tax benefits. Though you can always work out something under the table.

cant afford the deposit any time soon so my friend is going to do it therefore it would only be right if it was under his, it wont be a investment property, just a place we can move into

my personal advice?

sell your GTR

buy your own investment property in your name (any area with good growth, not necesarily the best suburb)

but another GTR when you're finished and the property has settled

removes risk

the place is in your name

you have an investment property

finance is easy once you have an investment property

my personal advice?

sell your GTR

buy your own investment property in your name (any area with good growth, not necesarily the best suburb)

but another GTR when you're finished and the property has settled

removes risk

the place is in your name

you have an investment property

finance is easy once you have an investment property

This!

Im stuck in a Honda but at least i bought my own place. Save alot of money not thinking about your next "mod" on the car. Not fun but it helps if you do it.

Going with a mate because you dont have enough money, well, guess what, you will be even worse off when you by the place...youll be broke.

Another way to do it is to have you and your friend directors in a company that invests in the house, that way your shareholders agreement is your binding contract. The overdraft account goes under the company name and then your mate can't just say it's only been him contributing to the mortgage. But you might miss out on some tax benefits with this way - Tony might know more about this :P

Since my name was metioned I'll post a reply :P. Generally people would never purchase a property in a company entity unless there are asset protection issues due to the following reasons:

- Lose the main residence exemption

- Not entitled to the 50% discount on capital gain

- Capital losses and revenue losses are quaratined within the company

- Increases compliance costs

Above points are a mix of an investment/residential property issues but you get the gist of things.

cant afford the deposit any time soon so my friend is going to do it therefore it would only be right if it was under his, it wont be a investment property, just a place we can move into

If you plan to go down this route, what I would do is have a written agreement where by the sales proceeds of the property firstly goes to cover your friends deposit. I.e on sale of the property the first $50K of the property is to go to 'Joe Blogs' with the residual to be split equally between the joint owners.

This covers your mates goodwill and will reduce complications down the track.

Now you owe me a few bourbon and cokes :P

I think it's a fantastic idea and great way to break into market.

I live with two guys (friends since highschool) who have bought together. If drawn up properly there is no confusion or problem provided you both understand the conditions from the start

I have bought a house with a mate. Working well. Having said that he's the only person I know that I trust enough to do it. End of the day it comes down to the people involved. I know people that done it with family and it split up the family.

Contracts are a pain in the arse but it needs to be done.

^ yeah when I say 'friend' I mean his a really close friend but at the end of the day if I have no solid ground to stand on if we do have a fall out I'm screwed with nothing to back me up, that's why I just want know if there is something I can do to cover my ass :/

Yes, a legal agreement...and maintain records of YOU contributing directly to the payment of the mortgage, evidence of you living in the house etc. That way if the agreement is disputed legally, you have documents to stand on. Other than that, worst case scenario you flog the house off and split the residual if there is any.

The good news is that the sooner the deal turns to shit, the less you've contributed towards the mortgage and could stand to "lose", and the longer the deal lasts, the more cemented it will be.

Another consideration on the early deal break is girlfriends...if either of you get a long term girlfriend, will they be comfortable living in that flatmate arrangement until you have the house paid off or ready to sell...or will your mate want to sell and move out with his girlfriend etc.?

Lol whatchu talkin about Alex. I'm sure he knows that, but his talking about possibly buying a house with a friend and having the title 100% in his friends name and the consequences.

Anyways, Birds does raise a good point re what happens in unforeseen circumstances if one party wants 'out' or can no longer service the mortgage. Shit may get complicated.

In any case don't have the title 100% in his name. If he decides not to honour it in the end and not give you your share, your going to have to go to court and you will have headaches. Even if you have the legal paperwork in place in will be up to the discretion of the Judge to interpret the case.

So yeah if you go ahead with this, have the property in both names and sort out the legal paperwork so you mate gets his deposit back on sale of property.

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