We here at Nestor Shanahan Auctioneers are meeting more and more buyers who are teaming up to get onto the property ladder. Friends, siblings, cousins and parents with adult children are pooling their incomes and deposits to buy homes they could not afford alone. It can be a smart and practical move, but buying with someone else is a long-term financial commitment, and good relationships are best protected by clear agreements made at the very start. Here are the five things we recommend you agree before you make an offer.
1. How you will own the property
In Ireland, co-owners usually hold property in one of two ways, and the choice has major consequences. As joint tenants, you own the whole property together, and if one of you dies, their share passes automatically to the surviving owner, regardless of what their will says. This suits many couples but is often not what friends or siblings intend.
As tenants in common, each person owns a defined share, which could be equal or reflect different contributions, such as 60/40. Each share forms part of that person's estate and passes under their will. For friends and family members buying together, this is often the more appropriate option, but your solicitor can explain which arrangement best suits your circumstances. Changing the structure later can be complicated, so get it right from the outset.
2. Who is paying what
Be completely open about your finances with each other before you approach a lender. Agree how much each person is putting towards the deposit, stamp duty and legal fees, and keep a written record of every contribution. If one of you is receiving a gift from a parent, your lender will usually require a gift letter, and it is worth checking any tax implications with an adviser.
Understand too that a joint mortgage makes each borrower responsible for the full amount, not just their share. If your co-buyer loses their job or stops paying, the lender can look to you for the entire repayment. If any of you has owned a home before, check with your mortgage adviser how that might affect your borrowing limits and your eligibility for first-time buyer supports.
3. How the home will run day to day
Living together as co-owners is different from sharing a rented flat. Agree how mortgage repayments, bills, insurance and Local Property Tax will be split, and consider setting up a joint account for household costs. Decide how you will handle repairs and improvements, including who pays if one person wants a new kitchen and the other does not. Talk about practical matters too, such as whether partners can move in, whether a room can be rented out and how major decisions will be made. If one person will not be living in the property, such as a parent helping an adult child, agree what role they will play.
4. What happens if someone wants out
This is the conversation most people avoid, yet it is the most important. Circumstances change. One of you may meet a partner, relocate for work or simply want to move on. Agree in advance how that will be handled. Will the remaining owner have the first option to buy the other out? How will the property be valued? Many co-owners agree to use an independent valuation from a local auctioneer, or an average of two. How much notice must be given, and how long will the remaining owner have to arrange finance? If neither can buy the other out, agree that the property will be sold and how the proceeds will be divided.
Without an agreement, disputes can end up in court, where a judge can be asked to order a sale. That process is costly, slow and stressful, and almost always worse than a plan agreed in good times.
5. What happens if the worst happens
Nobody likes to think about illness or death, but planning ahead protects everyone. Lenders generally require mortgage protection insurance, which clears the mortgage if a borrower dies, but consider whether income protection or serious illness cover might also be sensible. Each co-owner should make or update a will, particularly if you hold the property as tenants in common, so that your share goes where you intend. Without a will, your share could pass to relatives under the rules of intestacy, potentially leaving your co-owner sharing a home with someone they never expected.
Put it all in writing
Once you have agreed these points, ask your solicitor to draw up a co-ownership agreement setting out your shares, contributions, responsibilities and exit arrangements. Ideally, each party should take independent legal advice, especially where contributions are unequal or a family member is helping out. It may feel overly formal between friends or relatives, but a written agreement removes uncertainty and protects the relationship as much as the investment.
The bottom line
Buying with a friend or family member can open the door to homeownership sooner than going it alone. By agreeing how you will own the home, who pays what, how it will run, how you can exit and what happens if the unexpected occurs, you can enjoy the benefits of buying together with confidence and peace of mind.
If you would like to discuss buying or selling a property, contact us on 061 415337 or email info@nestorshanahan.ie or visit nestorshanahan.ie.
Disclaimer: This article is based on publicly available information and is intended for general guidance only. While every effort has been made to ensure accuracy at the time of publication, details may change and errors may occur. This content does not constitute financial, legal or professional advice. Readers should seek appropriate professional guidance before making decisions. Neither the publisher nor the authors accept liability for any loss arising from reliance on this material.
