Are you planning to buy a home with a spouse or a friend? Here are some crucial conveyance mistakes that you should avoid making.
Putting Only One Name on the Deed
Some people may think that there is no problem if only one of the parties to a home purchase appears on the title deed of that home. This is especially true for very close friends who may not imagine that anything can go wrong between them. However, the relationship can sour and the person whose name is on the title deed may ask the other person to leave the home. When that happens, it will be very difficult for you to prove that you are entitled to that property if your name does not appear on the title deed. It is therefore prudent to ask the conveyance professional that you have hired to include all the names of the people purchasing that property when processing the title deed.
Not Indicating Each Person's Ownership Stake
Disputes can also erupt later on in case more than one person acquired the property but the conveyance documents do not stipulate clearly who owns which fraction of the property. For example, you may fail to agree on how to share the profits in case you eventually sell that property. Decide whether you should own that property jointly, or you should own it as common tenants. Joint ownership means that you have equal shares, and the property will revert to the second person in case one dies. Common tenancy may mean that each person owns a predetermined fraction of the property. For example, you may own 60 percent while your friend owns 40 percent of that property. Such details in the conveyance documents provide an easy way to avoid conflicts (such as the cited conflict over the division of profits after a sale). This is because the ownership stake determines how much one should benefit in case profits are being shared.
Not Updating Your Will
You should write a new will or update the existing one in case you purchase a property with another person. The new will helps to clarify what should happen to your stake in that property in case you die. For example, your will can bequeath your share of the property to a family member. This document will protect your interests in case the other person on the title deed claims that he or she should be the sole owner of that property after your death.
Discuss the issues above with your conveyance professional. He or she will be able to draft conveyance documents that clarify all ownership issues and protect your interests once you buy a property with another person.www.geoffwilliamsassociates.com.au
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