Joint Purchases and Cobuyer Agreements
For many prospective homeowners, buying a home is more affordable when it is a joint purchase involving a co-buyer agreement. In many cases, buying with others allows each buyer to buy a home that he or she might otherwise not be able to afford. Although joint purchases can be a good idea from a financial perspective, several decisions should be made ahead of time and put in writing to avoid future conflict. You can consult the experienced Boston real estate attorneys at Pulgini & Norton about the terms of your agreement with the other buyers, including how you will take title in the deed.Joint Purchases and Cobuyer Agreements in Massachusetts
Perhaps the most crucial issue to decide ahead of time is how co-buyers will take title in the deed—as tenants by the entirety, tenants in common, or joint tenants. You can only take title as a tenant by the entirety as a married couple. The seller must deliver the deed to the buyer in order for the buyer to take title. The deed will describe the parties, the property, the purchase price, and whether the property has any warranties or special conditions.
The type of title that you take with a co-buyer will affect the degree of interest that each buyer has and how the property is transferred in case of death. When the co-buyers are not married, they can take title as tenants in common or joint tenants with rights of survivorship. When title is taken as joint tenants, each co-owner will have an equal share in the home, and when one co-owner passes away, the other co-owners split that interest equally. Whoever is last to survive will own the whole home.
In contrast, tenants in common can have unequal shares, and each co-owner takes separate legal title, which can be transferred as that co-owner wishes. This means that when you take title as a tenant in common, you may eventually share ownership with someone with whom you had no interest in sharing property. Each tenant in common may dissolve the tenancy in common by selling the interest, filing a partition action to sell the house, or buying out the other tenants in common.
It can be helpful to draft a co-ownership agreement ahead of time, which sets forth each co-buyer's rights or responsibilities. Having a carefully drafted written agreement in place can avoid inefficiency, expense, and the possibility of an adverse outcome in court. A strong agreement will cover ownership percentages, how expenses such as mortgage payments, insurance payments, and the maintenance of the property will be divided, and what will happen if a co-owner wants to sell and the other co-owners do not approve of the potential buyer.Explore Your Real Estate Options with a Boston Attorney
There are financial advantages to making a joint purchase using pooled resources, but there are also potential pitfalls. When you buy a home with a cobuyer, you should consult a Boston real estate lawyer to help with the home purchase process and cobuyer agreement. The attorneys at Pulgini & Norton advise and represent clients in Braintree, Quincy, New Bedford, and other cities in Massachusetts. Call us at 781-843-2200 or contact us via our online form for a free consultation.