All parties when co-buying need to form a DECLARATION OF TRUST which helps stipulate how each person pays towards the property ad their responsibilities regarding maintenance and giving notice to sell. It helps protect all co-buyers interests in the event that relationships become unattainable and covers investment amounts, deposits, portion of the mortgage payment ad responsibilities etc.
Each co-buyer as a matter of course should volunteer their credit rating which will make it easier when applying for a joint mortgage.
ukpropertyclub provides it full members with a downloadable outline of a typical Declaration of Trust, which can be used by your chosen solicitor to provide a full document.
What share of the property does each co-owner have.
What percentage of the mortgage is each co-owner responsible for.
The declaration of trust should specify that if one or more co-owners wish to sell their share then the opportunity to purchase that share should firstly be given to the other co-owners.
If one of the co-owners wishes to vacate the property but retain their stake then they may rent the room.
All co=owners must take out and maintain life and critical illness insurance to cover their share of the mortgage.
All co-owners must put in place and maintain accident, sickness and unemployment protection cover sufficient to cover their share of the mortgage payments.
The Co-owners will open joint bank account for the purpose of the mortgage payments and will make timely payments into this account to cover their share of the mortgage.
In the event of the death of one of the co-owners, their estate will be required to meet their share of the mortgage payment until redeemed. The estate must give first opportunity to the other co-buyer/buyers to buy the share if not then sell the share or rent it until a purchaser can be found.
If a successful claim for critical illness is paid the policy holder must agree to use the funds received to repay their share of the mortgage.
If a co-owner deliberately goes into default by absenting themselves without making arrangements to maintain their share of the mortgage or other related payments subject to an agreed time limit the remaining co-owners can rent their space to pay their share of the mortgage or purchase or sell their share at the market rate.