In the bay area of California, home prices are really high. These high prices sometimes lead to people deciding to buy properties together even if they are not married yet, or are just friends or colleagues. While it is legal to buy property with other people, documentation is critical. Sometimes if you are not already married and both on title as clear owners, then parties may try to claim the other person does not own the property or should get less if the parties split ways later.
What are the critical steps if you are buying property?
First step, make sure that you are on title when it is purchased as an owner.
The Deed which shows your ownership must also be recorded with the local county recorder’s office. You should make sure that you have a copy of the recorded title.
Second step, make sure to get in writing (preferably in the escrow purchase documents) the financial contribution of each party to any down payment.
So, if Sally contributes $100,000 as a down payment, that should be documented in writing and signed by the purchasers saying that Sally contributed $100,000 as a down payment.
Third step, have an agreement drawn up by an attorney to document how the ownership should work.
This agreement can document the amounts contributed as down payments and whether those are paid back with interest (and the interest rate) before any other equity is split among the owners. Also, what happens as parties make the mortgage payments? Is the equity split among the owners or does the equity only goes to the person making the mortgage payments? What if one party owned the property before they met the other person? How is that split among the parties or preserved?
Protecting your property investment requires proper legal documentation from the start. An experienced business attorney can draft comprehensive agreements that protect all parties and prevent costly disputes down the road.
What happens if I don’t document my downpayment or how equity will be split?
Then, you might end up in court in what is called either a quiet title action (to declare who owns certain property) or a legal action for partition to sell the land and for an accounting to see who gets what. If nothing is properly documented, then it may be difficult to present or prove your case and you may not get all the credit for downpayments or mortgage payments, or taxes or improvements you made to the property.
Don’t let poor documentation lead to expensive litigation. A skilled business lawyer can help you avoid these costly disputes by creating clear ownership agreements from the beginning.
Protect Your Property Investment Before It’s Too Late
Whether you’re planning to buy property with a partner, friend, or colleague, or you’re already in a co-ownership dispute, proper legal guidance is essential. The high cost of Bay Area real estate makes these investments too valuable to leave unprotected.
Contact Nick Heimlich Law today to discuss your property co-ownership needs. Our experienced legal team can help you create comprehensive agreements that protect your investment or resolve existing ownership disputes. Don’t risk losing your hard-earned equity to poor documentation – get the professional legal protection you need.
