Whether you are living with long-term roommates, a romantic life partner or multiple generations of your family, rapidly accelerating real estate prices in our area have led to a massive interest in ‘co-buying’ or buying real estate with other people. Anyone who lives in Washington State knows that the housing market has been subject to steeply rising costs over the past several years. Aspiring homeowners are looking for ways to share the expense of a home and co-buying can be a great solution. Buying a home with other people also comes with a lot of legal obligations and risks, which is where a contract comes in!
Legally speaking, in order to be enforceable, any contract with regard to ownership interest in real estate must be in writing in order to be enforceable. And even if writing your contract down was not required, written agreements allow you an opportunity to work out solutions to potential problems before they cause any hard feelings between you and your fellow property owners. A written agreement also helps protect your rights and make sure everyone is fully committed and on the same page.
Contracts that specify the parties rights with regard to real estate are often called ‘co-habitation agreements’ or ‘co-tenancy agreements.’
Co-tenancy contracts are agreements between property owners who are all on the property title or deed together. These contracts often include the terms for buying out a party who does not want to share ownership anymore, how shared expenses like mortgage payment and utilities are allocated, and what happens if there is a disagreement between the parties
A co-habitation agreement is somewhat similar to a co-tenancy agreement, but this type of contract is used when not everyone is on the deed to the property, though they are living together. Perhaps you would all like to live together but one or more of you does not qualify for financing to be involved in the property purchase, or one of you previously purchased the property and is already in the process of paying down a separate mortgage?
If you are considering sharing the expense of owning a home with someone and a contract can help you answer questions like who pays for insurance, what happens if one of you wants to move, who pays when there is a repair or remodel needed, what happens if one of you gets married or passes away, or what happens if you need to refinance later.
If you are considering co-buying or purchasing real estate with other people, you are welcome to contact Limitless Law PLLC at 360-685-0145 to schedule a consultation and learn more about your options and rights, as well as the types of contracts that may help protect you and your property rights.