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Buying property under construction jointly with a friend

 
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mpca



Joined: 11 May 2009
Posts: 85

PostPosted: Fri Feb 25, 2011 4:01 pm    Post subject: Buying property under construction jointly with a friend Reply with quote

Guys, please help.

Am planning to buy a property under construction jointly with a friend as banks will not approve based on my credit standing alone. The written understanding we intend to have is that we both agree to sell upon completion and split the cap gains (net of rpgt and other costs). Just wondering what are the consequences I will face if in the unlikely event, one party does not cooperate...or are there any other legal complications that can arise by entering into this arrangement...
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hfchuraymond



Joined: 11 Jun 2009
Posts: 606

PostPosted: Tue Mar 01, 2011 6:24 pm    Post subject: Reply with quote

No way of discovering which way the venture will take its turn. You have to set a dateline for the completion date, especially when joint funds are matters which cannot be avoided. Also, how exigencies are met if insufficiency arises. If you are thinking of getting a loan, then, how repayment is to be made and whose responsibilities. A guarantee may also be an issue here.
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cynthusc



Joined: 16 Sep 2005
Posts: 504

PostPosted: Tue Mar 22, 2011 3:24 pm    Post subject: Re: Buying property under construction jointly with a friend Reply with quote

mpca wrote:
Guys, please help.

Am planning to buy a property under construction jointly with a friend as banks will not approve based on my credit standing alone. The written understanding we intend to have is that we both agree to sell upon completion and split the cap gains (net of rpgt and other costs). Just wondering what are the consequences I will face if in the unlikely event, one party does not cooperate...or are there any other legal complications that can arise by entering into this arrangement...


If one party does not co-operate then the property cannot be sold off. If the loan is under both your names then both parties will be affected if the property is not sold off. This means that both of you will have to continue paying the loan even if one party refuses to sell.
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hfchuraymond



Joined: 11 Jun 2009
Posts: 606

PostPosted: Tue Mar 22, 2011 4:55 pm    Post subject: Reply with quote

Guess you should consult your banker first.

That is not the best of all outcomes in the event funds are of concern, whether immediate or in time to come.

Not forgetting, funding is an important task ahead of time, not behind schedule. Your choice.
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