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Given the Brexit enforced changes to the rules of non residents and their length of stay, has anyone experienced sharing a property purchase with a friend/colleague etc, in order to share the 12 months, and if so, are there any obvious or not obvious challenges.
Hope that makes sense!
I don't have any personal experience, or experience of similar in Spain; however, I know siblings who have bought together in the UK.
The main thing that they were recommended to do (and did so) was to have solicitors draw up a very detailed legal agreement covering every eventuality and what would happen to the property. This included death or marriage (in their case, but this could include divorce) on each side; change of mind; first refusal of the other party to buy the other party out; liability for legal fees; liability for losses (e.g. if one side wants out, but property is now worth less than paid for); split of profit (e.g. if one wants out, but the property is now worth more than paid for it); inheritance, no sub-letting, etc. etc.
It's a bit like a pre-nup - you have to openly discuss and agree outcomes for all the things you don't want to happen.
Hope this helps!
Posted: Wed Oct 20, 2021 11:45pm
Very helpful member
alcrocko wrote on Wed Oct 20, 2021 4:48pm:
Given the Brexit enforced changes to the rules of non residents and their length of stay, has anyone experienced sharing a property purchase with a friend/colleague etc, in order to share the 12 months, and if so, are there any obvious or not obvious challenges.
Hope that makes sense!
Unless you are buying into some sort of Timesharing agreement, that has already had the legalities of the divisions legally set out, then all the people who are signed as owners on the escritura, would be treated exactly the same as any other type of purchase between couples or friends etc. You would all own the property equally and would all be liable for any costs or taxes that the other parties might incur. Any privately-made agreements between you might not be taken into consideration, should there be any tax demands or sanctions placed on the property.
Here are a couple of links to sites dealing with fractional ownership.
https://andysirkin.com/fractional-ownership/general-information/frequently-asked-questions/
https://www.solicitorsinspain.com/articles/buying-property-spain-friends-and-family
Posted: Thu Oct 21, 2021 12:05am
Super helpful member
Old saying: "a partnership is a sinking ship". Given that agreements made between two people in love, married with children, tragically often break down, what chance for agreements based upon much flimsier principles?
RichT wrote on Wed Oct 20, 2021 7:03pm:
I don't have any personal experience, or experience of similar in Spain; however, I know siblings who have bought together in the UK.
The main thing that they were recommended to do (and did so) was to have solicitors draw up a very detailed legal agreement covering every eventuality and what would happen to the property. This included death or marriage (in their case, but this could include divorce) on each side; change of min...
Read more...
...d; first refusal of the other party to buy the other party out; liability for legal fees; liability for losses (e.g. if one side wants out, but property is now worth less than paid for); split of profit (e.g. if one wants out, but the property is now worth more than paid for it); inheritance, no sub-letting, etc. etc.
It's a bit like a pre-nup - you have to openly discuss and agree outcomes for all the things you don't want to happen.
Hope this helps!
Thank you, and makes complete sense. I appreciate your thoughts.
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Mags44 wrote on Wed Oct 20, 2021 11:45pm:
Unless you are buying into some sort of Timesharing agreement, that has already had the legalities of the divisions legally set out, then all the people who are signed as owners on the escritura, would be treated exactly the same as any other type of purchase between couples or friends etc. You w...
Read more...
...ould all own the property equally and would all be liable for any costs or taxes that the other parties might incur. Any privately-made agreements between you might not be taken into consideration, should there be any tax demands or sanctions placed on the property.
Here are a couple of links to sites dealing with fractional ownership.
https://andysirkin.com/fractional-ownership/general-information/frequently-asked-questions/
https://www.solicitorsinspain.com/articles/buying-property-spain-friends-and-family
Thank you, and I will be sure to have a read through the links you sent.
PeterC wrote on Thu Oct 21, 2021 12:05am:
Old saying: "a partnership is a sinking ship". Given that agreements made between two people in love, married with children, tragically often break down, what chance for agreements based upon much flimsier principles?
This is my biggest concern to be honest. Circumstances change, so do people, finances etc. It's a long list of things that can change, and that's why the agreements need to be lengthy and detailed. Admittedly it is fraught with challenges, however I see it as otherwise a sensible way to get around the restrictions which currently exist. Thanks for your thoughts.
Mags44 wrote on Wed Oct 20, 2021 11:45pm:
Unless you are buying into some sort of Timesharing agreement, that has already had the legalities of the divisions legally set out, then all the people who are signed as owners on the escritura, would be treated exactly the same as any other type of purchase between couples or friends etc. You w...
Read more...
...ould all own the property equally and would all be liable for any costs or taxes that the other parties might incur. Any privately-made agreements between you might not be taken into consideration, should there be any tax demands or sanctions placed on the property.
Here are a couple of links to sites dealing with fractional ownership.
https://andysirkin.com/fractional-ownership/general-information/frequently-asked-questions/
https://www.solicitorsinspain.com/articles/buying-property-spain-friends-and-family
Mags44 is correct. You would all be jointly & severally liable for any debts, taxes, underpayments, etc. Any separate legal agreement between the different parties would not indemnify each other against the headline issue, but it would form a basis for recovering costs, etc. as set out in the agreement.
Posted: Thu Oct 21, 2021 8:01pm
Super helpful member
how on earth would you agree who had the use of the place?
PeterC wrote on Thu Oct 21, 2021 8:01pm:
how on earth would you agree who had the use of the place?
It would be chunks of 3 months each agreed in advance if that suited both parties, or a variation of this, but it would need to be agreeable to both, which admittedly wouldn't be straightforward.
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