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Five tips for avoiding the pitfalls of buying a property with your child

As lawyers, we are seeing an increasing number of cases where family members are pooling funds for shared ownership houses to live in together, or where an older member of the family pays for an extension or “granny annexe” to their child’s home.

Undoubtedly this trend reflects the fact that people are living longer, coupled with uncertainties about the funding of future care. As a result, people understandably prefer to be cared for in their own home by a relative.

The legal and practical implications of shared living situations with family can be complex; here are our five tips to make the transaction go as smoothly as possible.

Our advice:

Take legal advice at the earliest opportunity and in good time before completion takes place. It is often necessary for parties to take separate independent legal advice; arranging this early will alleviate time pressure later.
Have an open and honest conversation about how the property is going to be owned, what will happen if you fall out or if one of you dies, and how you will share bills and repairs. You can (and should) arrange to record all of these matters in writing, usually in a Declaration of Trust or Living Together Agreement.
Record any intended loans or gifts to your child in writing, so as to avoid uncertainties or arguments later. Many families do not take the time to do this which can lead to difficulties when relations sour or someone passes away.
Make a Will or review your current Will. This is vital because such family property arrangements can have a bearing on your Will and how you intend your estate to pass when you die.
Make a Lasting Power of Attorney (LPA) just in case one of you loses the capacity to make decisions. Otherwise, the absence of an LPA may prevent any dealings with the property or your interest in it.

Here at Astle Paterson, we have specialist Property and Wills Lawyers who can guide you through the process.