Is dual occupancy right for you?
Category Advice
An increasing trend is the dual-occupancy route, where homeowners either rent out a portion of their property or choose to co-own a property with a friend or family member.
Understand all legal liabilities
Before going ahead with a tenancy or a co-ownership, make sure that you fully understand all the legal consequences of the agreement. For example, as a landlord, you will have to pay for repairs if anything breaks within the tenanted spaces, and you will also need to accept the risk of potentially having to deal with a defaulting tenant. As a co-owner of a property, you will still be liable for the loan repayments even if the person with whom you co-signed fails to make their portion of the payment.
Understand the cancellation policy
Nobody ever enters into an agreement with somebody expecting that they might need an early out. However, it is prudent to be prepared for any eventuality - which includes understanding what process to follow should either party want to end the dual occupancy early. A lease agreement will clearly outline the procedures around terminating the lease - if not, ask your rental agent for advice. Co-ownership, however, is a lot more costly and complicated to get out of. Either you both would need to agree to sell, or the one owner would need to gain full ownership of the property by buying out their partner. In these cases, it would be best to seek professional legal advice from a transferring attorney.
Consider your long-term plans
Because these agreements are legally binding, it is important to consider your future plans before making a final decision, as these agreements cannot be instantly undone. If you are letting out a portion of your home, consider whether you might need that space within the near future, either for a growing family or possibly for ageing parents. If you are co-owning with a friend, consider how both your lives might change in the mid-to near-future - if you're both single, what would happen if either of you got married or had children?
Lay down the rules
The quickest way to sour any dual occupancy relationship is when there are no rules and guidelines in place to govern how you will both co-exist on the property. Even when you co-own the space, it is important to have a set of written rules that can be referred to whenever a dispute arises. A tenancy agreement might include certain rules like no pets and no smoking, and so too should your agreement with whomever you choose to co-own the property.
Author: LRE Group