Selling up and pooling resources with parents to buy a larger property

BoBoDobie

We've been looking into the concept of selling our house, my parents selling theirs and buying a farm together. Somewhere with 2 separate houses but on the same property ie a farm house and converted barn, that sort of thing. My mums spoke to her solicitor (who is a friend of the family) today to gauge his thoughts and he says its a fairly common thing to do BUT he would only do it (or recommend doing it) if the financial input came from myself and my parents, not my other half. This is has obviously put a spanner in the works.

I can see in theory why this would be a good idea presumably incase we split up etc although thinking about if, even if the mortgage wasn't in my OH's name and we still split, presumably he would have some right to the property? Our current mortgage is based on OH's income as he is the main breadwinner. I don't think we'd even get a mortgage based on my income and if we could I don't think OH would want to live somewhere he had no rights to (or substantially less rights than the status quo where we jointly own our house).

I just wondered if anyone had any experience of this at all especially in terms of the solicitors reluctance to proceed. For info my parents would be contributing approx two thirds and we'd be contributing about a third (most of that would be a mortgage). I would have thought that legally it could be drawn up to reflect that we owned less and in the event of a split, only our house would be in dispute and I'd have to either buy OH out or worse case scenario we'd have to sell that? Is that not an option? I can't see why the solicitor is against that?

david29dpo

Firstly, up to 4 people can be on the title and all have to be on the mortgage (joint mortgage) you cant have someone on the title who is not on the loan application. You could have the title tenants in common, meaning all parties have 25% share or any percentage with a deed of trust in place. Upon sale or a buyout, each get there percentage. All of this has nothing to do with the opinions of the solicitor. However, next door to me have this arrangement and they do nothing but argue.

456789

The solicitor has probably experienced previous hassle when the OH has decided he wants out

BoBoDobie

Thanks guys. No doubt it would be a hassle if OH wanted out but we'd need his income for the mortgage and it wouldn't be fair for him to live there with no claim to a share of the property in the event of a split. Not sure about the 25% share thing as my parents would be putting in 3/4 and we'd be putting in 1/4 (and half of that would be a mortgage)?

Has anyone actually done this?

Fire_Fox

If you want to buy a farm with two properties on it, you are talking about something with one land registry entry where everyone own a portion of everything - so you would own part of the building your parents live in and they own part of the building you live in. What then do you do about maintenance or if one couple needed to sell?

Ideally you need to buy two adjacent properties with two distinct entries in respect of land registry - so your parents own one building and perhaps plenty of land and you and your OH own the other building and a modest garden.

It may be possible to offer on a single farm and then split the property in two as part of the exchange and completion process or soon afterwards, but your mortgage company would need to agree to this. If it was financially possible your parents could perhaps buy the whole farm and then sell a building to you.

Pee

My first thought was horror at your title as I don't think families living together is ideal, however it could work out if two properties are involved. How you split the land and houses up is up to the four of you and the mortgage company, so pretty much anything could be done.

Is your OH your husband or is this a very long term and commited relationship? Do your parents and your OH really know one another and do they have a lot of views in common regarding money etc? What will happen if one or both of your parents require care? What will happen if anyone dies or changes their life plans?

Buying with other people does complicate matters.

BoBoDobie

Thanks guys for your input. I say 'farm' but it really just needs to be any rural property that has land. If we bought as one property could with split the entry on the land registry or that what you mean by doing it as part of the 'exchange and completition process)?

It's not financiallly possible for them to buy the whole farm as they need our financial input to be able to buy it. If they did buy it and sell us a building, would that be classed then as two separate properties?

We're not married no, in a LTR but the solicitor said it wouldn't make a difference if we were married - he still wouldn't want OH to be financially involved.

I understand its not all straightforward not sure why OH and parents would have to have the same views in common? We are planning on being 'neighbours' rather than actually living under the same roof but yes I can see what you mean about parents needing care and tbh that's one of the reasons I think it would be a good idea so I can be close by.

Regards someone dying or changing life plans then I guess that's why we need to have it legall in writing to ensure fairness prevails. I suppose worst case scenario is that whoever needs to move would sell 'their' house and whoever was left would get new neighbours?

Fire_Fox

The title of a property can be split at any stage - before, during or after completion. However, if you do so before exchange this is becomes the responsibility of the old owner and they may not want the hassle. If you do it mid-sale it will slow the purchase process down and may have implications with the bank - what are they valueing for mortgage purposes? They would usually value what the deal is on the day of the visit, not what it will be some months hence.

If you split the property after completion you would definitely need the permission of the mortgage company and this may or may not be straightforward. It would be easier if you were to buy adjacent properties that happened to be for sale at the same time - either two old houses in the same street, or two new builds next door to one another.

BoBoDobie

Thanks Fire Fox for your info. It think we need to sit down with the solicitor and have a chat all together.

As I say I it wouldn't be on a street as such and it wouldn't be a new build - I am talking rural remote farm in the middle of nowhere!!

chickmug

I am sorry to be negative but I have seen this sort of thing more than once with parents and kids, brothers and sisters andother combinations. I have seen it work but also seen the acrimony when it doesn't. Even with families who felt they were really close at the outset.

So my advice is to be very careful.

BoBoDobie

Thanks chickmug, I appreciate what you're saying totally. I just feel its worth a shot at doing it.