Savings for a group of people

mamos

Hi All

We have a group of people who want to club together to buy a piece of land.

We want to set up an account that we can all pay into but the money is safe from any one or even a small group taking the money out.

We are going round in circles trying to come up with the right way to go about this.

I think we need to formalise the group into a trust or a company or something but I don't know what is best.

Nearer the time we will seek professional advice but at the moment we just need to know what our options are

Any advice would be great

Thanks

mamos

CLAPTON

separate saving accounts

if you can't trust the other people to save the agreed amount then you would be mad to have a joint a/c or indeed buy land with them

alfiesmum

I would all save individually until such time that there is enough money to go ahead with the purchase of the land. And then have everyones financial interest correctly represented in a legally drawn up contract.

At any time until the land is purchased anyone of you could have a change of heart, and want to pull out of the deal. If this occurs it's unreasonable to stop them withdrawing their money. Therefore it should stay under each contributors sole name, until the land is bought.

That's just how I would do it. Hope it makes a little bit of sense!

mamos

If someone wanted to pull out of the deal at any time then of course they could and any money paid into the account by them - expenses + any interest would be paid back to them.
However they could not withdraw the money themselves it would need to organised by the group.
I think the problem with each member each having their own accounts is it will be difficult for the group as a whole to know how much money is actually in the accounts at any one time. Plus it may be too tempting to use the money in the account for other purposes.

We may in the future require a mortgage as a group and the maximum number of people named on a mortgage is four so I think we need to set up a separate legal entity

CLAPTON

mamos wrote: »

If someone wanted to pull out of the deal at any time then of course they could and any money paid into the account by them - expenses + any interest would be paid back to them.
However they could not withdraw the money themselves it would need to organised by the group.
I think the problem with each member each having their own accounts is it will be difficult for the group as a whole to know how much money is actually in the accounts at any one time. Plus it may be too tempting to use the money in the account for other purposes.

We may in the future require a mortgage as a group and the maximum number of people named on a mortgage is four so I think we need to set up a separate legal entity

why is it difficult to know how much money is available?
you just ask them; if you don't trust their replies them enough said.


as long as the necessary funds are available when the money is needed then why does it matter where the funds are.
no less secure that a system where some-one can withdraw there funds at any time.


why complicate a simple problem?

mamos

There may be over thirty of us so keeping track of money in thirty separate accounts and then getting the money off of all of them in order to buy the land etc I think it would be too complicated.

CLAPTON

how often are you going to buy land?

mamos

Once initially but once we have the land we will probably buy up more parcels here and there

antrobus

mamos wrote: »

....We have a group of people who want to club together to buy a piece of land ... I think we need to formalise the group into a trust or a company or something ...

I think so too. If I remember my Law of Property Act correctly, a maximum of four people can hold legal title to land, so given that there "over thirty" of you....

Whether you go for a 'trust or a company or something' could well depend on why you're buying the land, i.e. is it a business venture or is it more of a leisure thing. I think that once you've worked out what type of legal vehicle you're going to use to buy the land, it might be obvious what kind of account structure you need beforehand to finance the venture.

mamos

antrobus wrote: »

I think so too. If I remember my Law of Property Act correctly, a maximum of four people can hold legal title to land, so given that there "over thirty" of you....

Whether you go for a 'trust or a company or something' could well depend on why you're buying the land, i.e. is it a business venture or is it more of a leisure thing. I think that once you've worked out what type of legal vehicle you're going to use to buy the land, it might be obvious what kind of account structure you need beforehand to finance the venture.

Thanks antrobus

It is more of a leisure type thing but we may well look into ways of making a little money off the land if only to help with the upkeep.
No one in the group is in it to make money but it is never a bad thing to have a little bit of income into the group.

Who would be the best person to talk to about it. A solicitor, an accountant, a financial adviser?

Ken68

Your venture ,Mamos, seems a bit like the three guys who had a neighbouring allotment. One of them was only seen at harvesting time.
Make sure you are getting paid for your efforts in setting it up.