Proper paperwork for loan from relatives

The_Pilgrim

Removed by OP

chalkie99

For that sort of money and the potential grief get a solicitor and do it properly.

jumperjohn

chalkie99 wrote: »

For that sort of money and the potential grief get a solicitor and do it properly.

Totally agree!!

Angela

Just out of interest what percentage interest are you giving them?

DCFC79

The_Pilgrim wrote: »

I though this was MSE!



I was going to suggest 0.5% above LIBOR

It is MSE but for that amount of cash why not do it properly

Wutang_2

The_Pilgrim wrote: »

I though this was MSE!



I was going to suggest 0.5% above LIBOR

Find a cheap solicitor

bouncydog1

The relative lending the money should also consult their tax advisor as they will have to declare the interest as part of their income.

chesky369

Just because there's a legally drawn-up contract doesn't mean there necessarily won't be problems. People breach contracts all the time.

bargainbetty

Even with contracts there are risks, as Chesky notes. However, to minimise these, have a solicitor drawn up a formal agreement. This must be done with the co-operation of the lenders, or they will need to hire a solicitor to review it too, as there is a risk that they could come back later and say they didn't have adequate legal advice. If you all share one lawyer and pay the bills collectively to demonstrate this, you can help avoid that one.

Seriously, for this type of money, you need proper advice.

CLAPTON

bargainbetty wrote: »

Even with contracts there are risks, as Chesky notes. However, to minimise these, have a solicitor drawn up a formal agreement. This must be done with the co-operation of the lenders, or they will need to hire a solicitor to review it too, as there is a risk that they could come back later and say they didn't have adequate legal advice. If you all share one lawyer and pay the bills collectively to demonstrate this, you can help avoid that one.

Seriously, for this type of money, you need proper advice.

a shared solicitor will have a conflict of interest

bargainbetty

Not necessarily - my ex and I drew up papers for the division of assets that way, and it was fine - the important thing was having each person as an individual client, rather than one person paying and the others just agreeing to stuff. If each person is a separate client, they can act as a collective for the agreement. Some solicitors won't do it, others will. House-buying won't allow this at all for instance.

It isn't the safest way, I agree. I'd rather have two opinions on it - but that's not very MSE.... which is why I suggested it as an option.