Buying Property With Partner
REM #F720
By Ilyce R. Glink
Summary: A reader purchased a duplex with a partner. He is now trying to figure out an equitable way to split expenses after the partner's fiance moved in. Ilyce explains how to write up a partnership agreement.
Q: My partner and I bought a duplex together and are 50/50 partners on everything
dealing with the property, including renovations.
I currently live in the one bedroom unit downstairs. My partner has been living in the 2-bedroom upstairs with a roommate. The roommate pays $750 in rent each month. We’ve been putting the $750 toward the mortgage, taxes and insurance for the property and have split the remainder of the expenses equally.
There haven’t been any problems until now. The renter is moving out and my partner is moving his fiancé in. How should we split our payments now?
A: You and your partner should have a written partnership arrangement that
spells out your financial arrangement.
If you own the property 50/50, but he lives in the larger unit, then either
you should change the ownership of the property to reflect that he occupies
66 percent of the home and you occupy 34 percent, or at least adjust the costs.
You and your partner should sit down and figure out what is equitable now that
his living situation has changed. Perhaps he should pay 66 percent of the mortgage,
taxes and insurance or perhaps you and he should talk to several local rental
agents about how much each apartment unit would rent for. That could be the
basis of your discussion. In some neighborhoods, a 2-bedroom unit would rent
for more than twice as much as a one-bedroom apartment.
A real estate attorney can help you draw up the paperwork.
NOTE: This column is distributed by Real Estate Matters Syndicate, PO Box 366, Glencoe, Illinois, 60022. This column may not be resold, reprinted, resyndicated or redistributed without written permission from the publisher.
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