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Partnership - Buy to Let

  • 10-02-2015 9:59am
    #1
    Hyzepher
    Moderators, Recreation & Hobbies Moderators Posts: 4,668 Mod ✭✭✭✭


    Talking to a friend of mine who some years ago bought a house with his brother to let. The rent they are getting doesn't meet the mortgage and they are both paying an equal share to make up the difference.

    The brother is broke but my friend has a good job etc. Apparently my friend is worried that the bother will stop paying his share.

    They don't have a written agreement about the house but the mortgage is in both their names.

    What is the legal position if the other guy stops paying his part and the mortgage goes into arrears? Will the bank come after my friend for all the money - given that he's more likely to have savings - or will they just focus on the bother as he's the one not paying?


Comments

  • #2
    CIARAN_BOYLE
    Registered Users, Registered Users 2 Posts: 14,599 ✭✭✭✭CIARAN_BOYLE


    Hyzepher wrote: »
    Talking to a friend of mine who some years ago bought a house with his brother to let. The rent they are getting doesn't meet the mortgage and they are both paying an equal share to make up the difference.

    The brother is broke but my friend has a good job etc. Apparently my friend is worried that the bother will stop paying his share.

    They don't have a written agreement about the house but the mortgage is in both their names.

    What is the legal position if the other guy stops paying his part and the mortgage goes into arrears? Will the bank come after my friend for all the money - given that he's more likely to have savings - or will they just focus on the bother as he's the one not paying?
    99% of the time if there are two names on the mortgage they are jointly and severally liable for the mortgage.

    Therefore the bank can come after your friend for all the money if they wish. To be honest in a partnership like this I would advise selling the property if either partner cannot meet repayments if it is in positive equity as it will just go messy otherwise.


  • #3
    Mr. Incognito
    Registered Users, Registered Users 2 Posts: 9,798 ✭✭✭Mr. Incognito


    They need to sign apartnership agreement. Are they ready for. 25 to 30 year commitment? Sounds like a disaster


  • #4
    Peregrinus
    Registered Users, Registered Users 2 Posts: 26,984 ✭✭✭✭Peregrinus


    It would be unusual if the mortgage was not joint and several, and the bank will pursue all the borrowers for any shortfall but - for obvious reasons - will focus their efforts on whichever borrower they think has the most money.

    We probably shouldn't give financial or investment advice on this board any more than legal advice. But it if one co-owner is financially stressed it would be better for all co-owners if the arrangement were unwound in an order fashion than a disorderly fashion. Just sayin'.


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