Tuesday, September 27, 2022

Plan to part company** - the need for property owners’ deeds

Last week’s post summarised some of the key issues to consider in relation to agreements documenting arrangements between parents and their children for the provision of elder care.

Where substantive assets, particularly housing accommodation, are to be jointly acquired by a parent and one or more children, best practice is to implement a formal deed setting out the exact terms of the arrangement.

Generally, it will be appropriate to implement a deed that has provisions, which are virtually identical to the type of arrangement entered into by arm’s length parties who jointly own property, or for that matter, family or friends who jointly acquire property where there is no elder care relationship in place.

The exact provisions of any agreement will obviously depend largely on the circumstances.

An example of some of the provisions normally included is as follows:
  1. the exact financial obligations between the parties;
  2. rights of access to the property;
  3. term of the agreement;
  4. events that will trigger an ending of the agreement;
  5. rights of first refusal or pre-emption if a party wishes to sell their interest;
  6. circumstances in which a sale of the entire property is to take place;
  7. whether any existing joint owner can attempt to acquire the entire property if a forced sale takes place;
  8. to the extent the property will be rented in a holiday pool, the basis on which a co-owner can access the property;
  9. how costs are to be apportioned;
  10. what is to occur if a party is in default;
  11. what happens if a party loses capacity or dies; and
  12. dispute resolution provisions.
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** For the trainspotters, the title of today's post is riffed from the Go Betweens song 'Part company'.

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