Owning Property with Family: Key Considerations and Potential Challenges

Owning Property with Family

Owning property with family members can be a rewarding venture, providing an opportunity to build wealth together and create shared properties for future generations. However, it also comes with unique challenges and responsibilities that must be carefully navigated. At Robertsons Solicitors, we understand the intricacies involved in family co-ownership and are here to guide you through the essential considerations and potential pitfalls.

Key Considerations for Family Property Ownership

As you embark on what could be the most significant investment of your life—buying a home—it’s essential to consider the future, regardless of whether you’re purchasing individually or with others.

Ownership Options:

  • Joint Tenancy: In joint tenancy, all owners have equal rights to the property, and if one owner passes away, their share automatically transfers to the surviving owner(s). This arrangement simplifies inheritance but restricts the ability to specify individual shares in a will.
  • Tenancy in Common: This allows owners to hold specified shares of the property, which can be equal or unequal. Each owner can designate their share to a chosen beneficiary in their will, making it beneficial for estate planning. Unlike joint tenancy, the deceased owner’s share does not automatically transfer to the surviving owner(s), but forms part of their estate to be distributed as per their will.
  • Declaration of Trust: This document provides detailed guidelines on ownership arrangements, specifying monetary amounts or percentages that co-owners may wish to protect. It is particularly useful when holding property as tenants in common, allowing for clear delineation of ownership shares and responsibilities.

For individuals or parties in non-traditional relationships, such as friends or business partners, the legal framework for property distribution may differ. It’s crucial to clearly document your intentions regarding ownership and what should happen in case of separation or death. Regardless of your relationship status, making a will is advisable to safeguard your interests and ensure your intentions for the property are honoured upon your death.

Financial Contributions and Responsibilities

Clearly define each party’s financial contributions towards the purchase, mortgage payments, maintenance, and other property-related expenses.

Establish a joint account for property expenses to ensure transparency and ease of management.

Usage and Management

Draft an agreement detailing how the property will be used, managed, and maintained. This should include provisions for regular maintenance, improvements, and handling emergency repairs.

Exit Strategy

Plan for potential exit scenarios, such as selling the property or buying out a co-owner’s share. This can prevent disputes and provide a clear pathway if circumstances change.

What If a Co-Owner Faces Financial Difficulties?

Financial difficulties can significantly impact property ownership dynamics. Here’s how to navigate these challenges:

Communication and Documentation

Open and honest communication is crucial. Discuss any financial issues as early as possible and document all agreements and decisions to avoid misunderstandings.

Refinancing and Restructuring

Consider refinancing the mortgage to lower monthly payments. If one owner can no longer meet their obligations, the other owners may need to restructure the ownership arrangement or financial contributions temporarily.

Legal Protection

Ensure you have legal agreements in place that outline each party’s responsibilities and the steps to be taken in case of financial difficulties. This might include provisions for renting out the property or selling it to cover debts.

Sale of Property

In severe cases, selling the property might be the best option. The proceeds can be used to pay off any outstanding debts, with the remaining amount distributed among the owners according to their ownership shares.

What Happens in the Event of Divorce?

Divorce can complicate property ownership, particularly if the property was jointly purchased by a married couple. Here’s what you need to know:

Property Division

The division of property in a divorce depends on whether the property is considered marital (matrimonial) or separate (non-matrimonial). Matrimonial property, acquired during the marriage or as a result of the joint endeavours of the parties, is typically subject to the sharing principle, while separate property, inherited or owned before the marriage or acquired after separation / divorce may not be subject to the sharing principle. The court can still have regard to such property as a resource and may still ‘invade’ that property for distribution if there is insufficient marital property to meet both party’s needs. Each case will be decided on its own facts and as such specialist advice should be sought.

Court Intervention

If the divorcing parties cannot agree on the division, the court may intervene to decide based on factors such as, needs, income and earning capacities,  each party’s financial contributions and resources, the length of the marriage, and other relevant circumstances. The paramount consideration will be the welfare and needs of any child of the family.

Settlement Options

One party may buy out the other’s share, or the property may be sold, and the proceeds divided. Sometimes, one party may be granted the property while the other receives other assets of equivalent value.

Childcare Considerations

The needs of any child of the family will be a paramount consideration. If children are involved, and there are insufficient assets and income to meet both party’s needs, the primary caregiver might be allowed to stay in the property until the children reach adulthood, with the division of the property postponed until then.


Owning property with family members can be a fulfilling experience, but it requires careful planning and clear agreements to navigate potential challenges. Whether dealing with financial difficulties or facing a divorce, having robust legal arrangements and seeking professional advice is crucial. At Robertsons Solicitors, we are dedicated to helping you manage these complexities with confidence. Contact us today to learn more about how we can support your family property ownership journey.


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