Advice Needed - Father Buying a House

Heracles26 on 26/02/2021 - 20:30

Hi all,

So my dad has offered me this: he is to purchase a house or unit valued at $500k.

The house will be half in his name and half in mine.

I will receive half the rent and he will receive the other half.

Eventually it'll be my house entirely.

Now the thing is my father is a capricious man so I'd like some advice as to how best approach this situation when it comes to signing the contract etc. lest I anger him one day and he decides not to honour the above agreement.

I have no idea about contracts, law etc so please speak plainly haha

Much appreciated!

Financial

Comments

  • Quantumcat on 26/02/2021 - 20:33
    +3

    You probably need the advice of an actual lawyer.

    • Heracles26 on 26/02/2021 - 20:44
      +1

      Definitely a good idea!

    • derrida derider on 26/02/2021 - 20:47
      +2

      Probably, yes, get a lawyer. But is this what you want? Sure money is nice, but not at serious risk of vicious family breakups as dad regrets it later, or argues with you about something and wants to punish you. It aint good for an adult to be so beholden to their parent/s.

      Even if your father wasn't capricious I would be very careful to get all financial details drawn up by a lawyer and agreed in writing. Doing it as just a family matter with verbal understandings has huge risk of disaster.

  • whooah1979 on 26/02/2021 - 20:41

    So my dad has offered me this: he is to purchase a house or unit valued at $500k.

    The house will be half in his name and half in mine.

    Why 50/50? Who is bringing what to the table?

    • Heracles26 on 26/02/2021 - 20:43

      That's just what he said

      • Jackson on 27/02/2021 - 00:59
        +2

        In that case I think you need to consider that your dad, being the way he is as you describe, and knowing that he'll probably leave everything to you and your siblings when he goes anyway, wants to motivate you to be responsible, and another way to look at this would be to say he wants to put some golden handcuffs on you.

        I think if you can afford to just go and buy your own place. That way you have proven to your dad you can, and no one is taking anyone for a ride. Otherwise you can sack up and tell him you don't want his money and you will make your own. third option is of course ride it out, but then at the first sight of you not toeing the line he'll hold it over you and you will have the aforementioned discussions then

  • garetz on 26/02/2021 - 20:44

    Sounds like a good deal if you dont get screwed over.

    • Heracles26 on 26/02/2021 - 20:45

      Yes I agree and im very fortunate to be in this position! But he can change his mind and get offended etc at any moment so provided it goes ahead I want to make sure I'm ok

      • garetz on 26/02/2021 - 20:47
        +1

        Sounds like the type of person who will be offended if you try to get a contract involved yourself.

        • Heracles26 on 26/02/2021 - 21:36

          Most definitely

    • brendanm on 26/02/2021 - 21:33
      +3

      Get screwed by over? Op is putting nothing in and getting half the rent and a house at the end of it. Getting "screwed over" would mean op is in the same position they are in now, no rental income, and no house.

      • Heracles26 on 26/02/2021 - 21:37

        Not going into details but screwed over in relation to what siblings are getting from him

        • dizzle on 27/02/2021 - 00:01
          +6

          I hate this way of thinking. It shouldn't matter what your siblings get. Be thankful that he's in a position where he can help you out without you having to rely on any inheritance (In which case he may no longer be with you).

          He's being kind enough to give you a half a million dollar house, which by the time you own it fully will likely be worth more. Even if they get left more than you, you are in a great situation

  • thebossmel on 26/02/2021 - 21:36

    Should not be a issue as long as you are putting <= 50% to buy the house and are 50% partner in it.

    If he changes his mind, he still cannot remove you from the title amd you will still remain owner for 50%.
    If all works well, ultimately you will be the owner. I dont see whats there to lose?

    • Heracles26 on 26/02/2021 - 21:38

      Joint tenants? Or tenants in common? Does it matter?

      You may be right but again I've no idea about any of this

      • miwahni on 27/02/2021 - 01:39
        +1

        If you're joint tenants, then his share automatically passes to you upon his death. If you're tenants in common, then you each have clearly defined shares, and upon his death his share will be dealt with as per his will ie could go to anyone else he may nominate. I'd push for joint tenancy in your position.

  • Transient on 26/02/2021 - 21:37

    Sorry, don't follow.
    Your father is buying a half mill house using his own money.
    You are getting half up front.
    You are getting half the rent.
    ..and you are concerned about, what? Kinda win-win?
    When you both sign the land contract which is in both your names, you both will be owners - each with a 50% interest.
    When you both rent the place out, you can arrange for half the net rent (after expenses) to go into your bank account via lease agreement or when instructing agent.
    If you anger him, there may not be much he can do about the ownership - a (property) lawyer would know.
    The lease could be terminated / changed, but should require the agreement of both lessors so difficult for him to change alone.
    I believe if ownership is joint, the property interest passes to the other when one owner passes away. Tenants-in-common means it passes under the will, which is probably what you do not want.

    As others have said, lawyer up and tell the lawyer what you want done.

  • SF3 on 26/02/2021 - 21:38

    I believe a title could state a 50/50 stake between you and your dad.

    However, you should check with a solicitor and bank ( if mortgaging ), tax accountant on what your liabilities are as your name would have a 50% stake.

  • [Deactivated] on 26/02/2021 - 21:43
    +1

    Why don't you trust your dad and he pay his half to you. He will probably loose his pension

  • Trying2SaveABuck on 26/02/2021 - 23:03

    He is you're father so i dare say he is good for it - but as a general rule you shouldn't go in to business with someone you dont trust or cant depend on

  • The-Kremlin on 26/02/2021 - 23:48
    +4

    I don't get it…your dad is giving you 50% share of a house including 50% of the rent and you pay nothing for it…and you are wanting to make sure he keeps to this agreement that you paid nothing for!!?

    The entitlement of some people…

    • havebeerbelywillsumo on 27/02/2021 - 02:28
      -1

      "I don't get it……The entitlement of some people"… Doesn't read that way to me, "my father is a capricious man", there may be strings attached both overt and covert.

  • tallkid123 on 27/02/2021 - 07:41
    -1

    Your father will own you until he's dead and use that house as leverage if you step out of line.

    • md333 on 27/02/2021 - 15:40

      Can always give it back if it comes to that.

  • Suzique on 27/02/2021 - 09:15
    +1

    Google the difference between types of joint ownership….."joint tenants" or "tenants in common". It's a significant difference as to whether you get full ownership or half ownership if one of the parties die.

  • MrsPofferjie on 27/02/2021 - 21:50
    -1

    First step would be to treat the situation as if he has already screwed you over i.e. get your own lawyer and accountant and pay for them yourself. You might need to consider a situation where he buys the house then insists he needs money and gets you to take out a loan on the place (and in the process get your financial information out of you). Also, consider what would happen to any first home buyer grants/allowances that may be available. Perhaps you could tell him you were thinking of buying a house yourself and, if he has money available for you, you could then take out a loan for the rest of the house and it could be entirely in your name.

  • cashless on 28/02/2021 - 14:56

    Beware of Capital Gains Tax situation. If you own jointly at first, then he transfers ownership entirely to you later, then you may be liable for some or all CGT in event of a gain. Worth doing some research of your own to check that out.
    Whereas, if it is 100% yours to begin with, and you have no other property (assume you don’t), then you can probably avoid CGT entirely, should it go up in value, based on the fact that it is your PPOR (principle place of residence)

  • kiitos on 06/03/2021 - 10:12

    Do you have any further details now? Will there be a mortgage involved? What about maintenance, bills, etc?

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