The rising cost of living and high interest rates are challenging consumers, and many are looking at alternative ways to buy property. One solution when a house or apartment is just too expensive is for friends, family or business partners to do it together.
He says FNB has financed families pooling their resources to buy a home for all of them, groups of single people buying a big house to use as a commune, siblings and extended family members buying a house for ageing parents, and friends buying a house to share as a holiday home, as well as groups wishing to finance investment and rental properties.
This involves the remaining owners requesting that the bank transfer the portion of the individual who is exiting the arrangement into the names of the remaining owners – or the name of a new co-owner if one is added.This process involves a credit assessment of the remaining individuals or of the new co-owner who is brought in.
“The principle of undivided rights and responsibilities states that even though ownership is divided, the rights and responsibilities associated with the property remain undivided. Each co-owner has the right to occupy and use the property based on their share, but this right cannot be exercised in a way that interferes with the enjoyment of other co-owners or restricts their access to their own share.“Pitfalls that clients may face in collective buying would be an instance where an individual of the collective default on the home loan repayments. This will still require all customers to jointly upkeep full monthly repayments of the bond,” according to FNB.