Anyone have any experience of shared ownership?

Shared ownership with friends of partner? I've done it with an ex-girlfriend. Splitting up the house wasn't wonderful (I bought it off her) but it wasn't terribly difficult.

Ultimately, the problems will be whether the other person wants to stay, and if so, whether they can afford to buy you out.

If not, then you have to stay put until you both want to move.

peter

X-No-Archive: yes In message , jon doe

Some second hand information from a close friend. About ten years ago he and his wife and four other families clubbed together to buy a large country mansion set in about fifty hectares on the outskirts of my village. They all pay in GBP2K a year into a sinking fund.

They set up a private limited company to own the estate, each group owning one fifth of the shares. If any party wishes to sell their shares, the prospective new owner/occupant has to be approved by the other share holders.

True there are problems with CGT and other such snags with running a private company, but none of the original group has wanted to sell out yet, and I can't say I blame them. They have two tennis courts, an indoor swimming pool, billiards room, games room, ponies for the kids -- amenities galore which they'd never otherwise have with a conventional purchase.

I don't know how it would work with houses, but I've heard of a scheme for shared ownership of boats:

Either party can get out at any time.

If party A wants out, they offer to buy out the other party (B) and state their offer.

B can either accept the offer, take the cash and leave

In either case, the party that ends up with 100% ownership is free to sell and keep all the proceeds.

Seems fair, but, of course, finance & mortgages will complicate things for houses.

rgds, Alan

And the Moon is made of Wensleydale cheese.

If party A wants out, they'd want to sell their share, not buy the other.

Isn't it more usual to try to find a substitute partner, i.e. to sell one's share on the open market? Since one of the main reasons for going for shared ownership in the first place is probably that sole ownership is too expensive, it seems a bit pointless to expect the other partner to buy you out, since it's likely he couldn't afford to. But yes, first refusal should be offered even if it will probably not be taken, and perhaps the other co-owner knows someone who would be interested in coming on board (groan).

Well, there's the rub. How can one be "free to sell" when it's difficult to find a buyer?

Marine mortgages are not at all uncommon either, by the way.

... then you've got to decide a fair price - the stating partner might hold out for more that the departing one wants...

This does require access to liquid (groan!) captial to work properly.

..as A sets both the amount they want *and* the price they'll pay, so it's in their interests to choose a fair amount.

Think of it as a slightly more complicated version of us sharing a pork pie - "*I'll* cut it in half, *you* choose which piece you want".

If you offer 50% of what I think it's worth I'll sell - If I offer > Seems fair, but, of course, finance & mortgages will complicate things

Indeed - that's in another chapter of the RYA "Buying a boat" book ;-)

rgds, Alan

Not necessarily for the whole thing, perhaps only for the half thing.

Generally only one party wants out, the other does not want to sell his half and can't afford to buy the other's, so the usual solution is to find an outside half-buyer, not an outside whole-buyer. Even if a whole-buyer is then going to be sought, your scheme places both co-owners in the ridiculous position of having to guess the value before a buyer is found. Why not just find the buyer first?

This is a major difference between boats and houses. People don't generally share ownership of a house unless they also share its occupation. It's not very common for complete strangers to buy a house together to live in together (even if not as a couple). It's easier to imagine this happening in the case of a holiday home where the sharing is done by time rather than space, and this is usually the same basis on which boats are shared.

Hence when co-owners of a house split up, it generally leads to the whole house being sold, whereas in the case of boats or holiday homes it's much more likely that only a fraction of the object is sold, with one of the original co-owners staying put.