Joint ownership of real estate?

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DannyMotorcycle

Active Member
I'm looking at buying some real estate. It won't be my home, but it will be an investment.
I can afford it and i can use it no matter what. However I can spare some of it. So I was
thinking I could offer my long time friend half ownership of it. If his money problems means
he pays late or I pay it all and even only puts a dollar one it, i'm not going to be bothered by
it.

My question is... If I offer for him to be on the deed for half, with a contract and all,
if he has any personal financial debts could they put a lien on the property? That
would be the deal breaker. Or would md or charles county law prohibit liens
from being placed on jointly held properties?

I'm paying all cash so i dont' need any of his payments, and i dont' need all of the property
usage to myself either, so anything he would contribute would make the property that
much cheaper for me and I'd still get all the usage i need and he could benefit from it too.

Anyone know how the local laws are for joint property as investors instead of the marital type of joint ownership?
 
Grumpy

Grumpy

Well-Known Member
If you don't have to invoive another person..DON'T. Your co-investor's problems could become your own.
 
chernmax

chernmax

NOT Politically Correct!!
IMO Yes, any assets in their name could be frozen or a lien placed against in any bankruptcy or debt legal proceeding! Because he would have to list all his assets in those types of proceedings.
 
T

tommyjo

New Member
DannyMotorcycle said:
I'm looking at buying some real estate. It won't be my home, but it will be an investment.
I can afford it and i can use it no matter what. However I can spare some of it. So I was
thinking I could offer my long time friend half ownership of it. If his money problems means
he pays late or I pay it all and even only puts a dollar one it, i'm not going to be bothered by
it.

My question is... If I offer for him to be on the deed for half, with a contract and all,
if he has any personal financial debts could they put a lien on the property? That
would be the deal breaker. Or would md or charles county law prohibit liens
from being placed on jointly held properties?

I'm paying all cash so i dont' need any of his payments, and i dont' need all of the property
usage to myself either, so anything he would contribute would make the property that
much cheaper for me and I'd still get all the usage i need and he could benefit from it too.

Anyone know how the local laws are for joint property as investors instead of the marital type of joint ownership?
Click to expand...

Here's the real question...

What on Earth would possess you to come here and ask a question like that?!?! Do you really think you can trust any answer you get?

PT Barnum...proven right every freaking day of the year.
 
L

limblips

Well-Known Member
PREMO Member
tommyjo said:
Here's the real question...

What on Earth would possess you to come here and ask a question like that?!?! Do you really think you can trust any answer you get?

PT Barnum...proven right every freaking day of the year.
Click to expand...

Apparently we can rule out TJ as the recipient of one half of the land........
 
nobody really

nobody really

I need a nap
DannyMotorcycle said:
I'm looking at buying some real estate. It won't be my home, but it will be an investment.
I can afford it and i can use it no matter what. However I can spare some of it. So I was
thinking I could offer my long time friend half ownership of it. If his money problems means
he pays late or I pay it all and even only puts a dollar one it, i'm not going to be bothered by
it.
My question is... If I offer for him to be on the deed for half, with a contract and all,
if he has any personal financial debts could they put a lien on the property? That
would be the deal breaker. Or would md or charles county law prohibit liens
from being placed on jointly held properties?

I'm paying all cash so i dont' need any of his payments, and i dont' need all of the property
usage to myself either, so anything he would contribute would make the property that
much cheaper for me and I'd still get all the usage i need and he could benefit from it too.

Anyone know how the local laws are for joint property as investors instead of the marital type of joint ownership?
Click to expand...

can I be your friend? yeah....dumb idea
 
O

officeguy

Well-Known Member
Talk to an attorney. If you really want to do this, a trust or an LLC are probably going to be your best bet to insulate you from your partners business risk.
 
Larry Gude

Larry Gude

Strung Out
officeguy said:
Talk to an attorney. If you want to do this, a trust or an LLC are probably going to be your best bet to insulate you from your partners business risk.
Click to expand...

As well as establishing rights should there be a dissolution. Absent the LLC and the agreement, you could be stuck with a partner who wills his half to his cat or sells it to your ex wife. This would also protect both parties from other threats such as potential such as accident claims that have nothing to do with the property.

:buddies:
 
O

officeguy

Well-Known Member
Larry Gude said:
As well as establishing rights should there be a dissolution. Absent the LLC and the agreement, you could be stuck with a partner who wills his half to his cat or sells it to your ex wife. This would also protect both parties from other threats such as potential such as accident claims that have nothing to do with the property.

:buddies:
Click to expand...

And that of course.

Well, there is still the possibility of a charging order if the partner gets in trouble. But it only affects distributions from the LLC, not the property itself.
 
D

DannyMotorcycle

Active Member
tommyjo said:
Here's the real question...

What on Earth would possess you to come here and ask a question like that?!?! Do you really think you can trust any answer you get?

PT Barnum...proven right every freaking day of the year.
Click to expand...


What possesses me to ask a question here is that people here live in MD and may have actual experience and could share it? Would i bet my life on it? no.
would i read it with a healthy skepticism? yes. Would it be my only source? no. would it be a starting point? yes. Is it free? yes. Might it point me to the
proper direction? probably. Why you are _______ about it? I don't know.

Did i get good advice in "don't do it"? Yes. See. Good responses...and that's what would possess me to ask here.

Now... Has anyone set up an LLC or Corporation? costs? procedures? do it out of state? do in it md? recommendations?

not that i'm going to list him in it with any ownership, but to give myself personal security if anything should happen to the property and it becomes a liability..

like perhaps some forum member run around the property distraught after looking at his phone reading a post about asking a question and run into a tree and sue.


side note, i'd even be fine if i died and he took it over, we trust each other with important things.... but I'm not going to risk
his potential liabilities.. so yea, his name won't be on it anywhere.
 
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officeguy

Well-Known Member
The initial filing fee for a LLC is $100. Every year there is another iirc $150 to the state along with the LLCs property tax return. The LLC then pays personal property tax on all assets used for the business. To keep the protections of a LLC you need to run it as a company that is separate from you and your partner. Separate tax ID, separate bank account etc.

Just to own something jointly without it generating business activity (e.g. rental to third parties), a trust may be the better option as it has fewer tax implications and ongoing cost.

What kind of property are you talking about? A boat dock? Workshop?
 
LightRoasted

LightRoasted

If I may ...
If I may ...

There are three type of real estate joint property and concurrent ownership:

Tenancy in Common - (In part) - A co-tenant can transfer interest in a tenancy in common to another buyer or to an heir -- via a will, for example. A co-tenant can also mortgage a share in the property. What a co-tenant cannot do is transfer or sell the other co-tenants' interests in the property. Once a co-tenant's interest in a tenancy in common is transferred, the new owner steps into the shoes of the co-tenant seller and becomes a tenant in common with the other co-tenants.

Joint Tenancy - Joint tenancy is sometimes called "joint tenancy with right of survivorship." Historically, joint tenancy ownership implied that a joint tenant lost all interest in their property when they died. The deceased person's interest was automatically transferred to the other joint tenant. So, in a joint tenancy, the last surviving joint tenant owned all the property outright.

Tenancy by the Entirety - Is only available to a married couple who owns a piece of property together

You can, say with Tenancy in Common, within the Deed or other document, say that your co-owner must give you the right of first refusal to acquire the property if he wants to sell and to also be binding upon his heirs if he dies.

Also, if you really like the guy and are so inclined, do a life estate. In a life estate, two or more people each have an ownership interest in a property, but for different periods of time. The person holding the life estate -- the life tenant -- possesses the property during his or her life. The other owner -- the remainderman -- has a current ownership interest but cannot take possession until the death of the life estate holder. The life tenant has full control of the property during his or her lifetime and has the legal responsibility to maintain the property as well as the right to use it, rent it out, and make improvements to it. When the life tenant dies, the house will not go through probate, since at the life tenant's death the ownership will pass automatically to the holders of the remainder interest. The life tenant cannot sell or mortgage the property without the agreement of the remaindermen. If the property is sold, the proceeds are divided up between the life tenant and the remaindermen. The shares are determined based on the life tenant's age at the time -- the older the life tenant, the smaller his or her share and the larger the share of the remaindermen. The life tenant must still pay the mortgage; pay the property taxes and insurance; and make necessary repairs to the property.

I think setting up an LLC or other complicates things. Just food for thought.
 
B

BernieP

Resident PIA
PeoplesElbow said:
Aside from the legalities remember that when you mix friends and money you risk losing both.
Click to expand...

probably the best advice of all

I would only add, if you are questioning your friends solvency, you probably shouldn't be thinking of him as a partner.
There is a reason you've raised that question.
 
D

DannyMotorcycle

Active Member
officeguy said:
The initial filing fee for a LLC is $100. Every year there is another iirc $150 to the state along with the LLCs property tax return. The LLC then pays personal property tax on all assets used for the business. To keep the protections of a LLC you need to run it as a company that is separate from you and your partner. Separate tax ID, separate bank account etc.

Just to own something jointly without it generating business activity (e.g. rental to third parties), a trust may be the better option as it has fewer tax implications and ongoing cost.

What kind of property are you talking about? A boat dock? Workshop?
Click to expand...

workshop
 
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