How to Take Title When Buying With Friends
When buying a house with a friend, it's important to choose a joint tenancy title that protects you from the unforeseen. Here are your best options.
For the most part, you'll want to take title as tenants-in-common (TIC) when you own a home with one or more friends. Your only other option is to own it as Joint Tenants, which would prevent you from bequeathing your ownership interests to your own children, family members or other heirs. Remember that in Joint Tenancy, the surviving joint tenant automatically receives the interest of her co-owner when the co-owner passes away.
If you hope to maintain a long-term friendship or co-owner relationship with your buddy, you should take extra special care to negotiate a detailed TIC Agreement which addresses all of the issues you've discussed. If you are buying a single family home with a friend and taking title as Tenants in Common, ask your attorney to pay special attention to the provisions for sale of an ownership interest -- you definitely want the right of first refusal before your co-owner(s) can sell their interests and the right to approve of any prospective purchasers, so that you aren't forced to live with a stranger without any advance veto power. Talking out the tough issues up front, and evidencing your agreements in writing, can be essential to avoiding and resolving disputes years down the road.