Question from Sioban updated on 22nd November 2012:
I own a house (and have done so for more than seven years) with my brother who lives in London). He got married last year and would like to use part of the equity in the house to purchase another property for him and his wife. I initially agreed if we could do so without me being liable for either our current property or any future property, however it doesn't seem this is possible to do this? So I was wondering if it would be possible for him to use the equity in the property to buy me out? The house was bought for $260,000 and has been given a QV of $405,000 (Manukau) I did suggest he buy me out last year, but he doesn't think he can't afford it. I would rather sell and go our separate ways to be able to do our own thing, but again, my brother doesn't want to do that. Is there any way I can force any of the above? I.e. Use the equity to buy me out -buy me out -sell and go our separate ways?
Our expert Kris Pedersen responded:
There are ways to do this by using a particular trust structure however that is definitely a question for an accountant or solicitor who specialises in such things and not for me to advise on. I would still recommend having this chat and find someone who can advise you in regards to this. Besides going down this route your brother sounds like he is trying to get all of the benefit and on the surface you are the one who gets no additional benefit but are taking on risk. Simply put at the moment, without you agreeing he can't obtain additional funds so I would probably recommend to stick to your guns and say that if he wants to proceed that he has to pick one option or the other.
Kris Pedersen of Kris Pedersen Mortgages is a commentator on property and finance. His team sources top finance strategies. www.krispedersen.co.nz