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legalgems, Arbitrator
Category: Real Estate Law
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Experience:  Just Answer consultant at Self employed
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A friend of mine and I want to buy a property together in Michigan.

Customer Question

A friend of mine and I want to buy a property together in Michigan. She is a Michigan resident and would live on the property, but I live in California and wouldn't live on the property. For the purchase of the property I will be supplying the bulk of the money and she would like to eventually buy my share of the property. We want to be sure we make our arrangement legal and binding for both of us. Please provide the steps we need to take to make this happen. Do we need a separate contract between us or just the contract on the property that we will purchase?
Submitted: 5 months ago.
Category: Real Estate Law
Expert:  legalgems replied 5 months ago.
The 2 most common ways to hold title to property in Michigan is Tenants in Common (TIC) and Joint Tenancy (JT). With a TIC, the parties can own unequal percentages,whereas with a JT, the interest must be 50/50. The main difference is that with a TIC, each owner can transfer their interest to anyone they wish, whereas with a JT, upon the death of one owner, the other owner inherits that property outright (even if a will or trust states otherwise). The JT is most commonly seen with married couples. It is important to have a separate contract between the parties, and it should cover many issues, such as:who is responsible for repairs (with a differentiation between repairs such as plumbing, etc due from every day wear and tear, and rehabilitative repairs such as replacing the roof)who is responsible for any prospective remodeling (ie if one party wishes to update the kitchen)who is responsible for maintaining insurance and taxes (it is important to have both owners named on the policy)if there is a mortgage, what the responsibility is for that, and if/when/how refinancing would be an option The contract should also state the parties' respective interest in the property, and how any appreciation will be handled (ie based on a pro rata share of one's down payment; or any appreciation is divided equally, or whatever arrangement there is). It is also a good idea to have an alternative dispute resolution procedure (mediation, arbitration) and a note as to which jurisdiction will apply to the contract (which state). Then, to ensure the agreement is binding, it is a good idea to have each party have an attorney review the agreement to be sure they understand it (their own attorney) that way one party cannot later assert undue influence, mistake, fraud, etc. Further questions? Please post here to continue the chat. Satisfied? Kindly rate positively so I receive credit for assisting you.(no additional charges are incurred). Information provided is for educational purposes only. Consultation with a personal attorney is always recommended so your particular facts may be considered. Thank you and take care.
Expert:  legalgems replied 5 months ago.
Thank you for using Just Answer.I hope the information provided was useful.Here is a link to the bar association's legal referral site: you have further questions please post here; otherwise kindly--- Rate Positively---so the site credits me for assisting you.Thank you and take care!