As a real estate investor, you may come across the term “deferred payment agreement tenants in common.” This type of agreement is often used when multiple individuals co-own a piece of property, and one or more parties cannot immediately pay their share of the purchase price.
In a deferred payment agreement tenants in common, each co-owner owns a specific percentage of the property. This percentage is usually based on each person`s contribution to the purchase price. For example, if three people buy a property for $300,000, and one person puts in $100,000, while the other two put in $50,000 each, the first person would own 33.3% of the property, while the other two would each own 16.7%.
When one or more co-owners cannot pay their share of the purchase price, a deferred payment agreement allows them to defer their payment until a later time. This can be an attractive option for investors who want to buy property together but do not have enough capital to make the full payment upfront.
Under a deferred payment agreement tenants in common, the co-owner who cannot pay his or her share of the purchase price would owe the other co-owners a debt. The debt can be repaid at a later date, often with interest. This allows the co-owner to defer the payment until they have the necessary funds.
It`s important to note that a deferred payment agreement tenants in common is a legal document, and it should be drafted by an attorney. The agreement should include specific terms and conditions, such as the interest rate, the repayment period, and any penalties for defaulting on the repayment plan.
In summary, a deferred payment agreement tenants in common can be a useful tool for real estate investors who want to co-own a property but cannot make the full payment upfront. This agreement allows co-owners to defer payments until they have the necessary funds, and it can be an effective way to structure a real estate investment. As with any legal document, it`s important to consult with an attorney to ensure that the agreement is properly drafted and enforceable.