Equity Share Agreement
About this form
The Equity Share Agreement is a legally binding contract that outlines the terms between two parties who wish to invest in a residential property together. This form enables individuals to share the equity in a property, allowing one party to occupy the home while the other benefits from investment returns. Unlike traditional ownership, this agreement establishes the rights and responsibilities of both parties regarding financial contributions, property management, and profit sharing upon sale.
What’s included in this form
- Identification of parties: Names and contact information of the investor and the owner-occupier.
- Property details: Legal description and location of the property being purchased.
- Financial terms: Purchase price, down payment contributions, and loan details.
- Occupancy rights: Specifies who resides in the property and their responsibilities.
- Distribution of proceeds: How profits from the property's sale will be shared.
- Governing laws: Jurisdiction that governs the agreement.
When to use this form
You should use an Equity Share Agreement when two parties want to co-invest in a property but cannot afford to either buy outright or secure a mortgage independently. This is particularly useful for an individual who wishes to occupy a home but lacks the full financial resources to do so and for an investor looking to gain from property value appreciation while providing housing for another party.
Who needs this form
- Individuals seeking to co-purchase a home through an equity-sharing arrangement.
- Investors looking to provide financial support to someone wanting to buy a property.
- Homeowners wishing to enter into a partnership for property investment.
Completing this form step by step
- Identify the parties involved by entering their names and addresses.
- Specify the property details, including its address and legal description.
- Outline the financial terms, such as the purchase price and down payment contributions.
- Define the occupancy rights and responsibilities of each party.
- Detail how proceeds will be distributed upon the sale of the property.
Is notarization required?
Notarization is required for this form to take effect. Our online notarization service, powered by Notarize, lets you verify and sign documents remotely through an encrypted video session, available 24/7.
Common mistakes to avoid
- Failing to accurately describe the property and its legal details.
- Neglecting to outline financial responsibilities clearly between parties.
- Not including necessary terms about property maintenance and occupancy.
Why complete this form online
- Convenience of instant download for immediate use.
- Editability allows you to customize the agreement according to specific needs.
- Reliability of forms drafted by licensed attorneys ensures legal compliance.
Form popularity
FAQ
A shared equity agreement enables a home buyer or homeowner to share home equity in exchange for a one-time cash payment from an investor. Such agreements allow you to liquidate part of your equity for cash or a down payment. The homeowner doesn't pay off the investor with monthly payments or interest.
A shared equity mortgage is an arrangement under which a lender and a borrower share ownership of a property. The borrower must occupy the property. When the property sells, the allocation of equity goes to each party according to their equity contribution. Each party also shares losses on the sold property.
Equity sharing sounds like a simple form of shared ownership. Investor and occupier each contribute to the down payment, occupier lives in the home, keeps it up, and makes the monthly payments, and the parties share the home appreciation.
Help to Buy is a government backed scheme, and the Help to Buy equity loan enables purchasers to buy a new build home with the help of an equity loan, also known as shared equity.
