A common trend among millennials looking to purchase their first property is buying that property with a friend. Millennials, compared to other generations, wait longer before getting married, so it is becoming more common for them to buy their first property with their friends instead. This allows buyers to purchase either a larger apartment, qualify for a mortgage, or pay the down payment; and owning property has an array of benefits that young buyers want to take advantage of. However, can two friends purchase a co-op in New York?

Co-ops have a reputation for their strict vetting process as they want to ensure that future buyers will be the ones who occupy the unit and that they are able to pay the maintenance fees. Legally, a co-op board may not discriminate based on marital status and the proprietary lease will not prohibit friends from co-owning a co-op. Before marriage equality, it was common for couples who were not married to purchase a co-op in this manner, which has since set a precedent for non-married couples or friends to co-own co-ops. Co-op boards may, however, preclude shareholders from renting a room in an apartment, so it is important that buyers are certain they can live together first.

When friends purchase a co-op together, they create a tenancy-at-common agreement. This means that each shareholder holds an individual an undivided ownership in the property that they can transfer in the event one owner wanted to sell or passed away.  This agreement would govern other aspects of the ownership as well, such as tax benefit distributions.

When friends purchase property together, it is imperative that they are transparent about their finances and intentions. The buyers do not need to invest equal amounts, but this will impact the percentage each shareholder owns. In addition to paying the down payment, which is typically around 20 percent of the purchase price, co-ops will also require prospective shareholders to have enough funds to pay two years of the maintenance fees and mortgage payments. However, they may also take into account high salaries if the buyers do not have these assets. Buyers will also need to be prepared to pay for the closing costs, which can be up to 3 percent of the purchase price.

Before purchasing a co-op with a friend it is essentially both parties are clear about the costs involved, are transparent about their finances with each other, and most importantly have a genuine intent to live together.