The Party Wall Agreement Isn't All Fun and Games
Before jumping into the purchase of a duplex, there are some legal issues that you'll want to consider. Many are unaware that duplex living is akin to living in a condo, and there are certain agreements that should jointly agreed upon, and on paper, before you sign the dotted line. Duplexes have become more and more popular as they are a great way to afford the luxuries of home ownership without becoming totally housebroke. Generally much more affordable than the average single family home of equivalent square footage, the duplex appeals especially to young families and to couples looking to get into the market. But like any "great deal" there's a flip side that should not be overlooked. To begin with, you're entering into ownership beside a neighbor, a very close neighbor in fact.
So close, is your neighbor that you'll share a wall that divides your respective homes. The part of duplex living and ownership that is similar to that of a condo, is the legally binding agreement called, "The Party Wall Agreement". No, this is not only there so you can mutually decide on who's having parties, and when. Although, it may delineate acceptable noise levels for your prospective parties. But, what it really is, is a sort of home association for a party of two.
The Party Wall agreement, will cover how the two sides of ownership will deal with shared expenses such as insurance, structural issues, including roof upkeep and replacement, foundation and shared utility service lines. It may also include routine maintenance and address stylistic and architectural issues such as the exterior look of the home, and the construction of other improvements such as fences and sheds. Consider that before purchasing a duplex you are entitled to peruse the already existing party agreement and to enter into negotiations to make amendments, if necessary. If this is the duplex owner's first time selling one half of the duplex, you might want to have, "negotiating a party-wall agreement" as one of your offer's subjects. Note that down the line, should one duplex owner break the rules, the other owner is technically protected by the agreement and can put a lien on the other's properties in order to collect funds, if need be. Of course, you can have the world's best legal documents, but if your uber close neighbor is a "not- so-nice" person, well then you're likely to have problems. This being said, just as in a condo development, if you can meet with you're fellow neighbor, and get a sense of who they are, and what kind of life they lead, it may give you more insight into whether or not you'll want to live close to them, and enter into a legal agreement with them. The flip side, is of course nothing but the agreement can really protect you. Seemingly great people, can turn out to be terrible neighbors. Not to be a kill joy here, but if you're considering purchasing a duplex, keep in mind the true dual nature of ownership you're entering into.
It can be a wonderful investment so long as you collectively set the appropriate rules to make it so.