Is dual occupancy right for you?

The rising cost of living coupled with a shortage in affordable housing options has left many South Africans seeking out alternative solutions to make homeownership more affordable.

An increasing trend is the dual-occupancy route, where homeowners either rent out a portion of their property or choose to co-own a property with a friend or family member.

Before going this route, Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, strongly advises homeowners to carefully consider whether dual occupancy is the correct move for them, as these will become legally binding agreements that are tricky to get out of if a homeowner suddenly realises that this is not what they want.

Before signing a dual occupancy agreement, consider the following

Understand all legal liabilities

Before going ahead with a tenancy or a co-ownership, make sure that you fully understand all the legal consequences of the agreement. For example, as a landlord, you will have to pay for repairs if anything breaks within the tenanted spaces, and you will also need to accept the risk of potentially having to deal with a defaulting tenant. As a co-owner of a property, you will still be liable for the loan repayments even if the person with whom you co-signed fails to make their portion of the payment.

Understand the cancellation policy

Nobody ever enters into an agreement with somebody expecting that they might need an early out. However, it is prudent to be prepared for any eventuality – which includes understanding what process to follow should either party want to end the dual occupancy early. A lease agreement will clearly outline the procedures around terminating the lease – if not, ask your rental agent for advice. Co-ownership, however, is a lot more costly and complicated to get out of. Either you both would need to agree to sell, or the one owner would need to gain full ownership of the property by buying out their partner. In these cases, it would be best to seek professional legal advice from a transferring attorney.

Consider your long-term plans

Because these agreements are legally binding, it is important to consider your future plans before making a final decision, as these agreements cannot be instantly undone. If you are letting out a portion of your home, consider whether you might need that space within the near future, either for a growing family or possibly for aging parents. If you are co-owning with a friend, consider how both your lives might change in the mid- to near-future – if you’re both single, what would happen if either of you got married or had children?

Lay down the rules

The quickest way to sour any dual occupancy relationship is when there are no rules and guidelines in place to govern how you will both co-exist on the property. Even when you co-own the space, it is important to have a set a written rules that can be referred to whenever a dispute arises. A tenancy agreement might include certain rules like no pets and no smoking, and so too should your agreement with whomever you choose to co-own the property.

“If any sort of dual occupancy agreement is not the right fit for you, then speak to a real estate agent who can keep an eye out for affordable opportunities that could better suit your lifestyle and your budget. Real estate agents are often privy to new listings before they hit the market and could let you know about the home before it is snatched up by other buyers,” says Goslett.

In an article publishes in 2019, Craig Mott, Cape Town Regional Sales Manager for the Rawson Property Group, touched on multi-generational homes.

“That’s not to say living with your parents or grandparents as an adult is without challenges of its own – particularly if you’ve grown used to having your own space and are new to a communal living environment.”

According to Mott, there are ways to make the transition (and general experience) much easier for everyone involved:

1. Plan your space

A single family home and a multi-generational home should ideally look quite different, since each generation really needs a space of their own in which to enjoy some solitude and privacy. Of course, not everyone is lucky enough to have a convenient granny flat to provide easy separation when necessary, but a few minor renovations can be just as effective in a crunch.

Mott highly recommends adding a small kitchenette and en-suite bathroom to a second bedroom or living space if possible. This gives the elderly or young professionals living with their parents the ability to do most daily activities without having to join in with the main house if they don’t want to.

Done well, it can also add value to your home when you decide to sell.

Garages are often the focus of renovations for creating a secondary living space, but be cautious to have plans approved and not to do any revamps that will affect the sale price of your property down the line.

“The ability to take time out in your own space is essential. A little bit of autonomy goes a long way towards creating a peaceful and happy multi-generational home,” he says.

Homeowners need to take the physical challenges of old age into account when planning a multi-generational layout.

It’s always a good idea to give elderly family members ground floor living spaces with no stairs or potential tripping hazards. Depending on their level of health and activity, you may also want to keep them close enough to hear them call for help if they need a hand.

2. Lay out the ground rules

One of the biggest benefits of multi-generational living is that all residents can contribute to the household. According to Mott, those contributions don’t always have to be financial, but should be planned and agreed to in advance.

“Unemployment and other financial difficulties are often the reasons kids move in with their parents or vice versa,” he says.

“That means it’s not always possible for everyone to share expenses like food and rent equally. Make sure you discuss finances upfront, as well as other household contributions like cooking, cleaning and childcare, and make sure everyone is happy that they’re doing their fair share to add value to the home environment.”

3. Have a plan in place for conflict resolution

Human nature means no home is ever entirely without conflict, and having family members from various generations under one roof means disagreements are bound to arise. Having a plan in place for handling these situations when they happen is important not only for keeping peace in the home, but also making sure everyone feels like their concerns and opinions are being heard.

How you decide to handle conflict may depend on the living arrangements that you have. If everyone is sharing household responsibilities equally, then it may be appropriate to vote on all major decisions. If one generation is footing the entire bill for the home and all its occupants, on the other hand, they may want the final say.