What Is an Equity Sharing Agreement?
An equity sharing agreement is a contract between two or more parties to share ownership, expenses, and appreciation in real property. These agreements allow parties to pool resources and share the benefits and risks of property ownership in Florida.
Common Structures
- Investor/occupier: One party provides the down payment; the other lives in the property and pays monthly expenses
- Family sharing: Parents help children purchase a home by contributing the down payment in exchange for an equity share
- Co-investment: Two or more investors purchase property together and share costs and appreciation
Key Agreement Terms
- Each party's initial contribution (down payment, closing costs)
- Monthly expense allocation (mortgage, taxes, insurance, maintenance)
- Equity sharing percentages for appreciation and depreciation
- Duration of the agreement and buyout provisions
- Decision-making authority for property management and improvements
- Exit strategy (sale, buyout price formula, right of first refusal)
Legal Considerations
- Entity formation: An LLC or tenancy-in-common agreement may be appropriate
- Tax planning: Interest deductions and capital gains must be allocated correctly
- Homestead: Florida homestead protections may be affected by the ownership structure
- Exit disputes: Clear buyout provisions prevent costly litigation
Related Terms
- Equity — The ownership interest being shared
- Contract — The binding agreement governing the arrangement
- Encumbrance — Mortgages and liens affecting shared property
Barnes Walker Real Estate
Barnes Walker's attorneys draft and review equity sharing agreements for Florida property arrangements, protecting all parties' interests. Request a legal inquiry for assistance.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC