Legal Insights Q&A with Kevin Coutant and Lauren Brown
Home Buying Legal Considerations for Unmarried Couples
Q: What should I think about if I am planning to buy a house with my significant other, even though we aren’t married?
A: There are key things to consider in this situation. For instance, what happens to the property if one of you dies or one of you is unable to pay for his or her fair share of the expenses? What happens if one party decides to split? Who is entitled to the equity and personal property in the home? What happens if one party puts more money into the down payment? You and your significant other can address these questions and similar issues in a Property Agreement, which should be in place before you purchase a house. This will help resolve problems that may arise later.
Q: Does it matter how the Deed is titled?
A: Yes. A few simple words can dramatically change the ownership of the property. How the Deed is titled affects the rights and obligations of that ownership, which ultimately impacts how the property can be sold or assigned, or who owns the property if one person dies. There are many things to consider, so it’s important for couples to consult with an attorney and understand how their property interests could be titled to help decide which option is best for them.
Q: What happens if my partner and I break up or someone stops paying their share of the mortgage?
A: There can be severe consequences if one party decides to split or stop paying their "share" of the mortgage. Many mortgages are written so each person is jointly and severally liable for 100% of the mortgage debt, even if one party stops making payments. To make matters worse, even if you have paid more in mortgage payments or more on the down payment, you will likely receive only half of the net sales proceeds when the house is sold, unless you have a Property Agreement providing otherwise. A Property Agreement is the best legal tool you can use to protect yourself and minimize litigation.