Credit Michele Loughrey, Attorney
No one goes into a home buying process expecting things to go south.
Then again, no one goes into a relationship expecting things to go south.
Life happens. Break-ups are hard enough—throw in co-owned property, and things can get really ugly.
If you are considering buying a property with your boyfriend or girlfriend (or friend, or roommate, or brother, or random stranger), it’s important to protect yourself by: a) selecting an appropriate title arrangement for your situation, and b) signing a formal agreement laying out expectations.
And what if it’s too late, and you’re already in a nasty situation? You’re not alone. Real estate title drama is common, and with the right help, you can turn lemons into lemonade.
Here are a few things to know about property titles:
For starters, there are two ways to co-own property:
- Joint Tenancy. Joint tenancy is when you own property with another person (or persons) and you all have equal ownership to the entire property. If one of you dies, your rights to the property automatically pass to the surviving owner(s).
- Tenants in Common. Tenants in common is when you and another person (or persons) hold a share in a property. This can be equal (e.g. 50/50) or unequal (e.g. one person owns 2/3 and one person owns 1/3). When one of you dies, that person’s share does not automatically pass to the surviving owner(s). Instead, it goes to the deceased owner’s estate, and likely, probate.
At a basic level, it makes sense for married spouses to be joint tenants. It would be a bummer if you passed away and your surviving spouse had to go through probate in order to claim your share of the property.
But if you’re not married, tenancy in common is often preferable—especially if one of you will be contributing more than their share to the mortgage during the ownership period. In the case of joint tenancy, your half of the property can’t go to your heirs. With an appropriate agreement, tenancy in common can make both parties feel protected without the awkwardness. It can also avoid a costly partition action, a lawsuit whereby a judge determines who gets the property—or orders that the property be sold and the proceeds divided.
(Note: If you buy a property with a significant other as tenants in common and later get married, you can always execute a “quit claim deed” to become joint tenants.)
Every situation is different—and at Johnson/Turner Legal, we’ve seen it all. A qualified attorney can help you sort out the mess and get out of your ownership stake. And if you’re being proactive and coming to us before you buy, we can craft an agreement and set up a title that protects your interests.
We can’t fix your relationship. But we can serve as advisers and advocates to help shield you from the fallout and let you make an informed decision.