Protecting Investments when Buying a Home Jointly While Unmarried
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By
Alpert Law
Couples in committed relationships frequently choose to cohabitate. People who have dated for years and those engaged to be married, as well as married couples, often decide that sharing a home is more cost-effective than renting separate homes. They may also believe that buying is a better option than continuing to rent. Mortgage costs can be lower than rent in competitive markets. Additionally, people who buy can gradually accrue equity, which can contribute substantially to their personal wealth. Married couples have automatic legal protection when they purchase real property during the marital relationship. However, unmarried romantic partners do not have the same degree of protection. As such, they may need to take an extra step as they move forward with the home-buying process to protect themselves in case their relationship changes in the future. Cohabitation agreements are mutually beneficial Investing in real property is a major commitment. Owners often have to make 30 years of mortgage payments. They must invest in maintenance and repairs to keep the property in habitable condition. Those investments could be at risk when a romantic relationship ends. Particularly if the couple agrees to only have one person on the mortgage or the title for the property, clarifying ownership interests and responsibilities in advance is of the utmost importance. Cohabitation agreements can address everything from the equity obtained with a down payment to the personal responsibilities of each party related to unusual repairs and maintenance costs. People can also clarify how they intend to divide equity or address possession of the property when the relationship ends. For example, they may agree to allow a grace period where they continue living together until the party leaving the property locates new housing and the party staying refinances to withdraw equity. Cohabitation agreements can prevent conflicts about the property and the obligations of the partners from damaging the relationship. They can also help people protect themselves legally and financially should the relationship end while they still have joint ownership of the property. Discussing the need for a written contract with a skilled legal team can protect people hoping to buy real property with a romantic partner whom they have not yet married. Cohabitation agreements can strengthen relationships by limiting ownership-related conflicts and protect people’s real property investments if they ever face disputes with their co-owners.
