Owning a home remains the American Dream.
And for many singles to achieve it, they are buying with another person who is not their spouse.
From a legal standpoint, this requires some extra legal preparation.
Frank conversation about mutual expectations, finances and debt and credit.
Reducing the terms of the arrangement to a written contract.
Some points to be covered:
- Do the co-owners have identical interests, equal interests, or unequal interests?
- What happens to the co-owner’s interest if that co-owner dies?
- What happens if one co-owner wants to sell that co-owner’s interest?
- What happens if the co-owners have a fight and cannot bear to occupy the house together anymore?
- How are the co-owners’ respective interests valued?
- What if one co-owner’s debts result in a lien on the property?
- How will the mortgage be paid?
- How will mandatory expenses of the property be paid (real estate taxes, probably homeowner’s insurance)?
- How will (semi)optional expenses of the property be paid (repairs, improvements)?
- How will a co-owner’s share of expenses be paid in the event of that co-owner’s death?
- Should each co-owner be required to maintain life insurance for the benfit of the other co-owner?
A little advance consideration and planning is crucial to a successful real estate joint venture outside marriage.