The Huffington Post recently ran an article “Read This Before You Buy a House With Someone You’re Not Married To,” and I would agree with many of the statements made in the article. It is important to note that engaged couples and couples cohabitating without being married risk not having the protections afforded by California’s Family Code. In many of these situations, if you own a home with someone you are not legally married to and you break up, California law essentially views you and your partner as “business partners.”
In these situations, it is important for there to be a written agreement setting forth what would happen if you need to sell the house prior to any marriage. Further, it is also important to note that in addition to a written agreement, some estate planning may be necessary.
There are generally two types of ownership for cohabitating couples: tenancy in common or joint tenancy. The following is a very general overview of the differences between holding real estate as tenants in common or joint tenants. If you own real estate with someone as “tenants in common” and one partner dies, that person’s estate must go into probate if that person did not put the property into a revocable living trust. If you own real estate with someone as “joint tenants,” upon the death one person, the other surviving owner acquires the entire property.
Often times, when a couple breaks up, one person leaves the jointly owned home, and does not think about selling it for a while. This can lead to issues in the future as your name could still be on the mortgage and you still have liability as a joint owner. Therefore, it is important not to sit on any rights upon breaking up.
Prior to closing escrow on real estate, you should contact a local attorney to discuss possible estate planning and/or a written agreement regarding the ownership of real estate. Call Attorney Anthony Marinaccio at 818-839-5220 to set up a free initial consultation.