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Cohabitation and the Purchase of a Home

4.02.20 Posted By Alison Anders Uncategorized

Cohabitation in the U.S. is on the rise. According to the National Center for Family and Marriage Research, the number of middle-aged Americans cohabiting has doubled in the past 25 years. In fact, among those ages 18-24, cohabitation is now more prevalent than living with a spouse. Thus, it should come as no surprise that an increasing number of cohabitants are jointly purchasing residences.

Interestingly, statistics demonstrate that cohabiting couples have a separation rate five times that of married couples. What most unmarried co-owners do not know is that it can be complicated to divide property interests upon uncoupling. Because ordinary community property laws are inapplicable, non-spouse couples are forced to bring suit in civil court if agreements cannot be reached regarding the division of their residence.

Luckily, you can avoid a contentious Chandler family lawsuit by entering into a legally binding agreement regarding the residence. In drafting these contracts for clients, we address:

  • Whether one party contributed a greater share to the purchase price and, if so, if/how they should be reimbursed upon uncoupling.

  • How mortgage payments, HOA dues, insurance, taxes, and other associated costs should be shared during cohabitation.

  • What will occur in the event of uncoupling, including whether the residence should be sold or awarded to one party, timing of sale or either party vacating the residence, how equalization of equity and repayment should be addressed, timing and other refinance requirements if applicable, and what will occur in the event of other disputes over the residence.

  • Any other unique circumstances

The benefits of executing a contract far outweigh any associated costs. If you’ve read previous articles, I’m a believer in defining certainty for yourself and your partner. Not only does this promote healthy boundaries in relationships, but it also serves to avoid months, maybe even years, of financial and emotional strain during litigation.