The Lawyer’s Desk: By Tracey Daniels O’Connell, Esq.
Real estate can drive relationships, for better or for worse, especially in New York, with its high cost of living and even higher cost of real estate. An annual survey released by the National Association of Realtors showed that 65 percent of homes purchased in 2014 were bought by unmarried couples. When it comes to property ownership, the rights of married couples are clearly defined. For couples deciding whether or not to buy before they decide whether or not to tie the knot, home ownership presents certain unique issues.
Planning for the “What ifs” – Co-Ownership Agreements
A co-ownership agreement can address issues regarding each party’s obligations not only during the relationship, but in also in the event that the relationship doesn’t last. The agreement will dictate some of the specifics that could become misconstrued later. Answers to these questions, included in a written co-ownership agreement, will clarify rights and obligations now and reduce or even avoid conflict down the road.
- How will expenses be allocated?
- If we break up how will the property be divided?
- How will the proceeds from the sale of the house be distributed?
- What happens if one of us passes away?
- Who will live in the house if we separate?
- How should we take title? Under New York State law, unless the deed specifically states otherwise, a husband and wife are considered “tenants by the entirety” when they buy property. That ensures, among other things, that the property will automatically transfer to the surviving spouse if one person dies. Unmarried couples cannot hold title as “tenants by the entirety” but can instead hold title in the name of only one party or as joint tenants, or as tenants in common. The decision on how to take title will effect certain terms of your co-ownership agreement, most notably, what happens when one owner dies.
There is no one way to prepare for all of life’s unknowns, but a well thought out agreement between unmarried parties purchasing property together can reduce uncertainty and as well as expenses by clarifying the intent of the parties.
This article is written by a member of the Oxman Law Group, PLLC (www.oxmanlaw.com). Any comments or inquiries are welcome and can be directed to Marc Oxman at 914-422-3900 or moxman@oxmanlaw.com.
