Are you one of the 17 million unmarried couples living together, according to the United States Census Bureau? Are you considering making a move to buy a home together before you head down to the altar? If so, this article is for you! According to https://www.bankrate.com/, unmarried couples made up 9% of homebuyers in 2020. That number is growing every year, with more and more couples looking to solidify their relationship in ways other than with wedding bands. When considering buying a home with your partner, not your spouse, a different set of rules and questions apply to the process – how so?
Laws for Unmarried Joint Property Owners
If you and your partner live together long enough in some states, your relationship can be classified as “common law marriage” what does that mean? According to one state, the definition for common law marriage is as follows:
A common law marriage is a legally recognized marriage between two people who have not purchased a marriage license or had their marriage solemnized by a ceremony.
Common-law marriage is recognized in Colorado, DC, Iowa, Kansas, Montana, New Hampshire, Texas, and Utah. In the case of Texas this is what they have to say about the property that belongs to common law married couples.
“Under Texas law, all property acquired during a marriage (formal or common law) is community property. If a common-law marriage is proved, community property is divided the same as if the parties were formally married. … If no common law marriage is proved, there is no marital property or debts to divide.”
If you do not live in a common-law marriage state, consider what will happen if you and your partner part ways and your rights to the property you purchased together.
Who Will Pay the Bills?
Do you have a joint bank account? Does one partner make a significant amount of money while the other does not? Who is more responsible when it comes to paying bills on time? These questions and more should all be considered when working on figuring out the financial logistics of owning a home together. You will want to lay out an agreement on how you and your partner will pay for routine home expenses such as property taxes, water bills, electricity, and unexpected repairs. There is no right or wrong way to divide the costs as every situation and relationship are different – keep this in mind when discussing the topic with your partner.
What Happens if One Partner Dies?
When you are married and live in a state with laws of intestate succession and your deceased partner has no will or children, the courts will deem you, the survivor, the property owner. It is important to note that this is not always a guarantee, so planning for such events as uncomfortable as the conversion is essential.
A few ways to avoid this are for you and your partner to both have a clear will stating what you want done with your property after your passing or to make sure that the title you have for the home would allow you to own the house after the death of your partner. Tenancy in common and joint tenancy with rights of survivorship will effectively manage a situation where homeowners are partners but unmarried. Tenancy in common – each person owns a percentage of the house, and if they die, their interest in the property goes to their estate, which could be you or their child. Joint tenancy with rights of survivorship dictates that if one person dies, the survivor inherits their share of the property.
What Else Should You Consider?
Here are a few more questions you and your partner should discuss.
- Will you both contribute equal amounts to the down payment and closing costs?
- If you sell the property, will the proceeds be split 50/50?
- If you break up, will you allow the other partner to buy you out of the home?
- How will you split HOA fees, taxes, and repair costs?
The Bottom Line
Buying a home is a huge step in your life, just like getting married. Just make sure that this is the right move for you, your relationship, and your finances, and know that because you are not married to your partner that if you are to break up, it could complicate the sale of the home and how proceeds are divided. The best thing you can do is ask all the hard questions ahead of time and plan for the unthinkable.
From Renting to Homeownership in Texas
Renting in Texas can be difficult, but so can start searching for a new home. With Beyond 404 Realty, Anthoney Hanks helps families and individuals in the Dallas-Fort Worth community find their dream home. Anthony specializes in working with first-time homebuyers in Texas and those looking to purchase investment properties in Texas. Anthoney will teach you how to become a homeowner, stop renting, and start buying! Visit www.beyond404realty.com for more information or visit our YouTube page for short videos on starting the home buying process at https://www.youtube.com/channel/UCmzTlxpC6-nJWXsphoqhPZw We can’t wait to work with you.
