Protecting Your Interests
According to the National Association of Realtors®, 25% of primary home buyers are single. Some of these non-married buyers, statistics show, buy homes jointly with other non-married buyers such as boyfriends, girlfriends or partners. If you’re a non-married, joint home buyer, before signing at your closing, you’ll want to protect your interests. Different from married home buyers, non-married buyers get almost no estate-planning protection on the state or federal level which can be, at minimum, an inconvenience and, at worst, result in foreclosure. Thus, the process should start with an experienced real estate attorney to draft the following two documents:
- Cohabitation Agreement
- Property Agreement
The Cohabitation Agreement is a document which describes each person’s financial obligation to the home. It should include details on which party is responsible for payment of the mortgage, real estate taxes and insurance; the downpayment made on the home; and necessary repairs. It will also describe the disposition of the home in the event of a break-up or death of one party which, unfortunately, can happen. The second document, the Property Agreement, describes the physical property which you may accumulate while living together, and its disposition if one or both parties decide to move out. A well-drafted Property Agreement will address furniture and appliances, plus other items brought into the joint household, and any items accumulated during the period of co-habitation.
Source: The Mortgage Reports