New York Real Estate Lawyers Blog
Today is Valentine’s Day, and our firm extends best wishes to all the happy couples celebrating. However, an unfortunate truth is that sometimes couples, whether they are man and woman, or of the same sex, will discover differences and break up. When such a couple is legally married, they usually would consult a divorce attorney to negotiate the terms of the divorce and a fair division of their jointly-owned property.
However, what happens when a couple are not married? Marriage as an institution is in decline, and many couples stay together for years, even decades, have children together, purchase property together, but never take the legal step of getting married. In such situations, how is their property to be divided once they decide to break up? They cannot bring a divorce action in Supreme Court, as divorces are only available to married couples.
As this blog deals with real property issues, we will discuss the legal issues of how an unmarried couple can divide jointly owned real estate. Of course, the parties should negotiate, using experienced attorneys to represent their interests. It is possible that one party wishes to retain the real property in question, and has sufficient funds to buy out the other person. In such a case, a buyout price must be agreed upon. The individual retaining the property must have sufficient funds to purchase the one-half interest of the other party. Possibly the funds will need to borrowed through a mortgage on the property. There may also be an existing mortgage on the property that needs to be satisfied.
In such a case, the individual who is keeping the property must qualify for a new mortgage, with sufficient funds to pay off the existing mortgage. Funds from the refinancing will also be used to buy out the one-half interest of the co-owner.
It is possible that neither party has the funds or favorable credit history to purchase the other’s interest. As a result, the parties can also agree to sell the property to a third party, and agree to split the proceeds from such a sale equally.
If no agreement can be reached, either party may bring a partition lawsuit against the other co-owner. A partition lawsuit results in a Court-ordered sale of the premises, with the proceeds divided between the co-owners. Each party is given the opportunity to provide evidence showing their contributions towards the purchase and upkeep of the property. For example, if one party provides the entire downpayment for the purchase (usually about ten percent of the purchase price), he can seek credit for such contribution in a partition suit. Likewise, if the other party has made all the mortgage payments for a long period of time, she can seek credit for these payments when the sale proceeds are divided.
Our firm understands that couples may break up, even after celebrating Valentine’s Day. We have extensive experience in negotiating resolutions of situations involving jointly-owned property, as well as bringing partition suits in the event a resolution cannot be reached without litigation.