Q: I have been in a home with a partner for a few years. I have paid all of the mortgage payments, all of the property taxes, and all water and sewer bills. I also put an 18’x25’ addition onto this home with a new roof and all new windows and a stamped concrete drive way.
My partner has got herself in debt for $175,000. This amount does not include the first mortgage on the home. I am not a cosigner for her debts and I didn’t get anything out of all the stuff she charged. She is now claiming that we should use the proceeds from the sale of the house to pay off her debt and then split what is left.
Since I don’t owe any of these debts, and since I have paid for this property on my own, do I have to do this? Please advise.
A: The real question you need to focus on is what is your financial arrangement with this woman? Is she on the title to the property? If so, is she supposed to share in the expenses of the property? Are these arrangements written down anywhere?
If she is on the title to the property and if she is supposed to share in the expenses as well as the profits, then you should agree to her request to share in the profits – once her unpaid share of the expenses has been deducted.
So, tally up what you have spent for the mortgage, maintenance, upkeep and renovation of the property and divide that number in two. Present your partner with a copy of the bill. Once you sell the property, deduct her share from the net proceeds and split whatever remains. Fair is fair.
If, however, her name is not on title or the mortgage, you may still have an obligation to share the revenue with your partner.
Those states that recognize common law marriages and that recognize same sex marriages would allow each person in the relationship to claim ownership of the property. In your case, the home could be considered owned by both of you and upon the sale of the home, both of you would share in the expenses of the home, and any profit from its sale.
While this issue may not apply to you and may not apply to the state you are in, the issue will become more prevalent in states where common law marriages are recognized. This issue will also become more prevalent in states that are starting to recognize marriages (whether formal or common law) between same sex couples.
Please talk to a real estate attorney to make sure you’re not missing anything. And, be glad that you are not a co-signer to her debts.
April 16, 2009