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Surviving Splitsville, USA

Over the years, I’ve had many calls from men and women who were formerly part of unmarried couples owning houses together.  The caller wants his or her name off the deed and the mortgage…the caller wants the one still in the house to sell it and split the profit… the caller wants to buy another house but can’t get financing for a second house… the caller wants to throw out the new girlfriend or boyfriend that has now moved in…  Sadly, there’s very little joy in Splitsville.

In a rising market, where refinance money flows like water and profits are realized as soon as the ink dries on the deed, there’s usually no problem selling the house or having one ex buy out the other.  But when houses are abundant, buyers are few, and mortgage lenders only want to lend to those who don’t need to borrow, the wishes of the exes to be done with each other are hard to grant.



If  a couple contemplating such a joint investment asks me before they buy what to do, I advise them to have a partnership agreement that spells out all the what ifs they can think of, such as what shall be done if the relationship sours; who would move out; what the deadline would be to sell or refinance; who would pay for repairs, taxes, mortgage payments; who else could live in the house until it is in one name only or sold; how a sales or buy-out price would be determined; and if a party that breaches the agreement will have to pay the other’s costs and expenses in a lawsuit.

But if the couple in “so in love” that such an agreement is “unnecessary,” I send them a letter detailing all those unromantic things that may cause additional agita after their happy hacienda becomes the house of blues. I don’t wish for any couple to split up; I just want to assure them that if they do, having a plan already in place means that they’ll be able to from Splitsville to Blissville a lot faster.

Photo by Daquella manera


( 2 comments — Leave a comment )
Nov. 18th, 2010 09:51 pm (UTC)
Very good advice
If you don't treat the house like a business partnership, it gets very expensive to have a judge decide what to do. In the meantime, the toilet overflows and the roof leaks, while you both ignore the problem.
Nov. 19th, 2010 03:00 am (UTC)
Re: Very good advice
Thanks for your comment... it sounds like first hand experience.
( 2 comments — Leave a comment )



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