On behalf of Cooper & Tanis, P.C. posted in divorce on Tuesday, September 20, 2016.
The purchase of a home represents an exciting time for an unmarried couple in Colorado, but, if the relationship sours, legal questions about ownership could get thorny. Marriage provides couples with specific legal terms when they jointly buy property, but it is recommended that cohabiting couples draft written agreements that spell out how the property will be divided or paid for if the parties go separate ways.
A real estate broker believes that the purchase needs to be viewed as a business transaction. The couple could create a cohabitation agreement that addresses their assets during the relationship and potentially after its demise. A cohabitation agreement resembles a prenuptial agreement except that a formal marriage does not activate its terms. For a couple buying a home, the agreement could designate who pays for the mortgage, insurance and property upkeep or what percentage each party contributes to these necessities.
The agreement could also address the treatment of assets if the relationship ends. The people could establish what would be done if they wish to sell the home or if one person wants to keep the property. Without terms written into a contract, one party could potentially walk away from the mortgage and then the other person could be entirely responsible for the loan. Upon the sale of the home, the person who walked away might still be entitled to a portion of proceeds.
A person whose unmarried relationship ends might choose to obtain legal advice if the couple commingled finances and purchased property jointly. An attorney could inform the person about legal rights and obligations during the split. Unlike a divorce, where state law governs certain aspects of property division if a couple cannot agree, the protections for a person in an unmarried relationship are far less in scope.