Buying a Home and Not Married? Arizona Co-Habitation Agreements May be the Answer
If you’re in a long-term, committed relationship but are not married, buying property together in Arizona can be tricky. Without a formal marriage or legal contract, the rights to property, finances, and other assets may not be clearly defined. This is why a co-habitation agreement is critical for unmarried couples purchasing real estate.
What is a Co-Habitation Agreement?
A co-habitation agreement is a legal contract between two people who live together but are not married. It outlines how property and assets will be divided if the relationship ends, protecting both parties from potential disputes. When buying property together, this agreement ensures that each person’s ownership share, financial obligations, and rights are clear, helping avoid confusion down the road.
Why Should You Care?
In Arizona, property laws don’t automatically treat unmarried couples the same way they treat married couples. For example, if you buy a home together, the title may not specify how ownership is divided. Without a co-habitation agreement, you might end up in a legal battle if the relationship ends, or if one person passes away unexpectedly.
It is also common for couples to orally agree on how to fairly divide expenses, with one paying the mortgage and the other covering other mutual expenses. Because Court’s treat the expenses differently when determining contributions to the equity in the property, a clear agreement will protect all the parties involved.
Having a co-habitation agreement provides a roadmap for the division of property, especially when one partner’s financial contribution differs from the other. It can clarify whether property is owned jointly, or whether one person holds a larger share due to their financial input.
What Should Be Included?
- Ownership Shares: Determine how the property will be owned. Will both partners have equal shares, or will one partner hold a larger portion due to their contribution?
- Financial Responsibilities: Specify how mortgage payments, property taxes, and maintenance costs will be divided. This prevents confusion and potential disputes over money.
- Rights to the Property: Define what happens if one person wants to sell, move out, or if the relationship ends. Will one person have the right to buy the other out? Will the property be sold and the proceeds split?
- Death or Disability: Address what will happen if one partner passes away or becomes incapacitated. Who inherits the property? Will the surviving partner have a claim?
- Dispute Resolution: Consider including a clause about how disagreements will be handled. Mediation or arbitration can be an efficient way to resolve issues without going to court.
Protecting Yourself and Your Partner
A well-drafted co-habitation agreement can save both of you time, money, and heartache. Without it, you risk losing out on your fair share of property and facing unnecessary conflict. Arizona’s property laws do not automatically recognize the rights of unmarried couples in the same way they would recognize the rights of married couples. This means that if things go wrong, there may be no legal safety net for your rights to the property. Without a clear agreement, Court involvement may be necessary to divide the property when conflict arises which can be very costly and time consuming. Expending the time and money to protect yourself from the outset can save you significant fees and costs in the future.
Final Thoughts
Buying property together is a significant decision, especially for unmarried couples. To protect both your rights and your investment, make sure to create a co-habitation agreement before you make that purchase. By doing so, you’ll have peace of mind knowing that your financial interests are protected and your relationship won’t be complicated by unnecessary legal issues. While no one expects a relationship to end or conflict to arise, planning for the possibility provides peace of mind. Think of it like an insurance policy. You hope to never have to use it but are glad that you have it when you do.
Consulting with an attorney who specializes in family law or real estate law in Arizona is highly recommended to ensure your co-habitation agreement is legally sound and fully covers all potential scenarios.