What Happens When an Unmarried Couple Buys a House as a Tenancy-In-Common?

underwoodblogtenancy-300x300Generally, married couples who buy homes in California are afforded certain rights and protections under California law. These rights and protections do not necessarily apply to unmarried couples who own property as tenants-in-common. Unmarried couples can still take further steps to protect their property rights.

Differences Between Married Couples and Tenants-In-Common

Married couples in California who own property together have some ownership differences from normal tenants-in-common. The main benefit that married couples have over tenants-in-common is the right of survivorship. 

California is a community property state. This means that generally, any property a married person acquires while married is considered community property, which is property that is shared between the spouses. (CA FAM § 760.) Married couples have a right to survivorship in community property, similar to joint tenants. (CA CIVIL § 682.1.) If a married person dies, that person’s half of the community property is passed on to his or her surviving spouse. (Id.) 

An unmarried couple who purchases a home as a tenancy-in-common will only be afforded the rights given to tenants-in-common. Unlike married couples, tenants-in-common do not have a right to survivorship. When one tenant-in-common dies, that person’s interest will be transferred through the probate process to the deceased tenant’s heirs. (Dieden v. Schmidt (2002) 104 Cal.App.4th 645, 650.) If an unmarried tenant-in-common wishes for the property to be passed on to his or her partner, then a statement should be made in the will.

California law presumes that co-owners who purchase property together are tenants-in-common unless otherwise explicitly stated. (CA CIVIL § 686.) Tenants-in-common do not have to be held in equal ownership interests and can be in whatever percentage the couple decides. Additionally, tenants-in-common are free to encumber their respective interests, even without the consent of the co-tenant. (Schoenfeld v. Norberg (1970) 11 Cal.App.3d 755, 765.)

Tenants-in-common have equal rights of possession to the property, unless they have agreed otherwise. (Kapner v. Meadowlark Ranch Assn. (2004) 116 Cal.App.4th 1182, 1189.) Since tenants-in-common have equal rights of possession, a single tenant-in-common cannot exclude other tenants-in-common from any part of the property. (Zaslow v. Kroenert (1946) 29 Cal.2d 541, 548.)

What Rights Does An Unmarried Couple Have as Tenants-In-Common?

Unmarried couples do have options, however, to expand and enforce their rights as tenants-in-common. Unmarried couples can still create agreements regarding the property that are enforceable in court. California courts recognize that cohabitating unmarried couples can assert their rights to enforce contracts and interests for express and implied agreements between the parties. (Marvin v. Marvin (1976) 18 Cal.3d 660, 684.) 

These agreements between unmarried couples are known as Marvin Agreements and can provide additional protection for unmarried couples who are living together. For example, a court can enforce an implied contract based on the couple’s behavior. (Id.) The agreement cannot be based on a meretricious sexual relationship. (Id., at 665.)

Cohabitation is a prerequisite for the validity and enforcement of a Marvin agreement. (Bergen v. Wood (1993) 14 Cal.App.4th 854, 858.) If an unmarried person wants recovery from a Marvin agreement, that person must demonstrate a stable cohabitation relationship. (Id.) 

Additionally, Marvin agreement claims are still enforceable even after the couple marries. (Watkins v. Watkins (1983) 143 Cal.App.3d 651, 653.) Any rights and obligations made between the couple survive the marriage, and the couple can also bring Marvin agreement claims after the dissolution of marriage. (Id.) 

Alternatively, unmarried couples in California can also apply for domestic partnership. Having domestic partnership status will afford the couple the same community property rights as a married couple. (CA FAM § 297.5.) This includes the right to survivorship and the sharing of community property.

To apply for domestic partnership, the couple must file a Declaration of Domestic Partnership with the Secretary of State. (CA FAM § 297.) The couple must not be married to someone else or be in a domestic partnership with someone else, they must not be related by blood in a way that would prevent them from getting married, they must be over eighteen years old, and they must both be capable of consenting to the domestic partnership. (CA FAM § 297.) 

What Happens When the Relationship Breaks Down? 

If a marriage dissolves, then the married couple has a relatively easy legal solution to divide the property compared to unmarried couples. The court can simply divide the community property equally between the parties. (CA FAM § 2550.) In contrast, unmarried couples do not have one easy solution to deal with the property.

Unmarried couples have several options regarding their home if the relationship does not work out. One option is to do nothing and stay on the deed until the mortgage is satisfied in whatever the time period is. Typically, this can be fifteen or thirty years. This may not be realistic though if the relationship worsens further. 

Another option is to convince the other person to sell the home. If successful, this may be the best option because courts do not have to get involved. The couple can simply list their home for sale and move on with their lives.

The couple can also partition the property. This may be an option if one party cannot convince the other to sell. In that case this solution may be attractive, since one party can bring a partition lawsuit to force a sale. If the partition of the home results in a sale, then the court will distribute the sale proceeds according to the parties’ respective ownership interests.

In any event, it is important for unmarried couples to have an agreement before purchasing a home together and outline a plan if the relationship does not work out. This could potentially save lots of time and money for the couple while preventing further headaches down the road. 

An Example

“Shawn” and “Julie” are in a romantic relationship and are not married. They decide to buy a home together as tenants-in-common. They find a nice house in Los Angeles and begin living together. Shawn holds a 60% interest while Julie holds a 40% interest in the property.

Shawn and Julie have an implied agreement where they each pay half of the costs and expenses for the property. Shawn also agrees to pay 60% of the mortgage payments. Since they are tenants-in-common and do not have a right to survivorship, Julie and Shawn decide to name each other as heirs in their wills. 

After several years, Shawn and Julie’s relationship sours. Shawn begins refusing to make payments on the property. Julie brings a Marvin claim against Shawn to enforce their agreement. 

The court finds that Shawn and Julie had a valid and enforceable Marvin agreement since they were cohabitating. The court orders Shawn to make the proper payments in accordance with the Marvin agreement. 

Shawn and Julie discuss what to do with their property now that their relationship is over. Julie refuses to sell the property, so Shawn brings a partition action. After trial, the court orders a partition by sale. The sale proceeds are distributed 60% to Shawn and 40% to Julie.

How Can the Attorneys at Underwood Law Assist You?

Unmarried couples who own a home together as tenants-in-common must be mindful of the differences in their rights versus the rights of married couples. The main benefit for married couples that unmarried couples do not have is the right of survivorship. Additionally, community property is shared between the spouse, while property owned under a tenancy-in-common is not. Still, there are many different ways unmarried couples can enforce and expand their rights in the property.

As each case is unique, litigants would be well-served to seek experienced counsel familiar with the ins and outs of property taxes and the law surrounding them. At the Underwood Law Firm, our knowledgeable attorneys are here to help. If you are seeking to buyout your cotenants interest in your property, are worried about whether you are subject to a tax-reassessment, or if you just have questions, please do not hesitate to contact our office.

Contact Information