We both own the house, what does that mean?

from HomeSeller: Friday, June 9, 2023

Affordable ways to make homes more appealing to modern buyers

Q: My girlfriend and I bought a house together in December. It was the first house either of us had ever bought. We each paid half of the down payment and we’re splitting the mort gage and tax payments equally. Several years ago, I read one of your columns where you talked about the different ways you can hold title to a house with somebody else.

I didn’t think much of it at the time, but this past weekend I was trying to clean out some paperwork and came across a copy of our deed. We apparently purchased the property as joint tenants. A Google search made it sound like if one of us dies the other person gets the whole house. We had never discussed this with our escrow officer or real estate agent, but we both have kids from previous marriages and we want them to get our interest if we die.

On the other hand, if one of us dies, we don’t want that person’s adult kids moving in with the survivor or selling the house out from under them. What, if anything, should we do?

A: This is a situation I’ve written about at least once each year in 28-plus years I’ve been writing this column. The reason is simple; there are more and more “blended” families where couples have the same questions you have. The emailed questions like yours have gotten more and more voluminous over the years.

You are correct that, as joint tenants, the deceased’s one-half interest will automatically pass to the other owner immediately upon their death. At that point, the surviving owner can do with the property as he or she wishes.

To accomplish your goals, in the unfortunate event one of you passes away, you’ll need to

First, you should sever your

The simplest way to do that is to record a new deed stating that your ownership is as “tenants in common.”

Tenants in common is the most common way for people to hold property and is even the legal default if no other method is mentioned on a deed. It means that the two of you will each own 50-percent of the property and are free to do whatever you want with it upon your death.

Now the problem gets a little more complicated.

If you want to put restrictions on each other’s children you can do it in one of two ways.

You can go to an estate planning attorney and have them draw up a will or trust that outlines the restrictions, giving the surviving owner the right to live in the property, alone if he wants, and restricting anyone else.

The problem with this method is either of you, maybe years down the road, can change that estate plan without telling the other owner.

I think a better way to go about it is to have a real estate attorney draft what’s known as a tenants-in-common agreement. Longtime readers have heard me speak about TiC agreements many times over the decades.

A TiC agreement is a contract between co-owners providing rules for how the property will be handled, who can live there, who pays for what, what to do if one partner wants to sell but the other doesn’t, etc.

In fact, that agreement can have almost anything in it. Plus, in your case, can be made enforceable against your heirs.

All of this comes with the guarantee that neither party can change the agreement without the consent of the other one.

It’s amazing how many times people invest hundreds of thousands of dollars in co-owned property with no written commitment regarding how the property will be handled.

Ultimately, somebody wants to sell, or thinks the owners can get more rent, or some other concern and a lawsuit results.

A good tenants-in-common agreement will address anticipated disputes before they happen and dictate what actions will be taken. Particularly in your case, if someone else takes over a co-owner’s interest.

Tim Jones is a real estate attorney in Fairfield. If you have real estate questions you’d like to have answered in this column you can contact him at AllThingsRealEstate@TJones-Law.com.