Resolving Unmarried Property Disputes
August 25, 2015 |
David Degnan, Esq.
Owner, Degnan Law, PLLC
You May Not Own As Much As You Think
Unmarried couples are buying properties in droves in Arizona. However, when the relationship ends, the parties’ respective property ownership interests are not well defined by law. As property values increase and regain equity, a new wave of litigation is hitting the courts to determine the parties’ respective ownership interests.
Importantly, courts typically ask one question: what are the reasonable expectations of the parties Carroll v. Lee, 712 P.2d 923 (Ariz. 1986); Cook v. Cook, 691 P.2d 664 (Ariz. 1984)? If there is a written agreement, ownership expectations are clear and subject to that cohabitation agreement. However, if the parties do not have an agreement, then a court is likely to resolve the dispute by looking at the following factors, among others, to define the parties’ reasonable expectations:
Title: If the property is titled as the woman’s sole and separate property, then the court is less likely to find that the parties have an implied partnership or expectation to share ownership;
Purchase: If a party paid the entire purchase price and all of the related insurance and closing costs, then the court is less likely to find there is an expectation to share ownership;
Unlike Contributions: If one party buys the property and pays the monthly mortgage and the other pays to remodel the kitchen, then this tends to show that both are contributing to the property and both have a reasonable expectation of ownership. Carroll v. Lee, 712 P.2d 923 (Ariz. 1986) (“It is of no consequence that the parties exchanged ‘unlike services’”);
Day to Day Expenses: If both parties use the property and both contribute toward the day to day expenses, improvements, mortgage, operations, and maintenance, then this would likely show joint ownership. Id.
Commitment: Where one party gives up his or her job and agrees to act as a homemaker, then the same would suggest that the parties have an expectation of joint ownership. See, e.g., Marvin v. Marvin, 18 Cal. 3d 660, 134 Cal. Rptr. 815, 557 P.2d 106 (Cal 1976);
As the above may suggest and absent an agreement, the court may award some percentage of the property to a party that did not pay for the property. In fact, the court may find that the parties had an implied partnership or joint enterprise agreement based on the parties’ conduct. See Carroll v. Lee, supra. And when such ownership disputes arise, one party could file a lawsuit to force the sale of the property, to recover one’s equitable share, and to obtain reimbursement for expenses and other costs.
Indeed, there are many thorny issues that require serious consideration by unmarried couples. However, many of these issues may be resolved by drafting a cohabitation agreement while the relationship is strong rather than waiting until after a break up to resolve these questions.