Cohabitation Agreements Rarely Thought Of….Very Necessary

Schwartz, Fox & Saltzman, LLC. – Philadelphia Divorce Lawyers


So, you, or your Sister, or your best friend, is thinking of buying a house or condo, with his or her friend or lover. The parties are unmarried, and have no imminent plans to marry, so a Pre-Nuptial Agreement is not in order. All seems rosy and exciting, and it certainly is while that relationship between the parties is likewise wonderful. But, despite the best intentions of the parties, people change, their needs change and their relationships can change. 

What happens if:

  • You, your Sister, or your best friend breaks up with the other party; or, the other party simply wants to “cash out” of the property they bought, with their ownership         partner, and the other party doesn’t want to sell?
  • One of the two owners dies during the time you two own the property together? Generally, two unrelated co-owners will own the property as Tenants in Common. As such, each owner owns a divisible one-half interest in the property. So, when Co-Owner “A” passes away, his or her one-half interest in the property passes to his or her heirs, which probably are his parents or his siblings. At that instant, the remaining owner becomes a co-owner with a third-party, who he or she doesn’t know well and may not like.
  • One of the owners becomes disabled and cannot make the payments the other owner is relying upon to keep the property afloat?

 There are a host of other possible scenarios, which might lead to a situation where one party either doesn’t wish to sell when the other does want to sell, or when a party can’t pay their share of the expenses and the remaining party wants to sell the property, but can’t, because the other party simply can’t (in the event of death) or won’t agree to sell. What’s a party to do?

The parties need to see a good Family Lawyer before they but a house or other household together. A properly drafted Cohabitation Agreement will lay out a roadmap as to what happens in a myriad of situations, which can come up, and avoid filing an Action in Partition (this is the lawsuit the party who wishes to sell will file with the Court to simply get a Court Order that the property be sold). The legal fees for the filing or defending an Action in Partition dwarf the legal fees to prepare a Cohabitation Agreement.

Signing a Cohabitation Agreement has nothing to do with love or whether the party who is suggesting the Agreement loves the other party, or trusts the other party. It’s simply makes good, mature sense. To spend hard-earned money on legal fees, when same can be avoided, simply is the smart way to proceed, and the smart way to proceed is to have a properly drafted Cohabitation completed and signed.

These Agreements can speak to not only the ultimate disposition of the property, but how much each party receives on sale, the monthly financial responsibilities of each owner and any other particularity a party wishes to address.

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