Whether a couple was married or cohabiting can completely change what happens with any real estate they purchased in the case that they split up.
In the case of a marriage, the court will usually see the property as jointly owned and will thus allocate it in the distribution of property. If the couple were just cohabiting, however, it might not be as straightforward. If only one partner is on the property title, he or she will probably walk away with that property. If both are on title, they will have to agree what to do with it or have a court decide for them.
In both cases, having a cohabitation agreement would be a boon — in it, the couple can lay out what percentage of the property each owns and what will happen with it in the case that they break up.
For example, let’s say Mark and Lisa are happily living together and buy a house. Trying to plan responsibly for the future, they add details about the real estate purchase to their existing cohabitation agreement. They may agree to sell the house and split the proceeds or for Mark to buy out Lisa’s share, if it happens that they break up. Or, if the cohabitation agreement establishes that Lisa gets primary custody of their bulldog, Rex, they may agree that she will be able to keep possession of the house for a year until she can find another pet-friendly living situation.
Photo credit: felixp7