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After a number of years together, an unmarried couple in a no-common-law-marriage state decide to consolidate households. The apartment renter (say $1000/mo) will move into the other's mortgaged house (say $2000/mo mortgage).

They decide 1) to split the savings, which amounts to the rent on the apartment, thus the non-owner will contribute half of that rent ($500) towards the mortgage/taxes/whathaveyou, 2) split the utilities, and 3) the owner will always be 100% sole owner regardless of developments.

While the owner doesn't want a contract, the non-owner is willing and thinks a contract is a very good idea for the benefit of the owner.

How might a cohabitation contract benefit the non-owner in the event that 1) the relationship ends disagreeably, and 2) the relationship continues but a lawsuit is filed against one or the other by a third party?

(Note corresponding financial question here.)

  • Country/jurisdiction? In many countries (for example New Zealand), if the couple lives together long enough (3 years), the "cohabiation" contract will be superseded by Relationship Property law. To avoid that, the contract must be specifically designed to contract out of the law (this is also called "prenuptial agreement"). – Greendrake Dec 16 '17 at 7:44
  • Sorry for delay. US. On the state bar webpage, the marriage FAQ says common law marriages are not created. – Lad and Lass Dec 18 '17 at 20:02
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Ownership of real property often carries obligations to local or national bodies, such as property taxes (which are paid to local government).

Being an owner of the property puts that obligation on you. Depending on the structure of the tax law, owners may be obligated by proportion (you own x% of the house, you owe x% of the tax) or they may be obligated "jointly and severally" (everybody owes the taxes together, it can be - and sometimes is - taken from the first person the claimant is able to get their legal process hands on).

Contractual disavowment of any ownership interest relieves you of that tax obligation, at least.

  • If the non-owner's name has never appeared on any of the property paperwork (mortgage, payments, taxes, insurance etc ...) what function would contractual disavowal serve? – Lad and Lass Dec 18 '17 at 20:07
  • Marriage in many jurisdictions (in particular, those based on common law, as far as I can tell) immediately creates shared ownership, regardless of what the document says (until it is updated to match fact). Saying explicitly "I am definitely not owning this, even though normally I could" avoids that "problem". – Nij Dec 18 '17 at 21:56

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