It does not matter whether you have been in love forever or whether you are purchasing a home with another individual so that you can share the expenses and hopefully build some equity, you still should have a written agreement which outlines your rights and liabilities if one party wants to move from the property. When you purchase real estate, whether a single family home, a townhouse or a condominium, in Maryland you can purchase it as a joint tenant with rights of survivorship or as a tenant in common. If the property is titled as joint tenants with rights of survivorship, if one of the parties dies, the surviving party will own all of the property. On the other hand, if you purchase a home as a tenant in common, then you have no rights of survivorship and each of you owns an equal share in the home.

Important questions to ask yourself before entering into a contract to purchase a home with another individual is how the expenses will be divided, what will happen if one of you decides to leave the home, move to a different area, or leave the relationship? You should plan for a course of action that will safeguard your rights in the property in the event that the other person wants to sell or vacate the property, if one party dies or if one party just wants out of the arrangement. You can provide for the right of first refusal to purchase the other person’s interest in the home, or you can provide that upon written notice, the home will be listed for sale with a realtor, set forth how the proceeds will be divided, and who will live in the home in the interim and how the expenses will be shared while the home is listed for sale.

Even if you own the property with another individual and there is never any acrimony between you, you should provide for how the mortgage interest will be allocated for your individual income tax returns, as well as how all other bills related to the home will be shared between you.

Owning a home with another individual is like everything else in life. You always hope for the best, but you should prepare yourself for the worst possible scenario. The stronger the written agreement is between you and your co-owner and the clearer the terms and provisions, the more likely that you will be financially safeguarded in the event of future difficulties.

What happens if one co-owner stops paying his share of the mortgage and other expenses for the home? Remember that co-owners who sign on a loan are jointly and severally liable for the repayment of that loan. That means that if the lender ultimately forecloses on the property, the lender can choose to pursue just one of the owners for full repayment of the loan, while ignoring the other party or proceed against both parties. An agreement between the parties can provide not only that both parties indemnify each other for the amounts which they agree to pay under the terms of an agreement, but also that should either party fail to honor the terms of the agreement, the other party could be entitled to attorney’s fees and costs for having to enforce the agreement.

Before purchasing a home with another person you should always consult with an attorney and have an agreement drafted regarding the purchase of the property that is signed by all of the parties.