More singles sharing home costs


Five years ago, Mary Beth Mullen and her sister, a mother of two who had recently been divorced, decided to join forces to buy a house because neither could afford to do it on her own.

"It was an opportunity for me to begin a financial investment in homeownership, which was very important to me," said Ms. Mullen, who is now 38. "I wasn't in the position to purchase a property on my salary unless it was very small. Together we bought something very wonderful, a late 1800s historic home in Annapolis."

Real estate experts say that more single people are buying homes together for a variety of reasons.

Many people are marrying later and home prices are out of the reach of many singles like Ms. Mullen, who develops educational programs for the Smithsonian Institution.

At this time of year, many singles also consider looking for a partner to buy a weekend or summer cottage.

Although these deals can work out well for both parties, there are lots of pitfalls.

If you do not structure the deal carefully, it can turn into a financial and emotional disaster.

"You are entering a murky world and you may not be able to exit if you don't do things properly," said Nadine Gordon Lee, a partner at Ernst & Young in New York.

Two people who are not married to each other should always have a contract before they enter into a deal.

It should address all aspects of running the household, taking care of maintenance, paying the bills, insuring the property and, eventually, selling it.

"I would want to know something about the other person's financial situation, too," said David A. Tane, a real estate lawyer with Gallet Dreyer & Berkey in New York, who has handled a number of such agreements for singles.

Proper titling of the property is an issue, too.

A husband and wife typically hold title to a home as "joint tenants with rights of survivorship."

If one dies, the property passes to the other.

But that is not necessarily appropriate for two singles who may each want to pass the property on to his or her own heirs.

Instead, title should probably be held as "tenants in common."

That way, you control what happens to your share.

That's what Ms. Mullen and her sister, an account manager at a direct-marketing firm, did.

They had a contract drawn up by a lawyer and set up a household account to which each woman contributed her share of the money to run the household once a month.

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