Scenario: You bought a house, and your significant other moves in. Do you charge?
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07-11-2014, 09:59 AM
RE: Scenario: You bought a house, and your significant other moves in. Do you charge?
(07-11-2014 09:15 AM)Cathym112 Wrote:  http://stimmel-law.com/article/cohabitat...nder-law-0

Took me 5 seconds to find it.

"On the other hand, unmarried cohabitants do not enjoy the same rights usually automatically granted to married individuals, particularly with respect to property acquired during a relationship. Marital property laws usually do not apply to unmarried couples, even in long-term relationships. Moreover, laws regarding distribution of property of one spouse to another at death, rights to take care of the property of the other during periods of mental incompetency, even visitation rights at hospitals, do not apply to unmarried couples absent extraordinary efforts creating and filing various documentation that some states allow. Children of unmarried couples have traditionally not been afforded the same rights as children of married couples, though most of these laws have now been revised to avoid unfairness towards offspring."

Here is another:

http://communityproperty.uslegal.com/pro...-marriage/

I do not think it is so cut and dry and suspect it is a state by state issue.

Quote:Property Issues If the Relationship Ends

If a house is bought in joint names (either as joint tenants or as tenants-in-common) the division may be straightforward and the house should be split 50/50 on separation. But if the property is in the sole name of one party, but both partners contribute to the mortgage and maintenance, there may be a battle if the couple separates.

If the property is in the sole name of one party, then basically it remains that person's property on separation, unless the other party can establish that there was a common intention that they would be entitled to a share in the property. Proving a common intention is difficult unless it is in writing, or there is proof both parties contributed to the purchase price, mortgage payments and maintenance.

http://family.findlaw.com/living-togethe...99KuE.dpuf
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07-11-2014, 10:04 AM (This post was last modified: 07-11-2014 10:18 AM by Cathym112.)
RE: Scenario: You bought a house, and your significant other moves in. Do you charge?
(07-11-2014 09:43 AM)Adrianime Wrote:  
(07-11-2014 07:20 AM)Cathym112 Wrote:  Look dude - you are over analyzing this way too much. The mortgage is what it costs to live there. It's paying rent to yourself. The reason why it's paying rent to yourself is because even if you sell the house, you will never get everything you paid into the house (repairs, upgrades, etc.) back. People get confused over this, understandably so when cnn money writes misleading articles about real estate. Specifically, when they say you will get 70% return on your asset, that means you LOSE 30%. It's extremely rare that people get all their money back in terms of appreciation.

A mortgage is no different than rent. I promise you that any rent you paid before you owned was the price of the mortgage, tax, water consumption and a few hundred more to cover repairs. Most landlords don't rent for less than the expense of owning it. That would be stupid.

Therefore, she she cover half the damn mortgage. It's rent.

This is suppose to be your significant other. Your PARTNER. No one gets to live rent free. A partner that balks at the thought of contributing to a future together is someone you should not be partnered with.
I'll try to explain to you why I think mortgage cost is not the best thing to base the charge off of.

These simple examples will use a 30 year fixed mortgage. and adding close to .083% of the cost of the home to the monthly cost to account for tax.

example 1: House: 300K, Down payment 100K, Interest rate 3%
Mortgage ~= 1k / month

example 2: House: 300K, Down payment 30K, Interest rate 3%
Mortgage ~= 1.4K / month

example 3: House 300K, Down payment 30K, Interest rate 5%
Mortgage ~= 1.7k / month
---
example 4: House: 700K, Down payment 140K, Interest rate 3%
Mortgage ~= 2.95k / month

example 5: House: 700K, Down payment 400K, Interest rate 3%
Mortgage ~= 1.85K / month

example 6: House 700K, Down payment 100K, Interest rate 5%
Mortgage ~= 3.8k / month
---

That's enough rough examples (I think).
In examples 1-3 the mortgage ranges $700 based on how the initial buyer chose (or was forced to based on their credit/financial situation) to purchase the home.

In examples 4-6, the mortgage ranges almost 2k

All of these examples assume a 30 year fixed mortgage. But choosing an adjustable mortgage would likely increase the long term monthly payments, or choosing a 15 year fixed would greatly increase the mortgage payment.

The point is, these are the consequences of the choices of the buyer. Somebody coming into the home after the fact shouldn't need to spend an extra $1000-$2000 per month just because the buyer chose to buy with a tiny down payment, a shorter mortgage, or a high interest rate.

I don't think that's over-thinking. The market rate for rent makes a lot more sense to be the maximum amount you would ask for.

This is completely different from buying a home together, in which case splitting 50/50 makes complete sense.

I understand your examples, but here is why I disagree.


You bought the house. It was your choice to put whatever you put on the down payment. It was your choice to do a 30 year vs a 15 year, etc.

The mortgage (I'm using the word mortgage collectively with your escrowed taxes) is what it costs to live there. The terms in which the mortgage is acquired is irrelevant. Yes. Technically speaking, she is contributing less. But that would be the same if you were the one that fronted the security deposit for a rental. You, as the payer, absorb the risk that you could lose the security deposit.

Even if you bought the house jointly, you would have both needed to contribute the exact same money to the down payment and would have had identical credit scores as one could argue that a person's credit score is the reason the interest rate and therefore the mortgage payment is lower. Most cases, in a strictly literal sense, is never truly fair. Thats why I think you are over thinking this.


Nickel and diming is not a great way to start off a cohabiting partnership....but its not my relationship. Do whatever you think is best.

A little rudeness and disrespect can elevate a meaningless interaction to a battle of wills and add drama to an otherwise dull day - Bill Watterson
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07-11-2014, 10:16 AM
RE: Scenario: You bought a house, and your significant other moves in. Do you charge?
(07-11-2014 09:59 AM)wazzel Wrote:  
(07-11-2014 09:15 AM)Cathym112 Wrote:  http://stimmel-law.com/article/cohabitat...nder-law-0

Took me 5 seconds to find it.

"On the other hand, unmarried cohabitants do not enjoy the same rights usually automatically granted to married individuals, particularly with respect to property acquired during a relationship. Marital property laws usually do not apply to unmarried couples, even in long-term relationships. Moreover, laws regarding distribution of property of one spouse to another at death, rights to take care of the property of the other during periods of mental incompetency, even visitation rights at hospitals, do not apply to unmarried couples absent extraordinary efforts creating and filing various documentation that some states allow. Children of unmarried couples have traditionally not been afforded the same rights as children of married couples, though most of these laws have now been revised to avoid unfairness towards offspring."

Here is another:

http://communityproperty.uslegal.com/pro...-marriage/

I do not think it is so cut and dry and suspect it is a state by state issue.

Quote:Property Issues If the Relationship Ends

If a house is bought in joint names (either as joint tenants or as tenants-in-common) the division may be straightforward and the house should be split 50/50 on separation. But if the property is in the sole name of one party, but both partners contribute to the mortgage and maintenance, there may be a battle if the couple separates.

If the property is in the sole name of one party, then basically it remains that person's property on separation, unless the other party can establish that there was a common intention that they would be entitled to a share in the property. Proving a common intention is difficult unless it is in writing, or there is proof both parties contributed to the purchase price, mortgage payments and maintenance.

http://family.findlaw.com/living-togethe...99KuE.dpuf

Of course it isn't cut and dry and difference slightly from state to state. However, I'm speaking in general terms. And as a general rule, anything acquired before the marriage is separate property. As long as the property is not commingled, it remains so.

A little rudeness and disrespect can elevate a meaningless interaction to a battle of wills and add drama to an otherwise dull day - Bill Watterson
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07-11-2014, 10:21 AM
RE: Scenario: You bought a house, and your significant other moves in. Do you charge?
(07-11-2014 10:16 AM)Cathym112 Wrote:  
(07-11-2014 09:59 AM)wazzel Wrote:  I do not think it is so cut and dry and suspect it is a state by state issue.


http://family.findlaw.com/living-togethe...99KuE.dpuf

Of course it isn't cut and dry and difference slightly from state to state. However, I'm speaking in general terms. And as a general rule, anything acquired before the marriage is separate property. As long as the property is not commingled, it remains so.

Yup and agree. My though is joint paying of mortgage and maintenance is implied commingling. I suspect it would be enough to bring a lawsuit even if they non-owner lost.
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07-11-2014, 10:26 AM
RE: Scenario: You bought a house, and your significant other moves in. Do you charge?
(07-11-2014 10:21 AM)wazzel Wrote:  
(07-11-2014 10:16 AM)Cathym112 Wrote:  Of course it isn't cut and dry and difference slightly from state to state. However, I'm speaking in general terms. And as a general rule, anything acquired before the marriage is separate property. As long as the property is not commingled, it remains so.

Yup and agree. My though is joint paying of mortgage and maintenance is implied commingling. I suspect it would be enough to bring a lawsuit even if they non-owner lost.

That's how it works in Ontario (it varies by province). But for common-law constructive trust you're only entitled to get out (a proportional share to) what you put in - not an equal share.

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07-11-2014, 10:52 AM
RE: Scenario: You bought a house, and your significant other moves in. Do you charge?
(07-11-2014 10:21 AM)wazzel Wrote:  
(07-11-2014 10:16 AM)Cathym112 Wrote:  Of course it isn't cut and dry and difference slightly from state to state. However, I'm speaking in general terms. And as a general rule, anything acquired before the marriage is separate property. As long as the property is not commingled, it remains so.

Yup and agree. My though is joint paying of mortgage and maintenance is implied commingling. I suspect it would be enough to bring a lawsuit even if they non-owner lost.

jointly paying the mortgage is not considered commingling. Not really.

Maintenance, yes. But simply paying a portion of the cost to live there does not entitle you to the property.

And in the US, even if you paid the debt off an investment, you aren't necessarily entitled to receive all that back. After all, you USED it.

Example. A friend borrowed my mother's car for an extended period of time. Mother said, as long as you are using the car, you will pay the costs of the car, including car payment, insurance, and regular maintenance from use. This lasted approximately 6 months. When the friend stopped being friends with my mother, and my mother demanded the car to be returned, the friend took her to small claims to get the monies paid back from my mother, citing that she had some ownership stake in the car because she had made improvements (the car needed new tires).

The judge threw it out. Why? Because she used the car. She paid for it, and used it while she was paying for it.

As long as your SO does not contribute to the house payments when she isn't living there, there really isn't any commingling. Not in any real sense. Its simply paying the cost of living.

A little rudeness and disrespect can elevate a meaningless interaction to a battle of wills and add drama to an otherwise dull day - Bill Watterson
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07-11-2014, 12:19 PM
RE: Scenario: You bought a house, and your significant other moves in. Do you charge?
(07-11-2014 09:30 AM)cjlr Wrote:  For common-law couples here there is no consideration of any property other than that which is explicitly jointly held, with the exception of that falling under "constructive trust"; i.e., if one partner puts money towards maintenance of another's assets, it's a type of implicit joint ownership (generally but not necessarily property). Individual assets go to the individuals, period.
(unless, obviously, someone files a dispute in court - but if you're going to court at all there are necessarily already things under dispute)

Unless consulting a lawyer, perhaps creating some specific asset protection contract (like a pre-nup but for defacto's), I'd at least be careful not to mention house maintenance or mortgage.

If you are going to charge her, then charge her rent, at market rate (if you are that calculative) or at a discounted mate's rate. But never mention that her payment is part of mortgage payment or part of covering maintenance, htat might come back to bite you.
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07-11-2014, 12:55 PM
RE: Scenario: You bought a house, and your significant other moves in. Do you charge?
(07-11-2014 10:04 AM)Cathym112 Wrote:  I understand your examples, but here is why I disagree.


You bought the house. It was your choice to put whatever you put on the down payment. It was your choice to do a 30 year vs a 15 year, etc.

The mortgage (I'm using the word mortgage collectively with your escrowed taxes) is what it costs to live there. The terms in which the mortgage is acquired is irrelevant. Yes. Technically speaking, she is contributing less. But that would be the same if you were the one that fronted the security deposit for a rental. You, as the payer, absorb the risk that you could lose the security deposit.

Even if you bought the house jointly, you would have both needed to contribute the exact same money to the down payment and would have had identical credit scores as one could argue that a person's credit score is the reason the interest rate and therefore the mortgage payment is lower. Most cases, in a strictly literal sense, is never truly fair. Thats why I think you are over thinking this.


Nickel and diming is not a great way to start off a cohabiting partnership....but its not my relationship. Do whatever you think is best.
I think you are misunderstanding me...my goal is to have her spend less money than if she was paying half the mortgage.

Since the mortgage is ultimately the money owed in order to gain equity, that particular number is not the appropriate number to base "rent" off of....because the person moving in is not gaining any equity. My stance is that basing it off the mortgage is unfair (to the renter).

And of course almost no situation will be completely equal/fair. I don't expect it to be.

But I understand you disagree. Just wanted to make sure I wasn't being misunderstood.

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07-11-2014, 01:29 PM
RE: Scenario: You bought a house, and your significant other moves in. Do you charge?
(07-11-2014 12:19 PM)Stevil Wrote:  
(07-11-2014 09:30 AM)cjlr Wrote:  For common-law couples here there is no consideration of any property other than that which is explicitly jointly held, with the exception of that falling under "constructive trust"; i.e., if one partner puts money towards maintenance of another's assets, it's a type of implicit joint ownership (generally but not necessarily property). Individual assets go to the individuals, period.
(unless, obviously, someone files a dispute in court - but if you're going to court at all there are necessarily already things under dispute)

Unless consulting a lawyer, perhaps creating some specific asset protection contract (like a pre-nup but for defacto's), I'd at least be careful not to mention house maintenance or mortgage.

If you are going to charge her, then charge her rent, at market rate (if you are that calculative) or at a discounted mate's rate. But never mention that her payment is part of mortgage payment or part of covering maintenance, htat might come back to bite you.

Eh?

I don't see how deliberately keeping a partner ignorant of the law is anywhere close to a good idea. Nor would any "agreement" made under such conditions be judged as in good faith.

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07-11-2014, 01:30 PM
RE: Scenario: You bought a house, and your significant other moves in. Do you charge?
(07-11-2014 12:55 PM)Adrianime Wrote:  
(07-11-2014 10:04 AM)Cathym112 Wrote:  I understand your examples, but here is why I disagree.


You bought the house. It was your choice to put whatever you put on the down payment. It was your choice to do a 30 year vs a 15 year, etc.

The mortgage (I'm using the word mortgage collectively with your escrowed taxes) is what it costs to live there. The terms in which the mortgage is acquired is irrelevant. Yes. Technically speaking, she is contributing less. But that would be the same if you were the one that fronted the security deposit for a rental. You, as the payer, absorb the risk that you could lose the security deposit.

Even if you bought the house jointly, you would have both needed to contribute the exact same money to the down payment and would have had identical credit scores as one could argue that a person's credit score is the reason the interest rate and therefore the mortgage payment is lower. Most cases, in a strictly literal sense, is never truly fair. Thats why I think you are over thinking this.


Nickel and diming is not a great way to start off a cohabiting partnership....but its not my relationship. Do whatever you think is best.
I think you are misunderstanding me...my goal is to have her spend less money than if she was paying half the mortgage.

Since the mortgage is ultimately the money owed in order to gain equity, that particular number is not the appropriate number to base "rent" off of....because the person moving in is not gaining any equity. My stance is that basing it off the mortgage is unfair (to the renter).

And of course almost no situation will be completely equal/fair. I don't expect it to be.

But I understand you disagree. Just wanted to make sure I wasn't being misunderstood.

I understood you. Nickel and diming (even if it works out in her favor) again, is not my idea of a good healthy start to a cohabitating relationship. This is what it costs to live in your house for you. She should be contributing to that. However you want to do that is up to you.

A little rudeness and disrespect can elevate a meaningless interaction to a battle of wills and add drama to an otherwise dull day - Bill Watterson
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