If my boyfriend and I are purchasing a house together, how can I make sure that I get my downpayment back if we break up?

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If my boyfriend and I are purchasing a house together, how can I make sure that I get my downpayment back if we break up?

I am putting money down and his name will be on the loan, both of our names will be on title. What kind of document is needed to file, that states if we were to end our relationship and had to sell the property, I want my down payment back, the loan balance paid off, and we split the remaining balance so that each party can restart their lives?

Asked on January 19, 2016 under Real Estate Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

Such an agreement would not be legal: you cannot make monetary agreements about relationship status or which create an economic incentive for someone to stay in a relationship, or a penalty if they do not.
What you can do is create an agreement which states that in consideration of you putting the deposit down, if and when the home is sold, you will be reimbursed the amount of the down payment plus, say, an extra 10%, after paying off any mortgage(s) and the costs of sale (e.g. realtor, etc.) but before otherwise distributing any proceeds from the sale, and that the proceeds after paying the mortgage, costs, repaying the deposit, and paying you the extra 10% will then be split evenly between the two of you. This puts the focus on the money--that you fronted the cash--not on the relationship, which is legally where the focus belongs. And if you stay together and jointly want to sell, to relocate or move? Then you can ignore that agreement, or part of it (e.g. the extra 10%) if you like and give up your right to it.
The agreement needs to be signed by both of you. It does not need to be filed.


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