Buying with Someone Other than Your Spouse? Here’s What You Need in Writing

Buying real estate is exciting, but it’s also one of the largest financial commitments you may ever make. If you’re purchasing property with someone other than your spouse, whether it’s a partner, friend, family member, or business associate, you’ll want more than a handshake and good intentions.

A well-drafted joint ownership agreement can protect everyone’s investment, avoid costly disputes, and give you a clear path forward if life changes. 

Here’s what to consider:

Decide on the Right Form of Ownership

When you take title together, you’ll usually choose between:

1. Joint Tenancy with Right of Survivorship:  If one owner dies, their share passes automatically to the surviving owner(s), regardless of what their will says. This can provide stability and keep the property out of probate, but it may conflict with an owner’s estate plans.
2. Tenancy in Common: Each owner has a defined share that can be sold, gifted, or inherited. This offers flexibility but could leave you co-owning with your partner’s heirs if something happens to them.

Define the Terms with a Joint Ownership Agreement

A joint ownership agreement is essentially your “rulebook” for the property. It spells out:

• Who owns what percentage of the property, i.e., their ownership interests
• Who contributes what toward the down payment, principal/interest payments, taxes, and other carrying charges
• Who handles what responsibilities, such as property maintenance and improvements

Plan Your Exit Before You Need It

Relationships and priorities change. Having a clear exit strategy now prevents a legal and emotional mess later. Your agreement should address:

• Buyout options – If one owner wants out, do the others get first chance to buy their share?
• Valuation methods – How you’ll determine the property’s fair market value for a buyout.
• Forced sale provisions – What happens if you can’t agree on keeping or selling the property.

In NYC, where market swings and co-op board rules can complicate sales, these provisions are especially important.

Common solutions include a right of first refusal (giving the other owner first chance to buy out the selling owner’s interest), agreed-upon valuation methods, or a pre-set timeline for selling the property.

In Summary

Buying property with someone other than your spouse can be a smart financial move, but without the right agreements in place, it can also be a recipe for conflict. A well-drafted joint ownership agreement that covers ownership interests, financial obligations, and an exit plan will protect your investment and your relationship.