Nowadays, it is much more common for people to purchase a home as an unmarried couple than it was in the past. However, it is an unfortunate fact that love does not always last forever, so how title to the home is held can potentially cause significant problems if not addressed beforehand. The same is true if one of the homeowners unexpectedly dies. It is, therefore, important to have a basic understanding of how real property can be held in New Jersey when buying a home.
The most common way for multiple owners to hold title to property is as “Tenants in Common”, where each person is deemed to own a specific legal share (50 percent each in the case of an unmarried couple) of the property. This gives each owner unrestricted rights to the property, including the right to sell, transfer or mortgage his or her interest to other parties without the knowledge or consent of the other owner. Even potentially more problematic, if one of the owners dies, his or her share would go to his or her heirs (unless they have a Last Will that says otherwise), rather than to the surviving owner. Unless this is what the parties intended, this could leave the survivor with a stranger or even an adversary as a co-owner.
Perhaps a better option for an unmarried couple is to own their home as “Joint Tenants with Rights of Survivorship.” This type of ownership, which must be clearly spelled out in the Deed, insures true joint ownership in the property and results in the automatic transfer of title to the survivor when the first owner dies. Moreover, under ownership as “Joint Tenants”, it is impossible for one of the parties to sell/transfer or mortgage his or her interest without the consent of the other.
Married couples (and those in a Civil Union) in New Jersey automatically take title to property as “Tenants by the Entireties”, which is essentially equivalent to “Joint Tenants with Rights of Survivorship.” If a couple marries after they acquire title to a property and are listed on the Deed as “Tenants in Common” or there is no ownership description at all, then it is advisable to update the Deed to reflect their new marital status.
Consult an attorney
It is advisable for unmarried couples to consult with an experienced real estate attorney when purchasing a home. An attorney can advise parties of their legal rights and draft the necessary agreements to protect their best interests.