Breaking Up Is Hard to Do: Who Gets Credit for the Deposit When Unmarried Couples Partition a Home?
Every 1 in 3 Millennials purchased a home in 2018, and yet only 36% of Millennials were married. It’s getting more and more common for this generation to choose to purchase a home together as boyfriend/girlfriend and take title as joint tenants with right of survivorship. But, what happens when they breakup and cannot agree to amicably sell their home, or the home is upside down and can’t be reasonably sold on the market, especially when the home is one of the largest joint assets they have? Who is entitled to what? And does the fact that they bought the home while in the throes of love, starry eyed about a future together, but unmarried, make a difference? According to the Third District Court of Florida, it does. In fact, it may make a huge difference in the split of the asset.
In a recent case out of the Florida Third DCA, Fernandez v. Marrero, Case No. 3D16-2931 (Fla. 3rd DCA 2019)(Opinion Filed September 25, 2019), the Court determined that a boyfriend who carried expenses of property purchased jointly with his girlfriend was not entitled to credits for expenses paid towards the purchase and maintenance of the property because they were deemed to be gratuitous in nature.
The boyfriend, Fernandez, purchased a home in 2014 with his girlfriend, Marrero. Fernandez alone paid the down payment, closing costs, mortgage payments and repairs with his own money. Marrero contributed nothing to these payments and expenses. They ended their relationship only one year later in 2015. The girlfriend filed a partition action. The parties agreed to the partition; however, the boyfriend sought credit against the proceeds of the sale for the reimbursement of the down payment, closing costs, mortgage payments and cost of repairs which he made while owner under the theory that this was a “business transaction.”
In reviewing the monies paid in connection with the down payment and closing costs, pre-closing expenses and post closing expenses, the Court found that while a trust relationship exists, and even though typically a co-tenant should be allowed this credit, that presumption does not exist when the party who paid for the other party’s share did so in connection with the grant of a gift, in furtherance of their relationship, not in furtherance of a “business relationship” as Fernandez argued. The Court did side with Fernandez as to entitlement to 50% of post-closing expenses, such as mortgage payments and cost of repairs.
So, while the song “Breaking Up is Hard to Do” is applicable here, so is “What’s Love Got to Do with It”. Obviously, the Third DCA believes it has a lot to do with it. Before you make that purchase with stars in your eyes, think about hiring competent counsel to draft an agreement to protect yourselves from surprises like this down the road.