What Happens to the House When Unmarried Couples Break Up?

What Happens to the House When Unmarried Couples Break Up?

by Laine Carver, Associate Attorney

These days, it is not uncommon for people to be in long-term relationships in which they live in the same household as their partner without ever being married. This is oftentimes referred to as cohabitation.

In many states, including Wisconsin, marriage laws were created to attempt to leave both spouses in a similar financial position upon the dissolution of the marriage. However, those marriage and divorce laws do not apply to cohabitants who wish to terminate their relationship. Instead, the people involved in the break-up must piece-together separate areas of Wisconsin law to determine how the break-up should resolve. In this article, I will discuss what is likely the most expensive part of a breakup—determining ownership of real property owned by the once-loving partners.

There are three potential scenarios that play out when partners own real estate together and wish to end their relationship: (1) both partners agree to sell the property and split the proceeds; (2) only one partner wishes to retain the property and that partner has the money or credit to “buy-out” the other partner; or (3) both partners wish to keep the property and/or neither partner has the ability to buy-out the other. The third scenario is the focal point of this article.

When a person owns an interest in real property, there are specified remedies for which that person can sue. The first is for declaratory judgement, essentially asking the court to declare the person the owner of the property. The second is monetary damages. The third is for a partition of the interest in the real estate. The remedy of partition is sought when real property is owned by two or more people, and those people no longer wish to own property together.

There are three ways a court will handle a partition claim. First, if the court finds there is an easy way to divide the land by the portion of the real property interest owned by the parties (e.g., 50-50), the court will divide the land and grant each party their respective portion of the land.

Second, if the court does not see an easy way to divide the land according to the parties’ proportional interests, the court may appoint a third party (a referee) to attempt to draw a fair boundary to divide the land between the parties. The referee may conclude there is no fair way to divide the land and, therefore, it should be sold. Generally, the court will then order the sale of the property.

Third, the court may determine there is no fair way to divide the land as a matter of law and make the decision without the appointment of a referee. This is generally the case when the real property at dispute in a partition claim is a residence. In that scenario, the court will order the sale of the property, the proceeds of which will be distributed to the parties based on their proportional interest.

As you can probably tell, partition claims can be complicated and relatively expensive. That is why you should be sure to contact an attorney (1) to avoid entering into a situation in which a partition claim will be necessary, and (2), if you find yourself in the middle of a partition claim, to pursue or defend that claim to reach the best outcome for you. Please do not hesitate to contact Russell Law Offices, S.C. if you have any questions or concerns about cohabitation and the legal ramifications that may accompany it.