What happens when you make your significant other a joint tenant in your home and your relationship subsequently dissolves?
We have been receiving an increase in the number of calls from potential clients who tell us that they own a home as a joint tenant with their significant other and that the relationship is ending. They want to know how to go about removing their partner from the deed to their home.
If the breakup is amicable and the parties agree who should keep the home and how much compensation, if any, the other party should receive for signing a Quit Claim Deed, this process is relatively simple. More often than not, however, neither party wants to sign title in the property over to the other, nor do the parties agree on the value that the party receiving the property should pay to the other. When this deadlock occurs, the legal remedy is often costly litigation through a partition action.
A partition action between two joint tenants of a house frequently results in the Court ordering the house to be sold at a sheriff’s sale. At a sheriff’s sale, the house is sold at auction to the highest bidder. Frequently, sheriff’s sales do not result in the house being sold at fair market value. While some judges have suggested that marketing the house before the sale can increase the number of bidders and therefore, the likelihood that a house will be sold close to its fair market value, the frequent outcome of the sale is that a house is sold below its fair market value. Further, when selling a house subject to a mortgage at a sheriff’s sale, the lender will be paid first. Proceeds from the sale, if any, are then equally divided between the two joint tenants. Proceeds are divided equally regardless of whether both parties’ names are on the mortgage and without consideration to any comparative contributions that each party made in purchasing the home, paying the mortgage, property taxes, maintenance, etc.
Under Wisconsin law, Courts have found that when an individual homeowner adds another person to the home’s title by creating a joint tenancy, the homeowner gifts a one-half interest in the property to the other person. The courts have held that simply by creating a joint tenancy, each automatically owns a one-half interest in the property. When the parties are unmarried, the Courts do not consider how long the original homeowner owned the home prior to adding his or her partner, nor does the court consider whether both parties are on the mortgage or have made financial contributions to household expenses such as mortgage payments, real estate taxes, insurance payments, utilities, and other routine household expenses.
This can result in some seemingly unfair results where a party that has owned a home for years, unconditionally creates a joint tenancy with his or her partner without adding the partner to the mortgage, and then weeks later the relationship dissolves, and the original homeowner’s partner is unwilling to vacate the premises or sign a Quit Claim Deed granting his or her ownership interest back to the original homeowner.
We encourage you to contact an attorney to review your situation before you create a joint tenancy in your home with your significant other so that you fully understand the consequences of your decision should your relationship with your partner dissolve.