So, you are in a relationship, and you decide to purchase property.  You think you are safe. You are not married, and you believe your significant other will have no claim to the real estate if you break up. You purchased it alone, or maybe you inherited it, or it was gifted to you.  Now you decide to renovate this home. Your partner is very excited and offers to help.

Fast forward a few years. You went ahead and renovated your home.  Your partner gave you let’s say $100,000.00 for certain renovations, repairs, etc.  The deed, mortgage or home equity is in your name alone.  You are paying the mortgage, carrying charges, taxes, etc.  Your partner moves in, and you live there for say three years.  You break up, he or she leaves. You think to yourself, at least you only have to deal with the emotional pain of the breakup but not any financial damage.

            This house now is too big and has too many memories for you. So, you decide to sell.  It has also gone up in value. You list the house. Your ex finds out and files a lawsuit.  Drumroll please!

 He or she claims that he gave you money for the renovations and you had an agreement that by making this investment they were a co-owner. The lawsuit is for unjust enrichment as well as for enforcing an oral agreement that they are an owner.  In essence they claim, you took the money and benefitted from it and did not live up to the oral agreement.

 There was a recent case with this similar scenario.  The headline in the New York law Journal read the jury awards $2.5 million to NBC reporter ex-fiancée in Hampton’s log cabin dispute.  In this case which was Rappaport v. Swift the jury found for Swift for his unjust enrichment claim, but not on his breach of contract.  Rappaport’s lawyer stated that from the beginning she denied the existence of any purported agreement with the plaintiff.

 This is based on contract law and makes sense especially since they were not married.  Swift alleged that while the couple were together, they struck up a deal in which Rappaport would offer up the land which she owned previously, and Swift would pay to construct the home there and the two would hold pro-rata stakes in the property.  After their breakup, Rappaport reneged on the deal and insisted that the millions that he dropped to constructing the lavish log home was merely a gift.  The court found there was not a contract; but Rappaport was unjustly enriched by taking the money and not giving Swift any compensation for his investment.

            The moral of this story is do not expect something for nothing. Furthermore, be careful what is said and what expectations you and your partner have in any real estate transaction.  You do not want a co-owner unless that is what you agree to. This is not just for those in a romantic relationship but anyone who is a “silent” partner or family member or friend who in some way “contributes’ to a real estate transaction.

 What is the best way to proceed?  See an attorney before embarking on any type of a real estate transaction or investment with a partner or before taking any money. Prepare an agreement whereby you clearly indicate what is or is not expected so that there can be no claims made in the future. In this way you alone will be king of the castle.