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Home equity?

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In-AZ

Junior Member
ArizonaWhat is the name of your state?

My cousin is in a live in arrangement with her boyfriend. She now wants to call it quits. They purchased a home together but are not married. He made nearly all the mortgage payments over the 9 months they were together as well as paid all utilities, put in a pool and many upgrades to the house. Does my cousin have any recourse in getting a percentage of the equity in the house?
 


LdiJ

Senior Member
In-AZ said:
ArizonaWhat is the name of your state?

My cousin is in a live in arrangement with her boyfriend. She now wants to call it quits. They purchased a home together but are not married. He made nearly all the mortgage payments over the 9 months they were together as well as paid all utilities, put in a pool and many upgrades to the house. Does my cousin have any recourse in getting a percentage of the equity in the house?
If they have owned the home for less than a year there probably isn't much equity, even with the upgrades.....and those upgrades were probably financed anyway.

However, if she is on both the deed and the mortgage, then he is definitely going to have to refinance to buy her out. She will find out when its appraised whether or not the home has any real equity.
 

In-AZ

Junior Member
The deed and mortgage is in both names. The equity is about 60K from what she tells me. Also, she says he put in 45K in pool, spa, landscaping, etc. all paid in cash. Does that factor in to the amount of equity since those improvements drove up the equity? My cousin is not trying to be greedy, just wants it to be fair.
 

LdiJ

Senior Member
In-AZ said:
The deed and mortgage is in both names. The equity is about 60K from what she tells me. Also, she says he put in 45K in pool, spa, landscaping, etc. all paid in cash. Does that factor in to the amount of equity since those improvements drove up the equity? My cousin is not trying to be greedy, just wants it to be fair.
Ok...if we are going to talk pure fairness....who provided that equity? She hasn't paid the mortgage payments, she didn't provide any of the upgrades.... Did she provide any of the downpayment? Did she pay other bills that he normally should have shared but didn't because he was paying the mortgage? How much of that equity is due to appreciation?

Pure fairness would indicate that she should benefit to the extent of her financial participation. Whether he refinances to get her off the loan/deed or whether the house is sold to get her off the loan/deed.

However...legally the home is half hers...and since they were never married and presumably had no contract of any kind, she is entitled to half of the equity.
 

BelizeBreeze

Senior Member
LdiJ said:
However...legally the home is half hers...and since they were never married and presumably had no contract of any kind, she is entitled to half of the equity.
Not in this case.
Under the Property Code of Arizona the Judge is directed to look at the equity interests of both parties upon petition for partition. Based on the statutes, the owners would split the proceeds proportionate to their interest in the property.

So adding his investment in the property and her investment separately then establishing their fair percentage of the equity on that basis would give a clearer picture of where negotiations should be directed to preclude such an action.
 

LdiJ

Senior Member
BelizeBreeze said:
Not in this case.
Under the Property Code of Arizona the Judge is directed to look at the equity interests of both parties upon petition for partition. Based on the statutes, the owners would split the proceeds proportionate to their interest in the property.

So adding his investment in the property and her investment separately then establishing their fair percentage of the equity on that basis would give a clearer picture of where negotiations should be directed to preclude such an action.
I agree from the point of fairness...I can even see the chance of a judge making a decision based on "fairness".

However, as an accountant...who deals with ownership issues and property between unrelated parties...I am not sure that a judge could make a ruling (that would hold up on appeal) dividing it any other way than 50/50 unless specific ownership shares were established contractually.

Naturally, if they weren't romantic partners they would have been likely to set up the purchase based on "shares". However property and property ownership is very well regulated by law. Absent a contract, or a credible verbal contract...I am not sure that I can agree with you on this one.

They are both on the deed, they are both responsible for the mortgage. If the guy could prove that he advanced the monies for the mortgage payments and improvements as a "loan" to the gal...heck yes....but again, that implies either a written contract or a credible verbal one.

However....everything points back to "fairness"....and if OP's cousin is "fair" then she shouldn't attempt to benefit from anything more than her participation in the property.
 

BelizeBreeze

Senior Member
LdiJ said:
I agree from the point of fairness...I can even see the chance of a judge making a decision based on "fairness".

However, as an accountant...who deals with ownership issues and property between unrelated parties...I am not sure that a judge could make a ruling (that would hold up on appeal) dividing it any other way than 50/50 unless specific ownership shares were established contractually.

Naturally, if they weren't romantic partners they would have been likely to set up the purchase based on "shares". However property and property ownership is very well regulated by law. Absent a contract, or a credible verbal contract...I am not sure that I can agree with you on this one.

They are both on the deed, they are both responsible for the mortgage. If the guy could prove that he advanced the monies for the mortgage payments and improvements as a "loan" to the gal...heck yes....but again, that implies either a written contract or a credible verbal one.

However....everything points back to "fairness"....and if OP's cousin is "fair" then she shouldn't attempt to benefit from anything more than her participation in the property.
This has NOTHING to do with fairness. It's a matter of state statute. You know, a little thing called LAW?

She had better negotiate or partition will divide the property according to the requirements put forth in the Property Code, which DIRECTS the hearing authority to divide the property according to the contributions of each party.

From the original post, it looks like the boyfriend has at least a $20,000 headstart if not the ability to claim every penny of the equity.
 

LdiJ

Senior Member
BelizeBreeze said:
This has NOTHING to do with fairness. It's a matter of state statute. You know, a little thing called LAW?

She had better negotiate or partition will divide the property according to the requirements put forth in the Property Code, which DIRECTS the hearing authority to divide the property according to the contributions of each party.

From the original post, it looks like the boyfriend has at least a $20,000 headstart if not the ability to claim every penny of the equity.
Can you link me to the property code for AZ?...I would like to read it. If AZ addresses that it would be a good model for other states. I get a bit involved in those issues on a lobbying/legislative basis.
 
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BelizeBreeze

Senior Member
ARS 12-1222. Partition of personal property; parties

Occhino v. Occhino, 793 P.2d 1149, 1151 (Ariz. Ct. App. 1990).

Masayesva v. Zah, 816 F. Supp. 1387 (D. Ariz. 1992).

Have fun doing the homework ;)
 

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