DOMESTIC PARTNERSHIPS
By Andy Sirkin, Paul Melbostad  and Laura Stratton

Why should unmarried couples and domestic partners worry about real estate co-ownership issues?

Like a marriage, every domestic partnership or other non-marital relationship ends with either separation or death.  If it ends with separation, the former partners may not remain friendly.  If it ends with death, the surviving partner may not be friendly with the decreased partner’s heirs.  Either way, there may be a property dispute.  Non-marital relationships are unlike marriages in that there is no well-developed body of law to govern property rights following separation or death.  Resolving property disputes based on non-marital relationships can be expensive, time-consuming and personally destructive.  In addition, both the beginning and the end of an unmarried couple’s relationship can have income and property tax consequences which can be minimized or even eliminated with planning.

How does domestic partner registration affect real estate co-ownership?

Certain unmarried couples are now permitted to register with the State of California as domestic partners.  State registration is available to all same-sex couples, and to heterosexual couples if one of the partners is over 62.  Although the full legal effect of state registration is not yet known, certain important consequences have been established.

How does real estate “title” affect unmarried couples and domestic partners?

The "title" or form of ownership of real estate has a major impact on what happens to the property after the death of an owner or in a dispute between co-owners.  When you buy real estate, either alone or with another person, you need to decide how title will be held, and your decision will determine what is written on the deed to the property.  You will need to make this decision again, and to change the deed, if you choose to share individually-owned property with a new partner.  But while the manner of holding title as shown on the deed is important, it is not always the final determinant of how the property is owned.  When an owner is involved in a committed relationship, his/her behavior (and that of his/her partner) can change what happens to the property after death or in a breakup, and can override what the deed says.  For this reason, it is important to think about title to the property you own, and to plan for death and breakup, whenever there is a major change in your domestic life.

How do unmarried couples and domestic partners hold title to real estate?

Unmarried couples who have not registered in domestic partnership with the State of California usually hold title to real estate as joint tenants, as tenants in common, or in a living trust.  Beginning January 1, 2005, state-registered domestic partners will also be able to hold title as “community property” and “community property with a right of survivorship”.

Can sellers discriminate against unmarried couples?

Discrimination against unmarried couples is prohibited in California, but allowed in most other jurisdictions.  Federal law prohibiting housing discrimination based on “family status” has been held inapplicable to unmarried couples. (There have been several unsuccessful legislative attempts to broaden this law to include gay (but not heterosexual couples).  Federal law does prohibit discrimination against unmarried couples in credit transactions related to home purchases.  Of the 47 states that have housing discrimination laws applicable to sellers, 21 prohibit discrimination based on “marital status”, but only four of these (including California) have been held to include unmarried couples.