Couples often cohabitate before getting married and, many times, they live together in a home that is owned by one of them. It is important to understand what rights each party has to the home should the relationship ultimately end. Consider the example of Jane Fonda and Richard Perry who recently decided to end their eight-year relationship. Jane Fonda and Richard Perry call it quits after 8 years, by Ian Mohr, pagesix.com, January 24, 2017. The couple lived together, though never married, and are now selling their home which they purchased together in 2012. Since the home was purchased jointly, the former couple will presumably split the proceeds. This is not often the case for couples who live together but never married.
In many situations, one party may own a home prior to the relationship and, during the course of the relationship, the other party may move into that home. However, the cohabitation does not change ownership of the home. Thus, if the couple subsequently breaks up, the party who moved into the other party's home has no rights to that home. As such, if the home owning party decides to sell the home, the other party will have no rights to any of the proceeds. Conversely, if the home had been purchased jointly, such as with Fonda and Perry, each party will be titled to his/her share of the proceeds.
This situation can be further complicated if the parties ultimately get married, but the home stays in the name of the party who purchased it. Assuming the same facts above, if one party owned the home prior to the marriage, that home will be considered pre-marital/separate property not subject to equitable division in the event of a divorce. However, if the parties used marital funds to pay the mortgage on the property, a portion of the funds paid may be subject to equitable division. Any equity in the home as of the date of the marriage will remain that party's separate property, but any increase in equity made as a result of marital payments may be divided upon divorce. In situations such as this, a forensic accountant is often involved to help determine each party's share.
Thus, the fact of the marriage can change the outcome in this situation. A spouse paying toward the mortgage of a premarital home may ultimately have some rights to it upon divorce, where an unmarried, cohabitating partner would not. This is not to say that you should marry someone just so you may have some rights to a house. But, it is important to know your rights and proceed with that in mind if you are a in a cohabitating, but not marital, relationship.