Dear Penny: We’re Broken Up but Stuck Together in Our Home Due to COVID-19
In 2017, my boyfriend and I bought a house together. We were in a long-term and presumed lifelong relationship, so it was no crazier a decision than anyone’s to buy a house together. Now we’ve decided to break up.
The plan prior to the breakup was that the house would go on the market in June and we would relocate to another city together.
Due to the COVID-19 crisis (we live in a “hotspot”) it is a terrible, if not impossible, time to sell the house.
We put a lot of money and time into repairing and renovating the house, and neither of us wants to lose out on our investment. I put up more actual cash, but he put up more time and physical labor.
In an ideal world, he would just buy me out and take over sole ownership, but his financial situation does not allow for that. He’s thinking about renting all or part of the house and sending me that income, or some other manner of long-term payout.
Right now, we’re in a good place, and the breakup is mutual. But obviously, that might not last forever.
I guess my question is how do I get my name off the deed, but still secure my rights to some kind of income? I’m in way over my head here. I’m not even sure what I should be asking.
My natural reaction would just be to cut my losses and get out, but I’m pretty sure that’s not the right answer.
-Consciously Uncoupling From a House
Dear Consciously Uncoupling,
You bought a house with your partner and then broke up. What you have is a pretty common problem.
COVID-19 certainly complicates things. It stretches out your timeline, and it could make the situation even messier should one of you lose a job.
But the basic things you’ll need to do to break up as co-owners during the Coronavirus Era are the same things you’d need to do in regular times: One of you needs to buy the other one out. If you have a mortgage, that person will have to refinance in their name. Or you can both sell it to a third party.
You’ll need to work with an attorney to draft an agreement between the two of you for anyone to secure income from the property.
I don’t think I’m telling you anything that you don’t already know. But I suspect your instinct to cut your losses and get out stems from the fact that there’s no easy way to get out of anything right now.
All of us are mostly trapped at home. You probably feel especially stuck being in the house with your ex 24/7.
You want to make an exit plan. But everyone’s plans are stuck in limbo right now. You can’t even make lunch plans with a friend, let alone plan for new life chapters.
It isn’t surprising that you don’t know what questions to ask right now. You can’t ask for directions when you no longer know where you’re going.
So here’s a question to get you started: What do you want life to look like once we regain a sense of normalcy? And by that, I don’t mean when we return to the lives we led in 2019, but when we start emerging from our houses again.
Do you still want to move to a new city? Or do you want to stay put for now?
What would your goals be if you weren’t tied to this house? Once you’ve figured those out, you can consider how to adjust them based on your stake in this home.
Maybe that means selling sooner for a lower price. Or working together to recoup your investment and keeping both of your names on the deed for now. Since it sounds like you’re in better financial shape, maybe you could buy him out and then rent the house back to him.
You’ll have a better sense of your options if you talk to both a mortgage lender and an attorney — either remotely or once we can have in-person meetings again.
What’s good here is that it sounds like you’re both acting reasonably. So your No. 1 goal is to keep it amicable. That could be a challenge if you’re still social distancing from the same home in a couple months.
Focus on what you plan to do post-pandemic, even though the timing is out of your hands. You will get out of this situation. We just don’t know when.
Robin Hartill is a certified financial planner and the voice behind Dear Penny. Send your tricky money questions to [email protected].
