The Gay and Lesbian Couple’s Guide to Home Buying
For most gay and lesbian couples, buying a house together is not only an indication of a major commitment to each other, it is more often than not the most expensive single purchase you will ever make as an individual or as a couple. Because most property laws were written to protect individuals and married couples (who are viewed under the laws of many states as one entity) it is crucial that as gay and lesbian couples we understand that we must create the contractual and legal documentation which will provide us with the protection granted automatically to married couples. If these simple protections are not created, the death of yourself or your partner may result in a new partnership with family members of the deceased. Sometimes that’s not a bad thing…sometimes it’s a disastrous burden for a grief-stricken survivor!
If the general rule of purchasing real estate is “Location, location, location” then the gay and lesbian rule of real estate should be “Get a lawyer, get a lawyer, get a lawyer! And only a real estate lawyer…preferably one who already understands the critical issues of gay and lesbian property ownership.
Here are a couple of major pitfalls to be aware of when purchasing property as a same gender couple:
If you want your rights to your property to go only to your partner immediately upon your death and outside of probate, you must take title to your property by JOINT TENANCY WITH RIGHT OF SURVIVORSHIP…not individually and not just by joint tenancy. Taking title any other way will require probate upon your death and may result in the deceased partner’s “heirs at law” becoming owners of the property along with the surviving partner. The heirs may then sue for partition and force the surviving partner to sell or move out of the property.
In some states special laws called “Homestead laws” protect the rights of a spouse and/or minor children of a married person or a parent. These are not to be confuse with “Homestead exemptions”, which refer to taxation. If you were previously married, then you later purchase property with your partner, but your divorce was not finalized or was flawed, your former spouse may have rights to your property…your minor child may also have rights to your property even if the divorce was finalized. If your former spouse has custody of your child, you may be dealing with your former spouse as a partner in real estate ownership again because of his or her status as guardian for your child if you are not careful with how you take title to your property.
Sometimes one partner may have significantly more money to invest in a property than the other partner. Unless the partner with more money invested in the property is willing to share 50/50 with the other partner, consideration should be given to other forms of protecting each persons interests. 50/50 partnership may not be possible or desirable under certain circumstances. Sharing a home together is often more important than the percentage of ownership each partner has in their home. Perhaps one partner already owned the home in which a new couple is living. If the real concern is more about the security of the partner who has no ownership interest in the home, then provisions to protect the security of the non-owning partner might be more easily made by one’s will rather than by changing the title. Get good gay-friendly and gay-knowledgeable legal advise before you purchase property with your partner.
Equally important as deciding how to take title to a property is deciding the smaller issues such as:
- How do we pick a competent real estate agent?
- How do we know which neighborhood is gay-friendly?
- How do we know that the banks and insurance companies won’t deny our applications because we’re both of the same gender?
The first step in answering all three of these questions is to familiarize yourself with the gay community in the area where you plan to move. Don’t be afraid to ask questions of anybody. Negative responses to your questions (or your sexuality) can be just as informative as positive ones when you are trying to get the scoop on local attitudes. Sometimes a friend in the area can give you all the local information you need. Sometimes the internet and internet chat rooms can be helpful. Bars and book stores (all kinds) generally carry local gay papers which will fill you in on what’s happening in the community and may even have ads for local real estate agents. In Charleston, SC the best source of information is The Alliance for Full Acceptance at www.affa-sc.org. AFFA has a full -time staff ready to assist the LGBT community at any time.
Be aware that just because a real estate agent advertises in a gay paper or can be linked to from a website doesn’t mean he or she is a competent real estate professional. By the same token, just because a real estate agent is gay does not necessarily mean that he or she is familiar with gay and lesbian legal issues affecting real estate. They don’t teach that stuff in Real Estate School! Get names of agents from every source you can, but ask around about all the agents before you call one. Internet rating sites can be helpful, but unfortunately there is absolutely no verification of the statements made about agents/vendors on sites like Angie’s List. It is a good idea to weigh all reviews together rather than to be concerned about one particularly negative review. Disgruntled employees and ex-spouses can submit reviews to these sites and you’ll never know if they are true or not…and agents cannot have the bad reviews removed without the permission of the reviewer. It’s better to look at ALL the reviews and do your own internet research to get a general idea of the level of an agent’s integrity.
It is important to understand that most states require real estate agents to educate clients and customers as to the agency relationships allowed in that particular state upon their initial contact. South Carolina Association of Realtors requires a written contract between any real estate agent and any party he or she represents. Make sure you understand whether you are considered by the agent to be a client or a customer. An agent has obligations to a client under the law that he doesn’t have to a customer. It is critical that you understand those relationships and obligations before you discuss confidential information with a real estate agent. He or she may not be representing you at all and may be required under the law to disclose anything you say to the party that he or she does represent.
Finding a gay-friendly neighborhood is often the easiest task in moving. If you can’t find a gay-friendly neighborhood, get directions to the nearest historic district. It’s a safe bet you’ll be as close as you’re going to get on the first try! Take note of whose real estate signs are in the neighborhood and ask around about the reputation and integrity of these people before you consider calling them. The company with the most signs may not be the company that is going to give you the best representation. Sometimes the smaller firms are the best choice to represent you because they perhaps don’t subscribe to the large corporate mentality of emphasizing volume sales over client representation.
Competent real estate agents will have good banking, legal, home inspection and insurance contacts. Ask the bankers how they view applications from same gender couples and if they will allow your partner to insure his or her belongings (contents) under your homeowner’s policy if his or her name is not on the deed and the mortgage. Ask the lawyer what he knows about protecting gay couples. If they don’t mention the Joint Tenancy with right of survivorship issue, get another attorney. Also know that while LGBT couples can make legal agreements between themselves, there is absolutely no law in many states that requires ANY third party to be bound by those agreements. Remember this when you are drafting healthcare powers of attorney and similar documents. Contrary to what many uninformed attorneys will tell you, just because you and your partner make an agreement does not make it law.
Ask the insurance people if the companies they represent will insure your partner’s contents if you do not plan to list your partner on the deed or the mortgage. If the answer is no, then your partner will be required to purchase a renter’s policy to cover his or her contents. This means two deductibles in the event of a loss that affects both of you…one for you and one for your partner. This can be substantial in the event of a hurricane where some insurers now have the right to increase their deductibles to as much as 4% of the policy limit for coastal communities in the event of a declared hurricane ($4,000 on a $100,000 policy, plus 4% of your partner’s policy limit). If you are planning to insure your cars with the same company that has your homeowner’s insurance, ask if the companies they represent give a multiple-car ownership discount to same-gender couples. State Farm doesn’t…Traveler’s and some others do.
Don’t be afraid to demand what you need in making the biggest investment of your life and don’t be afraid to demand what you need to protect it. There are important differences for gay and lesbian couples when it comes to buying and protecting our property that married couples would never even have to consider. The laws were written for them, not for us. Gay and Lesbian home buyers must go the extra step to protect themselves, both under the law and from the law.