Thursday, February 22, 2018

LIVING TOGETHER RELATIONSHIPS... WHAT REAL ESTATE BROKERS NEED TO KNOW...


Oh, our wonderful legal line program through out firm that we have in place, brings forth questions that in many cases, we would never expect to receive. One question came in a while back regarding parties who want to co-own some real estate.

Such questions are the bread and butter of our real estate law practice. But, as we suggested that the folks come in and talk with us, we quickly determined that this was not just an ordinary “co-ownership” or “co-tenancy” or LLC or Real Estate or anything like that. THESE PEOPLE WERE LIVING TOGETHER!!!

Game changer? ABSOLUTELY.  A real strong yes. You see, this raises several issues that our real estate partners are seeing daily. Thank goodness you do not have to legally advise folks who are choosing to own property together about their legal rights that you would want to know the state of the law in Washington State on what we used to call: “Meretricious Relationships”, but the term of art today in Washington State is….

COMMITTED INTIMATE RELATIONSHIPS

We review in this industry update a recent case that came down in 2017 from the Court of Appeals (Division 1) up in Seattle. This is the case that I used with the recent folks that were referred by one of you as I found that case on point AND it really gives our readers a primer on how the courts in Washington treat unmarried co-owners of property. You may be surprised. Read on……

MORGAN v. BRINEY (Division 1, 2017)
*****The Morgan/Brinley relationship started in 1987 resulting in them living together since 1990.
*****In 1992, they separated but continued to “date”.
*****They moved back living together and purchased a home in 1995 that only one name, Mr. Briney, was on title. The male party Briney was also the only one liable on the loan and it was only Mr. Briney that made the down payment out of his own funds.
*****Tensions arose about remodeling their new home and Morgan moved out for 8 months.
*****She (Morgan) moved back in and they collaborated about the remodeling, but Briney paid for all the remodeling work and most of the living expenses as well.
*****In 2013, Morgan moved out and initiated an action to divide the property.

WHAT IS A COMMITTED INTIMATE RELATIONSHIP ACCORDING TO THIS COURT OF APPEALS?
The court said that a committed intimate relationship exists when there is a stable, marital-like relationship where both parties co-habit together with knowledge that a lawful marriage between them does not exist.
If such relationship DOES exist as determined by the court, it evaluates the interest that each party has in the property acquired during the period of the relationship, and then makes a just and equitable distribution of such property.
The court found, that by the time that they purchased the house together, they met the above test.
It did not matter much to the Court that Mr. Briney deposited the down payment. It didn’t matter that Mr. Briney was the only one on the mortgage loan. It didn’t matter to this Court that Ms. Morgan’s name was NOT even on title!!! She was not obligated in any manner for any obligation for the home.  Morgan paid for nothing.
The courts’ analysis:
A.   They had been living together months before the house purchase.
B.   They looked for the house together.
C.   They agreed together to buy a house that needed work.
D.  They moved into the house together.
This case, I believe, illustrates for all of us in the trade that as we progress in the future many more of our customers and clients will be entering these kinds of relationships, attempting to avoid some of the traps of marriage.  There are traps for the unwary as there are traps for parties that enter marriage relationships.
Parties entering into such committed relationships need to know that this case really illustrates the uncertainty that exists in the division of property arising out of committed intimate relationships, and the value that can arise from parties entering into a written agreement relating to the characterization of property co-owned notwithstanding the fact that they are not married. The parties in this case did NOT have any written agreement at all.

PRACTICE POINTER: Always encourage your clients, who are purchasing property together, to talk with a competent real estate attorney and draft an agreement between them that will OVERCOME the uncertainties that Morgan and Briney experienced when the courts determined how their property was going to be divided. These co-ownership agreements are not expensive and can be of real value when parties may need to separate sometime in the future.

You have the option to read this opinion below:
2017 WL4369547 (Div. 1, 2017).

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