By Stephanie Reid, Avvo attorney and NakedLaw contributor
You’re in love. And, after careful consideration and heartfelt discussions, you and your significant other have decided to take a leap of faith and move in together. After all, your dogs already get along, and the apartment you’re renting is big enough for two and closer to your partner’s work. What could possibly go wrong?
Sorry to burst your bubble, but the answer is: a lot. While deciding to cohabitate may seem like nothing more than making a little extra space in your sock drawer, there are serious considerations to discuss. Here are five reasons why ironing out the details beforehand and drafting a cohabitation agreement is the savviest way to protect you and your partner if things begin to unravel.
1. Avoid breaching your lease
A lease agreement is a type of contract allowing either party the opportunity to seek damages (i.e., money) if its terms are not followed. If you are renting on your own, your lease agreement is between you and your landlord only. In other words, your new roommate is not protected by the terms of the agreement, and vice versa for the landlord.
Many leases contain a clause requiring notification or written approval prior to moving in a new tenant. Even if yours doesn’t, the smartest move is to speak with your landlord or property manager about drafting a new lease agreement with your partner’s name added to the contract. That way, everyone is protected and legally bound in the event an issue arises.
Also, keep in mind that if your lease requires written permission from the landlord and you fail to follow that step, your landlord is within his rights to terminate the lease, leaving you, your partner and all your belongings without a place to call home.
2. Safeguard your stuff
Another recommended step prior to moving in together involves adding your partner to your renters insurance policy or asking your partner to obtain his or her own renters insurance policy.
Generally considered an inexpensive risk management tool, renters insurance protects the policyholder from financial loss in the event of fire, water damage, mold or robbery. However, a policy only protects the belongings of the policyholder. Therefore, if you are robbed and your partner’s expensive jewelry is targeted, you will likely be unable to recover the value of these items if he or she is not listed on the policy.
3. Decide who owns what
This can be sticky, and a bit unromantic, but a cohabitation agreement should clearly describe who owns and is responsible for any high-value belongings in the home. No one expects to break up, but this sort of agreement can ease an otherwise emotional situation if things do go south.
Decide in the beginning about things like furniture, electronics, jewelry and especially the family pet. In the event the relationship doesn’t work out, both parties and Fido will be at ease knowing the property distribution is fair and was agreed upon when emotions were stable.
4. Determine who owes what
Combining your lives often necessitates combining your finances, and deciding at the beginning who owes what each month is a smart and reasonable way to decide on expenses like rent, utilities, groceries and debts. Some couples choose to divide everything 50-50, while others try to avoid the topic altogether, which often leads to resentment by the partner bearing the brunt of the bills.
Working out debts is a great way to avoid a major headache if the relationship sours, particularly if both partners are listed as guarantors on the credit agreement. In this event, both partners will be on the hook to the lender or creditor, but the agreement can serve as evidence of responsibility in the event that one party decides to vengefully default post-breakup.
5. Protect yourself in the event of a breakup
No couple sets out to break up, but it does happen. And it helps to be realistic from the beginning about the possibility that living together might not work out. If you and your partner are both on the lease, your cohabitation agreement should state who will maintain residence in the apartment if you break up, as well as a reasonable time frame within which the remaining partner agrees to remove the ex from the lease. Failure to remove the former partner from the lease technically means an ongoing duty to pay rent and uphold the lease obligations, which could create a major issue if the breakup is exceptionally acrimonious.
One caveat to this, however, is the possibility that the landlord may not allow for the removal of the person moving out until a new lease term begins. For that reason, it’s important that the cohabitation agreement states that the party living in the apartment agrees to pay full rent in the event the relationship dissolves. It may help avoid liability if the resident chooses not to pay the rent and the landlord comes after the non-resident for damages.
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Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.
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