Unmarried couples can also buy a property together. However, couples should protect themselves in the process. In this blog post, we explain what you should bear in mind when buying property as a couple.
Marriage is not a prerequisite for buying a property. In contrast to marriage, however, cohabitation does not provide coverage for unforeseen life events such as death or separation. These risks must be covered, especially when buying property. Basically, there are three possible forms of ownership available to the couple.can choose between sole ownership, joint ownership and co-ownership. It is advisable to draw up a cohabitation agreement as a basis for all three forms of ownership.
In the case of sole ownership, the property is acquired by only one buyer. This person is entered in the land register as the sole owner and is solely liable for the mortgage debt. The second cohabiting partner has no legal interest in the property, but can agree a rental and maintenance obligation with the owner under a tenancy agreement. Sole ownership is recommended if only one partner has the financial means for the purchase. However, in the case of sole ownership, the uninvolved cohabiting partner is not covered at all for the risks of death and separation. A tenancy agreement, however, would specify his or her tenancy rights, the rent and the terms of termination.
In joint ownership, the property is purchased by both partners. This means that both parties are registered as owners in the land register without specifying who owns which parts of the property. The basis for the purchase in joint ownership is the formation of a simple partnership consisting of the two partners. Only in this way is joint ownership valid under Swiss law. The partnership is also registered in the land register. Both owners can fully dispose of the property, which at the same time means that all decisions must always be made unanimously. In the case of joint ownership, one party can therefore block all decisions. The two owners are also jointly and severally responsible for the property. Another problem is that with this form of ownership it is not possible to make advance withdrawals of pension assets.
The last of the three possibilities is the acquisition of a property in co-ownership. Here too, both cohabiting partners own the property. In contrast to joint ownership, however, the land register indicates individually who owns the property and in which shares. Likewise, each owner can freely dispose of his or her share. The ownership shares are entered in the land register in fractional form. In most cases, ownership is determined according to the financial resources contributed, e.g. 1/3 and 2/3 co-ownership. The obligations towards the property are normally also distributed according to these quotas, as is the case with maintenance costs. In principle, the two owners can freely dispose of their shares. However, this is difficult in the case of a sale. If one party wants to sell his or her shares, it is usually difficult to find a buyer for a co-ownership. In addition, the other co-owner has a legal right of first refusal: if one wants to, one can become the sole owner of the property before another buyer is brought on board. Here, too, both owners are jointly and severally responsible. In contrast to joint ownership, in the case of co-ownership pension funds can be withdrawn in advance for the purchase of the property. The majority of experts recommend the form of co-ownership for a property purchase in a cohabiting couple.
Additional recommendation: cohabitation agreement
Regardless of which form of ownership you prefer, it is always advisable to sign a cohabitation agreement. This creates clear conditions and rules. Such a contract can be drawn up in writing and signed by the partners. Among other things, the following points can be stipulated in it:
- Who will own the house or flat
- Which form of ownership is chosen
- Who will contribute how much of their own funds to the purchase
- How the maintenance costs will be distributed
- How decisions will be made
- What is to happen in the event of separation or death
- How to set a deadline for moving out in the event of separation, selling the property or taking over the property