Buying a house – what couples should consider when financing

Real estate agent Kassel blog posts

If you move in together as a couple, or get divorced the question arises how to divide the assets properly. If you move in with your partner and want to buy a house or apartment together, you will stumble over this hurdle at the latest when you sign the loan agreement. The situation is similar in the case of separation. In this article we will go step by step through the process of moving in together, as well as the separation of the partnership with all its contingencies.

The most important facts in brief:

In general, whoever is in the land register of a property is also the owner of this property. Even if you live in a marriage, or both partners have signed the loan agreement.

If you buy a house unmarried it makes sense that both partners are registered in the land register. In case of a separation of a marriage, the real estate is divided in the course of the community of gains.

In the event of the death of an unmarried partner, unless otherwise agreed in the will, the relatives and any children from a forthcoming marriage are entitled to the inheritance and thus also the property.

Buying a house unmarried – Who owns the property without a marriage certificate?

Unmarried buy a house - Who owns the property - contribution picture

If you buy a house unmarried with your partner, you are free to decide who should own the property. The only important thing is that the respective person, or persons are in the land register. The one who is registered in the land register is also the legal owner of the property, regardless of whether you take out a loan agreement as a couple or not.

Due to this fact, you should clarify before buying a house, which of you should own the property. It is also possible for the two of you to be registered in the land register. This has the advantage that both partners are the legal owner of the property. In the event of disputes over ownership, the situation is already legally regulated by the land register.

A disadvantage that comes along with the registration of two persons in the land register is that both parties have to agree in case of a sale.

Especially in the case of disputes, or a separation of the partnership, it may be that one partner wants to continue to live in the property and the other would prefer to release the property for sale. If it is not possible to reach a private agreement, this must be settled in court. Despite this fact, both partners are usually registered in the land register.

Unmarried buy a house and marry afterwards – What to consider?

What couples should consider when financing - Is a joint entry in the land register necessary? - contribution image

If you move in together with your partner and buy a property, there is a high probability that this will be followed by marriage. But what about the purchased property in this case?? What to pay attention to? We clarify!

When you get married, you have the possibility to regulate your property relations by a marriage contract. If a regulation of the property relations by a marriage contract is missing, they live in a so-called "Zugewinngemeinschaft" ( 1 §1363 Abs. 1BGB).

All assets that you bring into the marriage are also after the marriage still in your possession. The same applies to an acquired property.

Therefore, if only one partner registers in the land register of the property before marriage, he or she remains the sole owner of the property during and after the marriage.

It is not uncommon for married couples to believe that with the marriage, the property now belongs to both spouses. But this is not correct. Only assets that are gained during the marriage, must be compensated after a possible termination of the marriage.

So if you want to buy a house together before marriage, it is advisable that both partners register in the land register. In this case both parties are joint owners also during and after the marriage.

Buying a house when married – What to consider?

If you are buying a property as a married couple, the most important thing is whether you have signed a marriage contract or not. If you have concluded a contract, you should check the terms of the contract before buying a house to see who is granted which ownership rights.

If you have not signed a prenuptial agreement, you have two different options when buying a property.

1. Both partners are registered in the land register

In most cases, couples register their property jointly in the land register, primarily for emotional reasons. Everyone wants to be a homeowner. According to Focus, the rate for owner-occupied real estate is almost 100 percent (see sources).

Nevertheless, a joint entry in the land register has its advantages and disadvantages. As long as the marriage is going well, it does not matter who now owns the property. The legislator regards the property as a so-called "matrimonial home" and grants both partners the right to live there regardless of the ownership situation.

The entry in the land register only becomes relevant in the event of a divorce. In this case, the question arises as to which of the partners may keep the property. Ultimately, both parties own half of the house and in most cases the parties do not have sufficient assets to buy their half from the other partner. In this case, you must reach a joint agreement on the property.

2. One of the partners is registered in the land register

If only one of the partners is registered in the land register during the marriage, this partner is also the decision-maker as to whether and when the house should be sold. In this case, the partner can sell the property both during and after the partnership without the consent of his better half.

If you want to minimize this risk during the marriage, it is possible to register a right of first refusal as a partner. However, this right of first refusal may only exist until the divorce takes effect. Subsequently, the partner who is entered in the land register can decide alone whether to keep or sell the property.

Despite this fact, only one person in the land register also brings some advantages. In this case, you as a partner do not have to be afraid of being overcharged.

Just like all other assets acquired during the marriage, the real estate is also taken into account in the event of a divorce due to the community of joint gain. An exceptional case exists if you have otherwise regulated the distribution of assets in the marriage contract.

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