About real estate: Unmarried buyers have special concerns when ‘taking title’ to new home

It’s usually best for unmarried co-buyers to take title as “tenants-in-common,” even if they plan to wed each other soon.

Q. My fiancee and I are planning to buy a house now because prices and interest rates are so low. When we eventually “take title” to the home, can we take ownership as joint tenants even though we don’t plan on getting married until she graduates from college next year?

A. You could, but it probably wouldn’t be a good idea. Although most buyers who are already married hold title to their homes as joint tenants, it’s usually best for nonmarried couples to take title as “tenants-in-common” -- even if they plan to tie the matrimonial knot soon.

If you and your fiancee take title as joint tenants, your half-interest in the home would automatically pass to her when you die. Likewise, her 50 percent stake would go to you if she died first.

Taking title as tenants-in-common instead would provide more flexibility. That’s because either owner who holds property through a so-called TIC arrangement can will or sell his or her respective interest in the home to whomever he or she wishes, without the approval of the other owner.

You should certainly take title as tenants-in-common if either of you has a child from a previous relationship and wants to ensure that the child, rather than your betrothed, eventually inherits your interest in the property. Most unrelated investors also choose the TIC option, so they can sell or give away their share whenever they wish.

I don’t want to seem unromantic, but taking title as tenants-in-common rather than joint tenants also could make things a bit easier if you purchase the house now but later decide to cancel the wedding. If the breakup got nasty and the two of you couldn’t agree to sell the place or keep it, either of you would have the right to sell the respective 50 percent stake without first getting the other’s approval.

Your real estate agent, the attorney or escrow officer who will close the deal, or a representative from the title-insurance company you select can provide more details.

Q. I signed a one-year lease last December for a unit in a small apartment building, and the lease makes me responsible for paying my water bill. All five of the units here are on a single meter. The landlord didn’t send me an invoice for my share of the water usage until late June, when I received a bill for $274 to cover all of my first six months. Do I have to pay this lump-sum bill, even though he failed to bill me on a monthly or semimonthly basis before?

A. Yes, you have to pay the big bill for the water that you have used during the previous six months even though you never received an invoice until recently.

I don’t know why your landlord hasn’t been sending bills on a more regular basis. Maybe it’s his policy to send one out every six months, or maybe he’s just a sloppy (and slow) bookkeeper. But either way, you admit that you used the water and that the lease requires that you pay for it. Failure to do so now could get you evicted.

If you don’t have enough cash to pay in a lump sum, the landlord might be willing to let you pay it in installments. Make sure to begin including an estimate of the monthly cost of water and other utilities you use when you budget for the future so you won’t be caught by surprise when those charges finally arrive.

Q. I enjoyed your recent column about how forming a basic living trust can allow a homeowner’s heirs to get their share of an estate quickly, without spending all the time and money involved in probate proceedings. But what if I simply signed a quitclaim deed to my current home over to my daughter, gave the deed to my attorney and ordered him not to give it to my daughter until I passed away? Wouldn’t this be easier and cheaper than forming a trust?

A. Your idea earns you an “A” for imagination, but an “F” in real estate law. That’s because all 50 states require that a quitclaim deed must be “unconditionally delivered” to the recipient while the deed grantor (that’s you) is still alive.

Giving the quitclaim to your attorney and instructing him to give it to your daughter upon your death wouldn’t pass legal muster because the deed would not have been delivered while you were still breathing. The house would instead wind up in probate court, preventing your daughter from getting control of the property until the judicial process is completed several months or years later.

REAL ESTATE TRIVIA: The beloved Empire State Building took nearly two years to construct and stands 1,454 feet tall. Doughnut-maker Krispy Kreme makes 7.5 million of its tasty treats every day: Stacked atop each other, those buns o’ fun would reach that same height in a mere 22 seconds.

Ÿ For the booklet “Straight Talk About Living Trusts,” send $4 and a self-addressed, stamped envelope to David Myers, P.O. Box 4405, Culver City, CA 90231-4405.

© 2012, Cowles Syndicate Inc.