What are my roles and responsibilities as the 'tenant' of a 'landlord' who is also my partner?
October 9, 2011 3:31 AM Subscribe
My girlfriend wants to buy a house for us to live in – what are my roles and responsibilities as the 'tenant' of a 'landlord' who is also my partner?
My girlfriend and I are both in our late 20s, we’ve been together for two years and we’ve been renting a flat together for nine months. We earn the same amount but she has ~5 times more than me in savings because she has an interest in finance etc., while I took a bit longer to ‘grow up’ and be financially responsible. I am responsible now and have savings and a steady (beginning of a) career, but I’m by no means wealthy. I’m quite happy renting for the time being as I can’t afford to buy a house, and am not at that point in my life where I want to buy.
My girlfriend has been doing her research and wants to buy (mortgage) a house in the next twelve months or so, and has asked me to live with her in that house. She has asked my opinion about locations, what facilities I would like, etc., but we are both very clear that this would be her purchase, her decision, her house. (We’re aware that there may be some legal issues around being a de facto couple and her having a mortgage, etc. but she is still at the early stages and we’ll address these when we get there.)
My questions are about my financial (and ethical) responsibilities as a ‘renter’ in my partner’s home – she is effectively the landlord. Should my monthly rent be half of her monthly mortgage payment? Or whatever the typical rent is for a property of that type when owned by a landlord, whether that’s higher or lower than the mortgage? My current landlord is responsible for organizing maintenance and paying maintenance costs, for paying council rates, ensuring that boundary fences are maintained, responsible for the garden and for mowing and maintaining the nature strip, among other typical landlord responsibilities. How do I navigate these issues and responsibilities when my de facto partner is the landlord?
If anyone has suggestions on how to approach this topic, advise on what’s standard procedure or experience with this situation I’d be very keen to read.
We live in Australia, if that helps. Thank you!
My girlfriend and I are both in our late 20s, we’ve been together for two years and we’ve been renting a flat together for nine months. We earn the same amount but she has ~5 times more than me in savings because she has an interest in finance etc., while I took a bit longer to ‘grow up’ and be financially responsible. I am responsible now and have savings and a steady (beginning of a) career, but I’m by no means wealthy. I’m quite happy renting for the time being as I can’t afford to buy a house, and am not at that point in my life where I want to buy.
My girlfriend has been doing her research and wants to buy (mortgage) a house in the next twelve months or so, and has asked me to live with her in that house. She has asked my opinion about locations, what facilities I would like, etc., but we are both very clear that this would be her purchase, her decision, her house. (We’re aware that there may be some legal issues around being a de facto couple and her having a mortgage, etc. but she is still at the early stages and we’ll address these when we get there.)
My questions are about my financial (and ethical) responsibilities as a ‘renter’ in my partner’s home – she is effectively the landlord. Should my monthly rent be half of her monthly mortgage payment? Or whatever the typical rent is for a property of that type when owned by a landlord, whether that’s higher or lower than the mortgage? My current landlord is responsible for organizing maintenance and paying maintenance costs, for paying council rates, ensuring that boundary fences are maintained, responsible for the garden and for mowing and maintaining the nature strip, among other typical landlord responsibilities. How do I navigate these issues and responsibilities when my de facto partner is the landlord?
If anyone has suggestions on how to approach this topic, advise on what’s standard procedure or experience with this situation I’d be very keen to read.
We live in Australia, if that helps. Thank you!
Best answer: I think it depends on your plans for the future.
I recently bought a house with my partner; like you I had far far more savings than he did. In our case, we bought the house together; we have a "deed of trust", which says that legally if we sell the house, the amount of my original contribution (which was nearly all of the cost) goes to me, his goes to him, and any extra is split equally. (I'm in the UK, I don't know how it works in Aus).
Now we take roughly equal shares in the bills and maintenance costs, and he's been doing a lot of DIY.
If I was not going to involve that much commitment, I think I'd go with paying the market rate for half of a comparable sized house, half the bills, and doing exactly no non-trivial DIY unless compensated by something knocked off the rent. If there was any suggestion that I should contribute to the house maintenance (landscaping, redoing the bathroom, that kind of thing) then I'd be suggesting putting me on the house title first. Unless I really really enjoyed doing DIY for free.
That sounds like a sticky kind of agreement to be in with a partner, but I think being your partner's tenant is going to be sticky whichever way you cut it.
posted by emilyw at 4:01 AM on October 9, 2011 [4 favorites]
I recently bought a house with my partner; like you I had far far more savings than he did. In our case, we bought the house together; we have a "deed of trust", which says that legally if we sell the house, the amount of my original contribution (which was nearly all of the cost) goes to me, his goes to him, and any extra is split equally. (I'm in the UK, I don't know how it works in Aus).
Now we take roughly equal shares in the bills and maintenance costs, and he's been doing a lot of DIY.
If I was not going to involve that much commitment, I think I'd go with paying the market rate for half of a comparable sized house, half the bills, and doing exactly no non-trivial DIY unless compensated by something knocked off the rent. If there was any suggestion that I should contribute to the house maintenance (landscaping, redoing the bathroom, that kind of thing) then I'd be suggesting putting me on the house title first. Unless I really really enjoyed doing DIY for free.
That sounds like a sticky kind of agreement to be in with a partner, but I think being your partner's tenant is going to be sticky whichever way you cut it.
posted by emilyw at 4:01 AM on October 9, 2011 [4 favorites]
Sorry, last answer wasn't particularly enlightening. Is there any reason you can't formalise your lease in some way? If you assume responsibility for the property (eg fences, rates etc) it makes it difficult to later say that you weren't expecting some share of the property to be yours if things finish up.
I'm sure you don't like the idea of sitting idly by while your girlfriend has to sort out maintenance problems on her own. Maybe you could have some kind of mechanism for valuing extra help you provide in whatever agreement you make and adjusting rent accordingly.
posted by Trivia Newton John at 4:01 AM on October 9, 2011
I'm sure you don't like the idea of sitting idly by while your girlfriend has to sort out maintenance problems on her own. Maybe you could have some kind of mechanism for valuing extra help you provide in whatever agreement you make and adjusting rent accordingly.
posted by Trivia Newton John at 4:01 AM on October 9, 2011
In most places, this arrangement benefits you more than your girl-friend.
one big example is: If you contribute any money towards paying the mortgage, you can actually create a percentage of constructive ownership in the property. You girlfriend should have you contribute money only to the monthly utility bills if she wants to prevent this.
posted by Flood at 5:28 AM on October 9, 2011 [3 favorites]
one big example is: If you contribute any money towards paying the mortgage, you can actually create a percentage of constructive ownership in the property. You girlfriend should have you contribute money only to the monthly utility bills if she wants to prevent this.
posted by Flood at 5:28 AM on October 9, 2011 [3 favorites]
Far better for you buy the house together if you can. Could family help you out with your half of the deposit?
posted by JonB at 5:34 AM on October 9, 2011
posted by JonB at 5:34 AM on October 9, 2011
My mother and her partner do/did this. (They just moved, I'm not sure what the arrangement is now.) As I understand it, he pays a fixed amount each month (how they arrived at it, I don't know). My mother pays for the upkeep on the house, since it's her house. He does the grocery shopping (I'm not sure how they handle the money here) because he retired first. But, otherwise, they seem to split things the way couples might 'normally'. They both work on the house. Their new places needs a lot of work. Before they had some loose system as to who did what. His money also goes to things he wants to buy for the house that perhaps aren't strictly necessary, like a new toaster. Every so often, they total up who spent what and whoever is owed money gets paid (since who pays for an item is often a matter of convenience, rather than who is 'supposed' to be paying).
I don't know that they have a plan for if they split up, to be honest. They still pretty much have two apartments worth of furniture stashed places (I furnished a good chunk of my apartment out of my mother's garage) and know who owned what when the moved in together (at least in general terms). I do know that my mother's will has a provision for him to be able to remain in the house should she die first. (The house itself goes to me and my brother, but he is able to live there as long as he wants.) Maybe conventional people would have the house go to the partner, I don't know.
posted by hoyland at 5:52 AM on October 9, 2011
I don't know that they have a plan for if they split up, to be honest. They still pretty much have two apartments worth of furniture stashed places (I furnished a good chunk of my apartment out of my mother's garage) and know who owned what when the moved in together (at least in general terms). I do know that my mother's will has a provision for him to be able to remain in the house should she die first. (The house itself goes to me and my brother, but he is able to live there as long as he wants.) Maybe conventional people would have the house go to the partner, I don't know.
posted by hoyland at 5:52 AM on October 9, 2011
Best answer: I did this with a partner many, many years ago, in a different country. So, as noted upthread, there may be legal implications that apply to you now that didn't apply to me then. I don't know if there's a "standard" arrangement--it probably varies greatly depending on the finances of the two people and whether they see themselves as on the road to marriage or as life partners who just don't happen to have that piece of paper. The important thing is to arrive at an arrangement that seems fair to both partners in the event of
In our case, we reasoned that because in the event of a sale my partner would receive the proceeds from any eventual sale, that he should also contribute a greater portion of the mortgage expense. I think we may have agreed to split the taxes + interest portion of the mortgage payment, and he was responsible for 100% of the payment toward principle.
I also didn't worry about whether or not I'd recover the labor value of any work I put toward the house (in my case, things like sewing curtains and some painting work). I file those sorts of things under "acts of kindness you do for your partner" where it's just fruitless to think of them as something you need to be compensated for. Like, if your girlfriend owned a house and you weren't living together yet, yet you helped her retile her bathroom, would you really expect to somehow get paid back for that if you broke up? Would you expect to be paid for mowing her grass? I don't see it as any different if you're living together.
posted by SomeTrickPony at 5:58 AM on October 9, 2011 [2 favorites]
In our case, we reasoned that because in the event of a sale my partner would receive the proceeds from any eventual sale, that he should also contribute a greater portion of the mortgage expense. I think we may have agreed to split the taxes + interest portion of the mortgage payment, and he was responsible for 100% of the payment toward principle.
I also didn't worry about whether or not I'd recover the labor value of any work I put toward the house (in my case, things like sewing curtains and some painting work). I file those sorts of things under "acts of kindness you do for your partner" where it's just fruitless to think of them as something you need to be compensated for. Like, if your girlfriend owned a house and you weren't living together yet, yet you helped her retile her bathroom, would you really expect to somehow get paid back for that if you broke up? Would you expect to be paid for mowing her grass? I don't see it as any different if you're living together.
posted by SomeTrickPony at 5:58 AM on October 9, 2011 [2 favorites]
Best answer: I am doing something similar to hoyland's mother. I am in the U.S. where there are no de facto benefits; as it stands right now, my kids will inherit the house. He pays market rent*, a portion of the utilities (not half though, as having him here doesn't double their use). We combine grocery receipts & each pay a portion (again, not half, because he's only 1 of 4 in the house). Chores are not an issue; he does more because he only works part-time, but nothing is expected either way & we are both happy to do what needs to be done.
Home improvements are on my dime, but home purchases are split. For example, we recently tore up carpet and put down fake hardwood floors. I paid for the project, but we split the cost of the area rug we purchased after it was done. We also moved the washer/dryer upstairs, and I paid 100% of the plumber/electrician costs. He does more than his share of manual & skilled labor though. That's because he loves me ... and because not having 30-year-old cat-pee-stained carpet is an improvement in his living environment. It's my house, but it's his home.
*I suggest you pay market rent, not a percentage of her mortgage payment. If I knew someone else was going to pay half my mortgage each month, I might have put down a smaller down payment and gotten a larger loan & used my savings for something else. I bought my house independent of him and he's paying what he'd be paying to rent a portion of any other house around here. Probably a little less, but a fair amount. I don't think he even knows what my mortgage payment is.
posted by headnsouth at 6:28 AM on October 9, 2011 [3 favorites]
Home improvements are on my dime, but home purchases are split. For example, we recently tore up carpet and put down fake hardwood floors. I paid for the project, but we split the cost of the area rug we purchased after it was done. We also moved the washer/dryer upstairs, and I paid 100% of the plumber/electrician costs. He does more than his share of manual & skilled labor though. That's because he loves me ... and because not having 30-year-old cat-pee-stained carpet is an improvement in his living environment. It's my house, but it's his home.
*I suggest you pay market rent, not a percentage of her mortgage payment. If I knew someone else was going to pay half my mortgage each month, I might have put down a smaller down payment and gotten a larger loan & used my savings for something else. I bought my house independent of him and he's paying what he'd be paying to rent a portion of any other house around here. Probably a little less, but a fair amount. I don't think he even knows what my mortgage payment is.
posted by headnsouth at 6:28 AM on October 9, 2011 [3 favorites]
This is a really individual question, actually, depending on how formal or informal you both want the financial end of this relationship to be. Some couples feel more comfortable with a straight-down-the-middle, even-steven divvying up of all the house expenses; others feel more comfortable with a sort of "I'll pay more when I'm flush, you pay more when you are" kind of thing. Another couple I know was in a similar state as you -- one partner was making a good deal more money than the other -- and they decided that the one who was making more money would pay all the rent/mortgage, and the other would pay for all the utilities and food.
Your "roles and responsibilities" are whatever you both agree to them being. It may take one of those "okay, let's have a long talk about this" conversations, but the only rule for the conversation this time is that if whatever you decide to do genuinely works for you, then it's the right thing to do.
posted by EmpressCallipygos at 6:44 AM on October 9, 2011
Your "roles and responsibilities" are whatever you both agree to them being. It may take one of those "okay, let's have a long talk about this" conversations, but the only rule for the conversation this time is that if whatever you decide to do genuinely works for you, then it's the right thing to do.
posted by EmpressCallipygos at 6:44 AM on October 9, 2011
Best answer: Basically, you're talking about signing a sort of quasi-"pre-nup". The more you get written down in a contract (which is then signed by both and notarized, in duplicate!), the less there will be to fight about should you two break up.
Get a standard renter's lease contract (online, at office supply stores, etc... the wording is the important part, not the physical form blank itself). Alter as you two see fit. If the worst happens, you both will already know what happens with the house, and it won't become a tool to hurt each other with (even accidentally).
posted by IAmBroom at 7:01 AM on October 9, 2011
Get a standard renter's lease contract (online, at office supply stores, etc... the wording is the important part, not the physical form blank itself). Alter as you two see fit. If the worst happens, you both will already know what happens with the house, and it won't become a tool to hurt each other with (even accidentally).
posted by IAmBroom at 7:01 AM on October 9, 2011
The more you get written down in a contract (which is then signed by both and notarized, in duplicate!), the less there will be to fight about should you two break up.
This.
My brother bought a house "with" his partner many years ago -- his partner put in sweat equity and contributed to the utilities, etc., and was supposed to help with the mortgage payment. When that didn't happen, it basically ruined my brother's credit, as he was going into debt keeping up with the mortgage payments. (There were complications that I'm not describing here, but suffice it to say that my brother's now ex-partner was NOT contributing to the house at the end there, at all, and it screwed my brother over.)
So. Get it written down. Set clear expectations up front. Adjust them if you want to later, but write that down too.
posted by devinemissk at 7:33 AM on October 9, 2011 [1 favorite]
This.
My brother bought a house "with" his partner many years ago -- his partner put in sweat equity and contributed to the utilities, etc., and was supposed to help with the mortgage payment. When that didn't happen, it basically ruined my brother's credit, as he was going into debt keeping up with the mortgage payments. (There were complications that I'm not describing here, but suffice it to say that my brother's now ex-partner was NOT contributing to the house at the end there, at all, and it screwed my brother over.)
So. Get it written down. Set clear expectations up front. Adjust them if you want to later, but write that down too.
posted by devinemissk at 7:33 AM on October 9, 2011 [1 favorite]
Best answer: I agree that it's ideal that you write out a contract. Also please remind your girlfriend that if the mortgage is hers, she needs to be able to afford the whole mortgage payment herself! In the U.S., the lender will make that determination for her; e.g. if she is buying it herself, they'll calculate it using only her income anyway. Not sure how it works in Australia.
That being said, I don't have a contract. I own the home my boyfriend and I live in. He pays me a token amount each month which we do not call rent but instead call a gift. (This prevents the appearance of partial ownership.) Since I can pay the entire mortgage, I use this amount to pay extra into my principal. He generally pays the bills, even though they're in my name, and usually picks up the groceries and needed household stuff. It is very beneficial to him - he lives here on the cheap - but I don't mind. If you make the same amount as your girlfriend, I'd recommend just picking a number you both agree with, and gifting her that amount every month. '
As for typical landlord things, you both need to determine who's good at what. For us, that means that I'm very good at budgeting and bureaucracy, and he's quite good at changing lightbulbs and handyman things. YMMV. Just determine in advance what will need to get done as in any household, and split it equitably. Be prepared to make changes as life gets going!
posted by juniperesque at 7:49 AM on October 9, 2011
That being said, I don't have a contract. I own the home my boyfriend and I live in. He pays me a token amount each month which we do not call rent but instead call a gift. (This prevents the appearance of partial ownership.) Since I can pay the entire mortgage, I use this amount to pay extra into my principal. He generally pays the bills, even though they're in my name, and usually picks up the groceries and needed household stuff. It is very beneficial to him - he lives here on the cheap - but I don't mind. If you make the same amount as your girlfriend, I'd recommend just picking a number you both agree with, and gifting her that amount every month. '
As for typical landlord things, you both need to determine who's good at what. For us, that means that I'm very good at budgeting and bureaucracy, and he's quite good at changing lightbulbs and handyman things. YMMV. Just determine in advance what will need to get done as in any household, and split it equitably. Be prepared to make changes as life gets going!
posted by juniperesque at 7:49 AM on October 9, 2011
Best answer: My ex and I recently helped my daughter purchase a home--she has a partner who will contribute rent/gift/partial mortgage. Since we wanted this to be an asset for only her (and a soon to be infant)), we established an LLC (Limited Liability Company) which will be owned solely by her. We had her full support for this plan. This does not answer your question but is an alternative to the issue of establishing a passive equity interest. My suggestion is to pay a fair market rent, divide day to day tasks/expenses as appropriate, have her pay for capital improvements, major repairs and enjoy the house. if she wants you to establish equity she can do that by adding you to the title, mortgage and via contract establish your portion of ownership. I would clear up this issue now so there are no hurt feelings down the road. this is a discussion you need to have. Unknown and unknown assumptions can be killers.
posted by rmhsinc at 8:52 AM on October 9, 2011
posted by rmhsinc at 8:52 AM on October 9, 2011
My gf are in a similar situation: I own my house and she rents from me. I charge her roughly the same as she'd pay to rent a room in a house in my neighborhood, which is nowhere near 50% of the mortgage.
If we decided to make our situation permanent maybe we'd figure out something more equitable. But for now, should we go our separate ways it's still my house. I don't see any point in splitting finances 50/50 when long-term financial interest (and risk) is not also 50/50.
posted by coolguymichael at 9:13 AM on October 9, 2011 [1 favorite]
If we decided to make our situation permanent maybe we'd figure out something more equitable. But for now, should we go our separate ways it's still my house. I don't see any point in splitting finances 50/50 when long-term financial interest (and risk) is not also 50/50.
posted by coolguymichael at 9:13 AM on October 9, 2011 [1 favorite]
Just sit down with a lawyer and get advice on the various options that will protect both your inteterests and then you can work out how you want to do it.
Please don't be afraid to draw up a contract that covers things like repairs, and what happens should you break up etc. Two reasons - it forces you to actually discuss these things and make sure you're on the same page whilst you get on and it protects you both should your relationship end.
posted by koahiatamadl at 9:15 AM on October 9, 2011 [1 favorite]
Please don't be afraid to draw up a contract that covers things like repairs, and what happens should you break up etc. Two reasons - it forces you to actually discuss these things and make sure you're on the same page whilst you get on and it protects you both should your relationship end.
posted by koahiatamadl at 9:15 AM on October 9, 2011 [1 favorite]
I agree that market rate for 1/2 an apartment is fair, plus a division of utilities. Improvements and repairs are her responsibility. Write up an agreement about division of equity in case of separation. You can simply state the cost of the home, the downpayment, how you arrived at the rent, and what your expectations are about who has equity. You can run it by a lawyer, or not. A very simple (coffee-stained) document saved my investment in my home when I got divorced. Ownership doesn't have to be 50:50. You could be a 10 - 20% owner, if that would work.
posted by theora55 at 9:45 AM on October 9, 2011
posted by theora55 at 9:45 AM on October 9, 2011
I don't think you should do this as it puts your relationship at risk. Money causes a lot of break-ups. You could go in together and then pay her back half of the down payment, or rent a place together while you save up. Refinancing is extremely hard so you could be stuck as a "renter" for a very long time and if you break up you leave with nothing. The only cases where I have seen only one person of a couple buy a house work were when the other still rented an apartment and part of the house was rented out to others, and when both people each had separate houses and lived in one and rented out the other.
posted by meepmeow at 9:59 AM on October 9, 2011
posted by meepmeow at 9:59 AM on October 9, 2011
Are you intending that you will have equity in the home? If not, will that change if you get married?
My boyfriend and I bought a house together when we'd been dating for two years. He provided the entire deposit. We drew up an arrangement that we had notarized and put in a safe deposit box, stating that I would pay 1/2 the mortgage payment + $150 until I had paid back my share of the deposit, and that if we dissolved our relationship during that time, I would owe him the remaining share. But we also bought it as tenants in common, meaning that I owned half the house from the get-go.
My circumstances changed about three years in such that I wasn't making a lot of money any more, so we amended the agreement to pause my overage. Then we got married, and we amended the agreement again to say that nobody owed anybody anything and we just jointly owned this house.
posted by KathrynT at 11:36 AM on October 9, 2011 [1 favorite]
My boyfriend and I bought a house together when we'd been dating for two years. He provided the entire deposit. We drew up an arrangement that we had notarized and put in a safe deposit box, stating that I would pay 1/2 the mortgage payment + $150 until I had paid back my share of the deposit, and that if we dissolved our relationship during that time, I would owe him the remaining share. But we also bought it as tenants in common, meaning that I owned half the house from the get-go.
My circumstances changed about three years in such that I wasn't making a lot of money any more, so we amended the agreement to pause my overage. Then we got married, and we amended the agreement again to say that nobody owed anybody anything and we just jointly owned this house.
posted by KathrynT at 11:36 AM on October 9, 2011 [1 favorite]
I would port your current financial arrangement to the new place. So, whatever you pay in half the rent now, which is market rate, is what you'd pay there. In addition you'd split bills and groceries as you (presumably) do now. Your girlfriend would cover what the landlord currently covers in terms of maintenance, insurance, tax etc. You and she need a tenancy agreement that makes it clear you are essentially, a lodger and not an investor or part owner.
posted by DarlingBri at 12:58 PM on October 9, 2011
posted by DarlingBri at 12:58 PM on October 9, 2011
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posted by Trivia Newton John at 3:53 AM on October 9, 2011 [1 favorite]