If you’re ready to make the leap into property ownership, there are some advantages and disadvantages to doing so as a polycule. For the purposes of this blog, we are talking about your chosen family buying and inhabiting one dwelling together. We’ll cover hybrid rental/ownership and the topic of creating extended intentional communities in future posts.
The advantages to group home ownership can be great; you’re building equity, there’s no landlord (who might be biased against your non-monogamy), and you have much more power over making physical changes to ensure the home meet the needs of the people in the polycule. If you’re splitting the mortgage amongst more than two incomes, you also have a much easier time finding a place that you can afford that fits your lifestyle. Basically, all of the normal perks of home ownership, plus a few extra.
Questions to consider
Since buying a home usually involves a significant amount of money, it is important to think about this seriously before you move forward with co-buyers. Are you going to contribute equal amounts or proportional to each person’s income and assets? Are all of the people in your polycule reliably paying their bills (and have you been together long enough to know)? Maybe don’t agree to buy a house with your legal spouse of 20 years and your new partner of 3 months? Things like marriage can also seriously change up the legal dynamic in a community property state like Texas; you may need to consider a post-nup if there are some legally married partners and some not-legally-married partners. What if one person is contributing unpaid caregiving for the household and you are counting that as your contribution? What if you add another partner to the household. What happens when financial situations change? Can you discuss and agree on what happens when you break up? The details on how you choose to set up the contracts will differ from group to group and should include a plan for what happens if you can no longer own the property together.
The legal side of a group purchase
The law in Texas already allows for multiple individuals buying a property together. You could also form a corporation or a trust to buy the property too (if you need a mortgage for a purchase, you should check with your financial institution about their lending policies with various legal entities).
With polycule home ownership, there are all of the normal disadvantages of home ownership, plus a few extra.
If someone on the mortgage ever decides to move out, you need to have a plan in place to avoid a mess over their share of the equity. If you have enough money to buy them out that can make things easier; maybe you can negotiate a payment plan to buy them out and put that into a written settlement agreement. If you can’t buy the person who is leaving out, you may have to sell the property in order to return their financial investment.
Legal consequences of marriage and inheritance
If legally marriage partners who are part of a multi-partner purchase divorce, things can get complicated fast – a court could order a change in the spouses’ ownership equation of the house, no matter whose name is on the deed. A legal spouse could be entitled to half of the combined contribution of the couple, regardless of who lives where and who paid for what; or the spouse could be entitled to more than half of the couple’s equity in some states and circumstances. If someone has a bad breakup, you could be forced to sell the home to buy out a disgruntled ex. In a worst-case scenario, you have to go to court and argue about what is supposed to happen and how much each person gets.
There’s also the possibility that one of your co-owners passes away, and their share of the home is inherited by someone that is not part of your polycule agreement. There are provisions that help mitigate this, but If you have kids, parents, or siblings that may inherit your assets, things can get tricky. you can do end of life planning and set it up so that the deceased’s share is inherited by the other owners (in a will or an outside-of probate Transfer on Death Deed or “LadyBird” Deed), or you can make an agreement to establish the home as a “life estate” for the surviving owners that allows them to continue living in the home even if the deceased’s share of the equity is inherited by someone else.
This project requires legal advice!
As you can see, purchasing a home as a polycule is a complex proposition. Each person should have a lawyer advising them of their rights, responsibilities and risks for their specific situation. This is one area that you do not want to DIY – if you can’t afford the advice of a lawyer on this purchase, I don’t think you can afford to buy a house together. The financial cost of errors in a property contract are HUGE compared to paying a lawyer up front. The emotional toll on your relationships if things go awry from lack of planning could be incalculable.
If you want to consider what cohabitation scenario could work best for your polycule, you can schedule a free short consultation through our website at https://chosenfamilylawtx.com/