Here's what unmarried couples should consider when buying real estate

Many unmarried couples consider buying a property for their future family. However, there are some important points to consider that many people overlook. What happens to the property if the couple separates or if one partner dies? Is the surviving partner financially secure?

Something unmarried couples often overlook: if one partner dies, the other is not entitled to inherit. Part or even all of the property will then be inherited according to the statutory rules of inheritance. To ensure both are financially secure in such a case, they should make arrangements.

Land register entry

Only those individuals listed in the land register are considered owners of a property. The amount paid for the property by each individual is irrelevant. If only one partner is listed in the land register, the other partner has no ownership rights without a corresponding partnership agreement. If both partners are listed, half of the property passes to the remaining partner, and the other half passes to their heirs according to the statutory order of inheritance.

Partnership agreement

A partnership agreement is advisable if specific details need to be precisely defined. For example, it can specify who contributed how much equity to the property purchase or who is responsible for each mortgage payment. With a partnership agreement, both partners are registered as proportional owners in the land register.

Furthermore, certain details should be documented, for example: what happens if one party can no longer make the payments or who remains in the property in the event of a separation. It is advisable to seek advice from both a legal expert and, for property-related matters, a real estate professional.

Civil law partnership (GbR)

Unmarried couples also have the option of forming a GbR (general partnership) to purchase real estate. The GbR is then listed as the owner in the land register. This means that the partners each own a share of the partnership's assets, i.e., the property. A partnership agreement is drawn up for this purpose. This agreement regulates the details, such as who owns which share of the partnership assets and what happens in the event of a separation.

However, when establishing a GbR (general partnership), it is essential to keep accurate records of all contributions made. This is also good advice when drawing up a partnership agreement to avoid future disputes.

Get advice from a professional

In any case, unmarried couples should seek legal advice regarding the contract details. For all questions concerning the property, they should consult a local real estate expert. As for financing, an experienced mortgage advisor can be helpful.

Are you looking for support with your property purchase? Contact us! We would be happy to advise you.

Notes

For the sake of readability, this text uses the generic masculine form. Female and other gender identities are explicitly included where relevant to the statement.

Legal notice: This article does not constitute tax or legal advice for any specific case. Please consult a lawyer and/or tax advisor to clarify the facts of your individual situation.

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