Shared property after separation: How unmarried couples can find a fair solution

Many couples today choose to buy a house or apartment together without being married. As long as the relationship lasts, this often makes little difference. However, if a separation occurs, it quickly becomes apparent that different rules apply to unmarried owners than to married couples. There is no automatic division of assets. To avoid financial disadvantages and protracted conflicts, both parties should therefore clarify their rights early on and determine the best solution for their shared property.

Joint ownership without a marriage certificate: What are the consequences of a separation?

The crucial factor is who is registered in the land register and what their respective shares are. This registration fundamentally determines the ownership structure, regardless of who contributed how much to the purchase price, financing, or renovations during the relationship. Existing loans also remain unaffected by a separation. The individuals remain liable to the bank as stipulated in the loan agreement.

Additional agreements, such as a partnership agreement or written agreements regarding contributed equity, can facilitate clarification. If such arrangements are lacking, it should be carefully examined what claims may exist. Legal advice can be particularly useful when there are differing financial contributions.

Acquisition or sale: Which solution is best suited to the situation?

If one partner wishes to remain in the property, they can acquire the other partner's share and buy them out. This requires a realistic valuation of the property and usually also the approval of the financing bank. A transfer of ownership does not automatically release the departing partner from the loan.

If an acquisition is not financially feasible or desired by either party, a sale is often the best option. The proceeds from the sale, after deducting any existing liabilities, are distributed according to ownership shares. A fair market price and structured marketing provide a reliable basis for a clear financial settlement.

Reduce conflicts and reach a viable decision together

The more objectively both sides proceed, the greater the chance of a quick and fair agreement. It is helpful to first transparently document the current market value, the outstanding debt, and any incidental costs. This allows for an objective comparison of acquisition and sale.

A neutral real estate agent can also help separate emotional discussions from economic facts. An independent valuation and a clearly organized sales process help reduce uncertainty and make decisions transparent. This creates a basis for decision-making that serves the interests of both owners and avoids unnecessary disputes.

Are you wondering whether selling or keeping your jointly owned property makes more sense? We offer neutral support in determining its value and, if desired, will guide you through the entire sales process.

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.

Photo: © Wordliner/Image created with OpenAI's ChatGPT

SCH_EIG_9