Saw this article by Rob Thomas in The Huffington Post the other day … it’s pretty much the best article I have seen on the straight perspective on gay marriage. “I believe that America is a great nation of even greater people. I also believe that anyone who says that this is a “Christian nation” has RHS, or revisionist history syndrome … “ The link: http://www.huffingtonpost.com/rob-thomas/the-big-gay-chip-on-my-sh_b_208183.html
This debate belongs on this Austin real estate blog because we’re immersed in conversations of two “non-married” people buying property together and how to best handle that with mortgage, title and legal work to tighten things up. See our other blogs pertaining to getting your legal house in order.
Peace on.
Don’t Let Your New Valentine Break Your Heart!
How to Succeed in Owning Real Estate with Friends and Partners
February 20, 2009 – The Fowler Law Firm
Laura Fowler, JD
Tom J. O’Meara, JD
Question: When is the very best time to make agreements to own real estate with friends and partners?
Answer: Before anyone has any ownership interest.
Due to the fact that this is the ideal rather than the norm, for a variety of reasons that are largely based on optimism about the human condition, here are a few pointers in the hopes that some of our readers will choose to hope for the best but plan for the rest!
If one party takes title to real property but the other makes substantial earnest money or mortgage payments, the party making the payments will have a difficult time protecting his contribution.
This situation is often brought about by a disparity in the parties’ wealth or credit rating. The parties attempt to equalize the situation by an agreement to share the payments even though only one party is legal owner and legally obligated on the note. While this may sound like a fair apportionment of risk and responsibility, if one of the parties decides to end the personal relationship, the party who has been paying without obtaining any legal rights is sometimes shocked to discover how difficult it is to assert a claim against either the property or the person holding legal title.
Another possible scenario involves the investor hoping to acquire real estate at favorable terms. What could be better than to designate the purchase as homestead, thereby obtaining favorable financing and tax advantages, while letting a loved one or cherished business partner live in it? That’s all fine and good except for the fact that the third party financing agent is going to treat this situation as fraud; the tax assessor collector who was informed it was homestead is going to set aside the homestead exemption and demand penalties and interest. Meanwhile, the Internal Revenue Service and its omnipresent agents will impose interest and penalties if any homestead or tax deductions were claimed. The person living in the property, who presumably has received something of value for nothing, probably has no liability and no exposure.
Last but not least, “L’Amour…Toujours L’Amour.” Those who purchase a home together but are not married and thus are not protected by the Texas Family Code face many unexpected consequences, not the least of which is the fact that if things don’t work out, the laws related to cotenancy don’t give a dollar for dollar equitable right to the party who contributed more.
So what do you do? Whether you are the title holder or the party paying who holds no legal title, having some form of signed written agreement BEFORE the relationship and real property ownership begin is the best course. There is no best or right way to do this. The point is to ask the right questions so you know the result you both want. Then you can create a simple written agreement that can be filed of record in the appropriate manner. Some examples of questions you need to consider in making this agreement are:
1. In the event one party wishes to sever the relationship, what is the fair division of the assets, including the cost of any improvements to the property and any tax deductions one party claimed?
2. In the event one party dies, what should happen to the asset? Picture any of the above described situations and decide right now what should happen if one of you dies and the other is left to have what is an often less than cordial dialogue with the heirs to the deceased’s estate.
3. In the event one party becomes insolvent, what rights should the other party have? The true status of a residence, i.e. whether the party with title actually resides in the house as his primary residence declared as homestead, can make a huge difference in whether the home can be protected from creditors.
These are but a few of the exhilarating discussions we hope you never have to have except as a hypothetical “WHAT IF”.
In your every real estate purchasing adventure, we wish you the very best.
The Fowler Law Firm PC and its members are grateful to so many of you for your support and friendship. We never charge a client a fee or incur any expense until the client understands and agrees. We often provide information at no charge when we cannot truly be of service to a client.
Receipt of this electronic newsletter or printer friendly version does not establish or constitute an attorney- client relationship. This information is not intended as a substitute for careful review by legal counsel of your own choosing. As with any legal issue, please consult your attorney with questions.
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THE FOWLER LAW FIRM PC
919 Congress Avenue, Suite 1150
Tel: (512) 441-1411
Austin, Texas 78701
photo: KAngermann
Austin, TX was ranked 8th at gaydata.com’s Gay Ghetto Top 10 based on their analysis of demographics and real estate sales data throughout the USA linking towns that are “most in vogue with the diverse GLBT community.” Austin tied with Palm Springs and Chicago. Here’s the scoop:
#8 – Palm Springs, CA & Chicago Metro Area, IL & Austin, TX (3-Way Tie)
Austin has a long reputation for gay-friendliness, and what was long ago a large gay underground is now a tremendously creative GLBT synergy that permeates the whole city in full view of everyone. Austin is the state capital, an important academic center, and the music industry’s newest crown jewel. Plus the city has a high-tech industry presence only rivaled by Silicon Valley. Austin offers a wide range of GLBT enclaves that are literally all over the map, and Texas is famous for low taxes and high growth.
AUSTIN … the Austin gay community thrives and is pretty much a haven in conservative TX. It’s an open, progressive, techy, music-at-all-cost, active community. There really is not a gay “ghetto” in Austin … we’re all over with no particular neighborhood or zip code “owning” the gay population. There are concentrations, of course, but for the most part, the gay population is incorporated and nesting all over town. See our blog posting for Austin gay neighborhood reviews at AustinPink.com. Oh, and one little correction or nuance regarding “low taxes” … uh, no sales tax but we make up for it in property tax. But definitely high growth and one of the healthiest economies in the country.
To read the full article: GLBT Gay Ghetto Top 10
Provided by one of our favorite attorneys, Holly Gilman, Gilman & Clarke, P.C., Austin, TX
Because the issues regarding property division between domestic partners (non-married couples) is more complex than filing for divorce, it is smart to have a plan in place so that you will not have to resort to the courts to divide up jointly owned property. Here are the things your written agreement should cover:
1. On the House – is one partner entitled to buy out the other partner’s interest or should the house be sold and the proceeds split?
2. If the house is to be kept by one partner, will that partner have to qualify for a new mortgage to buy out the other partner’s interest shortly after split up or will there be a period of time in which the partner staying in the home will pay all the costs associated with the home and the other partner moves out?
3. Are you each entitled to one-half of the proceeds on the house, or should there be a different division because one partner paid more than the other toward the down payment or monthly payments?
4. How about bank accounts or investment accounts? Should they be split down the middle or some other division?
5. Who should get which vehicle and does the debt follow the vehicle if there is an outstanding balance on it?
6. How about credit card debt. Should it be split 50/50 or should each partner take what debt is on his/her credit cards?
7. How about the personal property in the home? The property which each of you had before you got together or which you received from your family ought to go to you. But what about property which you jointly purchased since you got together. Can you agree on what do about that?
8. Finally, do you want to require that you both try mediation before any court action in the event that you still have disputes regarding dividing assets which are not set forth in the agreement?
NOTE: EACH OF YOU SHOULD MAKE UP A SCHEDULE OF PROPERTY WHICH YOU OWN TO ATTACH AS AN EXHIBIT TO A COHABITATION AGREEMENT.
Some Things You Should Know
Co-ownership does not necessarily convey the same rights as with a married couple. Many of these rights should be specifically created at the time of purchase of the home or shortly thereafter with appropriate legal documents such as a will.
This document is not intended to scare but it is scary how much of our community is at risk, how many couples own property together without the appropriate legal documents in place to protect themselves in the case of death, disability or separation. Lovely topic, we know.
Did you know that if you own property with your partner and he or she dies without the appropriate and challenge-proof legal documents in place, that you now more or less own half of that property with your partner’s heirs? Oh joy. You may love the family to pieces but do you want to be in a business relationship with them? Do you want to put yourself in a position where you may have to refinance to buy out your partner’s family at today’s market value and mortgage conditions or be forced to sell the home if you do not qualify for the new loan? We didn’t think so.
If you assume ownership of the property upon the death of the other co-owner, you may potentially have to address probate, inheritance challenges, inheritance taxes or risk the mortgage being called due. We recommend legal counsel at the time of purchase or shortly thereafter to help you avoid these possibilities.
So a little advice when purchasing property:
· Talk to your partner. Talk about wills and estates and what-ifs. Call it a pre-nup if you wish, but have an understanding and, best, an actual agreement in writing.
· Ask your agent to put you both on the contract even if just one of you is on the note. It will help get the ball rolling in the right direction. Some lenders will allow this, some will not. Consult with your lender and Realtor to assess your best approach.
· Ask your lender and title company about Joint Tenancy With Rights of Survivorship (JTWROS). Many lenders will not permit them, especially if just one of the partners is on the Note. Sometimes you’ll have a choice, sometimes not but you should ask.
· On tax benefits and who takes what, part or whole, talk to a good family-friendly CPA for guidance.
There is a reason why we recommend working with family-friendly (ff) Realtors, lenders, attorneys, tax advisors and title companies as this information is commonplace for them. A professional who is not ff may not understand these nuances and may waive them off as not important.
Let’s take care of ourselves and our relationships. Legally sound couples create a sound community.
Disclaimer: As licensed Realtors, financial advisors, mortgage brokers, we cannot give legal advice. We encourage you to discuss the details of your situation with appropriately licensed attorneys, financial and tax advisors.
Community Impact Newspaper
Written by Christi Covington Friday, 11 April 2008.
Major growth trends expected to keep local real estate strong
Lots of people want to move to Southwest Austin and that is a good thing for the local housing market, according to Ryan Robinson, the demographer for the City of Austin.
In 2004, he completed his last major forecast that predicted some of the city’s greatest numbers would move to Southwest Austin by 2010. From 2000-2010, he estimated the most people, 10,254 new residents, would come to the 78748 Zip code, near IH 35 and Slaughter Lane, alone. With only two years left until those estimates expire, he thinks the projections are on target, and as a result, homes will continue to sell, despite the national trend.
“Austin is today one of the healthiest housing markets in the country,” he said. “We’ve always been the envy of many other cities, but we find ourselves in a really good position right now.”
That is true, he added, especially for Oak Hill and the Circle C area.
“Oak Hill, I would say, as a sub-region is healthier than Austin and if Austin can maintain its relative economic health over the rest of the country then I don’t see anything that tells me that Oak Hill is not going to maintain its position as being one of Austin’s better, stronger neighborhoods,” he said.
Keller Williams Realtor Shelli Williams does most of her business in the southern and western sides of Austin and said although some people point to declining sales in the last year, she is not worried.
In March, she closed on five homes-one had multiple offers and two sold in less than 30 days after entering the market. She admits that some young realtors have struggled to enter the profession lately, but most of her colleagues are doing well. She has her own gauge for how she is doing. “I am not starving to death,” she said.
Best because of a bust
Robinson said the main reason Austin will not experience the same upset as other cities is because it never developed the same housing market growth.
“Yes, housing prices have gone up in almost every part of the region, probably more than most people would like, but it has not been the kind of thing that when you buy a house for $175,000 that the next year you can sell it for $350,000,” he said. “We have had a much more gradual, reasonable, steady increase in our values, so that today is one of the big sources in our stability. Plus, something very important and basic is we are creating new jobs and you don’t see that in every part of the country.”
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The unemployment rate for the Austin/Round Rock metropolitan in November was at 3.5 percent compared with 4.1 percent for Texas and 4.7 percent for the United States. Ironically, Robinson said the tech crash in 2001 may be Austin’s saving grace because it forced the city to slow its growth and diversify the job sectors for local employment.
Why Southwest?
So as people continue to work and move to Austin, south of Town Lake is a popular place to live-and it is an eclectic group of residents moving there, according to Williams. A few are still relocations from California, most are first-time buyers taking advantage of low interest rates and those moving around the city. Others are older residents ready to downsize their home.
She said the community’s culture, easy access to the airport, proximity to the lakes, shopping and major transportation infrastructure all make the area attractive at any price, but the main reason for growth is basic affordability and convenience.
Prices can range at the very low end at around $100,000 and escalate to the millions farther west.
“You can get a lot for your money,” she said.
Robinson has also paid attention to who is moving into the neighborhoods, focusing on the type of growth in concentrated areas. Middle class, first- and second-generation Hispanic families are moving into the neighborhoods closer to IH 35. One southeast neighborhood in particular is an extreme and exclusive example. Dove Springs on Stassney Lane had a 95 percent Latino population when last recorded in the 2000 census.
The opposite is true for the neighborhoods to the west. They are becoming increasingly Caucasian and attracting more and more Asian residents. Again, these neighborhoods are dominated by families, with eighty-five percent of Circle C’s residents falling into this category.
In the future
During the next several years, Robinson expects property values to increase steadily with all the trends he has already seen accelerating. Oak Hill particularly will become “more of a Westlake for middle class families,” he said.
According to the Austin Board of Realtors, homes in the 78735 Zip code sold for $375,000 at the median price in 2007. In the first few months of 2008, that price has jumped to around $600,000. Values are going to escalate because limited land is available for developers to build, Robinson said.
It will overall be less commercial, he thinks, because residential builders will fight for the land. What he does anticipate is redevelopment, such as at the retail center at the Y in Oak Hill.
“This is a perfect candidate. I would not be surprised if you see this as a mixed-use, residential, loft-like development,” he said. “The future of Oak Hill is going to be less and less traditional high-end single family subdivisions and more what we are seeing in the urban core-and that is relatively upscale, mixed use condos.”
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Austin Pink is the gay edge of The Nelson Project @ Keller Williams Realty in Austin, TX. We are a group of five real estate professionals led by Julie Nelson. Our card carrying family members include Julie, as team lead and listing specialist, and Steve Jordan, buyer specialist.
We are residential real estate professionals with an urban and GLBT focus. 60% of our clientele is family. We are top producers in the largest real estate office in the country.
Why Austin Pink? We saw a need for newcomers or prospective Austin newcomers to be able to google “what are the gay neighborhoods in Austin?” We wanted a place to write vignettes on various gay clusters around town, where they are, what they’re called, what is the draw and what is the real estate profile.
As the Austin gay community knows, we do not have a specific gay neighborhood … we’re everywhere in a very open city. We do have clusters … to name a few: Travis Heights, anything 78704, Crestview, Wilshirewoods, Delwood, Tarrytown, 10N and downtown … and then some.
Check out the Neighborhood Review category in this blog and particularly the posted blog on Austin Gay Neighborhoods: A Scientifically Weak Yet Visually Engaging Demographic Study (http://austinpink.wordpress.com/2008/03/17/austin-gay-neighborhoods-a-scientifically-weak-yet-visually-engaging-demographic-study/) to get a glimpse of our gay map.
Pride Brunch
Sunday, June 8 1130-100
http://eqfed.org/eqtx/events/pride_brunch_tickets/details.tcl
Pride Festival
Saturday, June 14 noon-7
Auditorium Shores
http://eqfed.org/eqtx/events/pride_tickets/details.tcl
Pride Parade
Saturday, June 14 8:30 pm
Auditorium Shores to Lavaca to 4th Street
http://www.austinprideparade.org/9/Parade_2008.html
Pride Women’s Dance
Friday, June 20 8 pm – midnight
Fiesta Gardens
http://eqfed.org/eqtx/events/Womens_Dance_Tickets/details.tcl
Sex & Real Estate Seminar: Protecting Your Partner & Your Assets
A Panel Discussion
Wednesday, June 25 630-8 pm
1801 S. Mopac
<a href=”http://austinpink.wordpress.com/2008/06/02/sex-and-real-estate/
Originally uploaded by nelsonproject
Originally uploaded by nelsonproject
As past cases establish, the substantive right of two adults who share a loving relationship to join together to establish an officially recognized family of their own and, if the couple chooses, to raise children within that family constitutes a vitally important attribute of the fundamental interest in liberty and
personal autonomy that the California Constitution secures to all persons for the benefit of both the individual and society.
Furthermore, in contrast to earlier times, our state now recognizes that an individual’s capacity to establish a loving and long-term committed relationship with another person and responsibly to care for and raise children does not depend upon the individual’s sexual orientation, and, more generally, that an individual’s
sexual orientation — like a person’s race or gender — does not constitute a legitimate basis upon which to deny or withhold legal rights. We therefore conclude that in view of the substance and significance of the fundamental constitutional right to form a family relationship, the California Constitution properly must be interpreted to guarantee this basic civil right to all Californians, whether gay or heterosexual, and to same-sex couples as well as to opposite-sex couples.
One of the core elements of the right to establish an officially recognized family that is embodied in the California constitutional right to marry is a couple’s right to have their family relationship accorded dignity and respect equal to that accorded other officially recognized families, and assigning a different designation for the family relationship of same-sex couples while reserving the historic designation of “marriage” exclusively for opposite-sex couples poses at least a serious risk of denying the family relationship of same-sex couples such equal dignity and respect. We therefore conclude that although the provisions of the current domestic partnership legislation afford same-sex couples most of the substantive elements embodied in the constitutional right to marry, the current California statutes nonetheless must be viewed as potentially impinging upon a same-sex couple’s constitutional right to marry under the California Constitution.
First, the exclusion of same-sex couples from the designation of marriage clearly is not necessary in order to afford full protection to all of the rights and benefits that currently are enjoyed by married opposite-sex couples; permitting same-sex couples access to the designation of marriage will not deprive opposite-sex couples of any rights and will not alter the legal framework of the institution of marriage, because same-sex couples who choose to marry will be subject to the same obligations and duties that currently are imposed on married opposite-sex couples.
Second, retaining the traditional definition of marriage and affording same-sex couples only a separate and differently named family relationship will, as a realistic matter, impose appreciable harm on same-sex couples and their children, because denying such couples access to the familiar and highly favored designation of marriage is likely to cast doubt on whether the official family relationship of same-sex couples enjoys dignity equal to that of opposite-sex couples.
Third, because of the widespread disparagement that gay individuals historically have faced, it is all the more probable that excluding same-sex couples from the legal institution of marriage is likely to be viewed as reflecting an official view that their committee relationships are of lesser stature than the comparable relationships of opposite-sex couples.
Finally, retaining the designation of marriage exclusively for opposite sex couples and providing only a separate and distinct designation for same-sex couples may well have the effect of perpetuating a more general premise — now emphatically rejected by this state — that gay individuals and same-sex couples are in some respects “second-class citizens” who may, under the law, be treated differently from, and less favorably than, heterosexual individuals or opposite-sex couples.
Under these circumstances, we cannot find that retention of the traditional definition of marriage constitutes a compelling state interest. Accordingly, we conclude that to the extent the current California statutory provisions limit marriage to opposite-sex couples, these statutes are unconstitutional.
Excerpts from:
Supreme Court of California, Lockyer v. City and County of San Francisco (2004) 33 Cal.4th 1055 http://www.courtinfo.ca.gov/opinions/documents/S147999.PDF
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