It is not unusual for unmarried couples to purchase homes together. Typically, couples take title as joint tenants, meaning that on the death of one of them, title automatically vests in the survivor. If instead they take title as tenants in common, it is almost always on a 50-50 basis.
Problems arise, however, if the relationship ends. What happens to the equity in the residence? What if one partner has paid considerably more than the other to create the equity, whether through the down payment or mortgage payments? What if one has paid to maintain and even improve the home? Can couples count on the courts to recognize and allocate the home’s equity proportionately?
Based on a recent Illinois Supreme Court decision, Blumenthal v. Brewer, the answer is a resounding NO. In a majority decision written by Chief Justice Lloyd Karmeier, with a strong dissent from Justice Mary Jane Theis, the court ruled that to afford unmarried partners the right to enforce mutual property rights under common law would be tantamount to recognizing common law marriage, which the Illinois General Assembly expressly prohibited in 1905.
In Brewer, Dr. Jane Blumenthal and Judge Eileen Brewer had been domestic partners for many years and raised three children together. They had purchased a home in Chicago as tenants in common, apparently each owning an undivided one-half interest. When the relationship ended, Dr. Blumenthal brought a partition action, essentially asking the court to order the sale of the house and the distribution of the net proceeds according to their respective interests (one-half each).
Judge Brewer, however, filed a counterclaim for various common law remedies, arguing that the house should be divided based on equitable principles, basically the same as if she and Dr. Blumenthal had been married. The trial court dismissed the counterclaim, holding that a 1979 Illinois Supreme Court case, Hewitt v. Hewitt, precluded common law remedies for unmarried cohabitants.
The appellate court overruled the trial court, finding that the rationale for Hewitt and societal mores had changed in the intervening 37 years. With Judge Brewer’s counterclaim reinstated, the matter was returned to the trial court to deal with the home’s equity. Eventually, the trial court awarded Dr. Blumenthal 30 percent of the home’s equity and Judge Brewer 70 percent, based on their relative monetary contributions. Without the common law remedies, each would have received 50 percent. Neither party appealed the decision.
However, after the appellate court dismissed Judge Brewer’s counterclaim but before the trial court made its final ruling, Judge Brewer appealed the dismissal of the counterclaim to the Illinois Supreme Court. In a strongly worded rebuke of the appellate court, the Supreme Court found that Hewitt had not been abrogated but remained the law of Illinois, and that the General Assembly had not changed Illinois’ prohibition of common law marriage. Therefore, the court said, Judge Brewer had no right to pursue common law remedies that would have been available had she and Dr. Blumenthal been married.
Now that the Illinois Supreme Court has spoken, significant risks exist for unmarried couples who buy a house. If the relationship dissolves, they are left with asking the court to order the sale of the house and the disposition of the proceeds according to their respective interests in title, which is almost always 50-50.
How can this be avoided? One method is to take title according to each partner’s monetary contributions. For example, if the down payment and mortgage payments will come from one partner, and utilities, taxes and insurance from the other, perhaps the anticipated monetary contributions can be calculated and title taken according to those percentages. Alternatively, counsel could prepare a joint owner’s agreement, similar to a pre-nuptial agreement.
In any event, unmarried couples planning to purchase a home should consider how they wish to own the property. Unless Illinois law changes, failing to do so can cause significant adverse consequences.