We’ll explore several common exit scenarios and share preventative steps you can take to avert catastrophe.

1️⃣ Everyone agrees to sell

Whether you’re a group of two co-owners or ten, it’s possible you reach the same conclusion when it’s time to move on. But that can play out in many different ways. Agreeing on one issue doesn’t guarantee alignment elsewhere. In any case, there’s still a lot to be done. Selling a home can be hard work. Like co-buying a home, selling a property you co-own involves many moving parts and decisions.

What you can do: Discuss your timelines, goals, and plans early on. Don’t assume that your co-buyer(s) know what you’re thinking. Is co-owning a home a 3, 5, or 10 year play for you? Is it a forever plan? Are there any events that could change how you feel about things? Co-buyers need to communicate. Additionally, you need a plan for how things work if and when it’s time to get out.

2️⃣ Break up

If almost 50% of marriages in the US end in divorce, imagine the potential for break-ups for partners who are not married.

According to attorney David Matthews, a Weinberg Wheeler Hudgins Gunn & Dial partner in Georgia, "...with unmarried couples, you could never force the other side to buy you out. If one party wants to be really obstinate and not sell, the other party has a problem."

Attorney Lynn Strober, co-chair of the Matrimonial and Family Law practice at Mandelbaum Salsburg, adds, "Unlike married couples, if there is a buyout between unmarried partners, tax issues may arise, as the transfer may be a taxable event."

☝️ Heads Up

A transfer of ownership can trigger a due on sale clause if a mortgage is involved. Your mortgage lender could come looking for full loan repayment.

What you can do: Don't wait until a split happens. Discuss, agree, and codify how you'd deal with this sort of situation. Then, record it in your Co-ownership Agreement and update it as necessary.

3️⃣ Unexpected sale

Imagine that one co-owner suddenly decides they want out, intending to sell their share without discussing it with the rest. This could cause a lot of tension, and potentially a legal dispute, as the remaining co-owners scramble to buy out the exiting party or face a stranger owning part of their home.

What you can do: Define boundaries and stipulate an order of operations for handling different life events that could lead to an unexpected sale. Be sure to outline each party's rights in each scenario.

4️⃣ Dispute

Even strong relationships crumble under the weight of money and ownership. A disagreement over home improvements or maintenance costs can escalate quickly into a full-blown conflict. A conflict that can't be resolved amicably may lead to litigation and even a forced sale of the property.

What you can do: Strong communication and clear guidelines on decision-making processes can help mitigate this risk. Invest the time to understand differences of opinion, then address issues before they become problems.

5️⃣ Death

A co-owner's sudden death can throw the entire co-ownership arrangement into chaos. Without a clear plan, the deceased's share of the property may pass to a relative (or friend) with no interest in co-owning, or worse, create legal and financial headaches for the surviving co-owners.

What you can do: A well-planned exit strategy—including a Co-ownership Agreement, Wills, and estate planning documentation—can provide structure and help avoid probate, unnecessary taxes, and added stress during a tough time.

6️⃣ Bankruptcy

If one of the co-owners falls into financial difficulty and files for bankruptcy, their creditors could come after all of their assets—and your co-owned home. That could lead to a forced sale of the entire property, leaving you and any other co-owners without a home and financially distressed.

What you can do: Be transparent upfront about finances and individual financial situations. Create a plan for expenses and payments, and actively manage your shared financial obligations. While you can’t expressly prevent someone else from going bankrupt, you can minimize unexpected financial strain related to the co-owned home through planning, structure, and management. Finally, a robust Co-ownership Agreement can include mechanisms to protect the property and all co-owners in such situations.