We had a client who purchased a home with his fiancé. Technically, the fiancé purchased the home with our client’s mother. The fiancé provided the down payment and our client’s mother provided her credit for the mortgage. The couple married eight years later, and eight years thereafter, they filed for a divorce. Our client wanted half the equity in the home. Will the court give it to him?
How Nevada law divides a home owned by a husband and wife is fairly clear. Under Nevada law, a home purchased by a husband and wife during the marriage is presumed to be community property. In a divorce, community property is divided evenly, absent a compelling reason. See NRS 125.150(b).
But what happens when an unmarried couple purchases a home? This is where the laws are a little murky. When unmarried couples, or cohabitants, purchase a home and later separate, the court must decide what to do with the home.
There are several ways a court can divide a home owned by unmarried cohabitants: (1) based on the way the deed is written, (2) based on finding an express or implied partnership, or (3) based on community property by analogy.
Two cohabitants may own a home as joint tenants or tenants in common. Joint tenancy gives each cohabitant an undivided equal interest in the property. This implies equal ownership. Tenants in common does not imply equal ownership. One tenant may own 80 percent and the other tenant may own 20 percent. In a perfect world, there is a document stating the percentages each tenant owns. If there is no such document, then the court will look to the amount of contributions each tenant made to determine the share of ownership. See Sack v. Tomlin, 110 Nev. 204, 871 P. 2d 298 (1994).
Even without their name on the deed, a cohabitant may have ownership in a home based on an implied partnership or community property by analogy.
A partnership is an association of two or more persons to carry on as co-owners of a business for profit. See NRS 87.060(1). There may be a document to confirm the partnership. However, as we all learned in law school, paperwork is not required to form a partnership. A partnership can be shown through words and actions.
Two unmarried people coming together to purchase a home is potentially a partnership. To form a partnership, there must be an express or implied contract.
If an express or implied agreement is not found, then the court will revert to partnership rules of law. Under Nevada law, a partner interest is determined by agreement or by their share of the profits. See NRS 87.260.
Community property is a label reserved for couples who are married. However, our court has found cases where the couples were not married but treated the property as if they were married. The court calls this “community property by analogy.” See Hay v. Hay, 100 Nev. 196, 678 P.2d 672 (1984).
The court will look for an express or implied agreement between the parties to acquire and hold property as if they were married. If an agreement is found, the property will be divided as any community property would be divided.
Couples can have a written agreement as to how the house should be held, or their actions can show their intentions. Holding themselves out as husband and wife, or a pooling of funds is key in evaluating what the couple intended.
Pooling of funds, or treating each other’s income as a married couple would, is evidence of an implied contract to hold the home as community property.
What if a cohabitant does not have their name on the title, there is no proof of an implied partnership, no proof of holding themselves out as married, no pooling of money, and no proof of intent to treat the home as community property?
In this scenario, the cohabitant likely has no interest. The cohabitant is nothing more than a mere roommate and best suited to pursue an unjust enrichment claim.
In our case, our client was able to show community property by analogy through the pooling of money. They had no formal agreement, which meant the court would divide the home based on contribution. The fiancé supplied the entire down payment. This was not a favorable fact for our client. Luckily, over the eight years of cohabitating, they pooled their incomes together by depositing wages into a joint account that was used to pay the mortgage, taxes, and homeowner’s insurance. It also helped that our client had proposed to the fiancé before the house was purchased, and later they had indeed married. This, along with the pooling of funds, was enough to show the court they intended to treat the home like a marital home.
About the authors:
Rock Rocheleau, Esq. is the managing attorney at Right Lawyers. He manages the firm with his wife of 27 years, attorney Stacy Rocheleau. Rock graduated from UNLV Boyd School of Law in 2019. Prior to being an attorney Rock was the office manager of the firm.
This article was originally published in the “Family Law” issue of Communiqué, the official publication of the Clark County Bar Association, (August 2020). See https://clarkcountybar.org/about/member-benefits/communique-2020/communique-august-2020/.
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