Buying Property as a Couple Outside of Marriage: What to Know About Cohabitation and Co-Ownership

Cohabiting refers to living together before marriage (or entering into a civil partnership) or in place of getting married or forming a civil partnership.

Live-in partners will only be regarded as co-owners of the properties they bought while residing together if their union meets certain requirements.

Co-ownership guidelines shall be followed in accordance with Article 147 of the Family Code.

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Many couples decide to cohabitate or live together before getting married. Nevertheless, the legal rights of unmarried couples who cohabit differ from those of married couples. The legal protections afforded to married couples are not the same for unmarried couples. In addition, they are also not liable for one another during a separation.

Know More About Cohabitation and Co-Ownership in the Philippines

Cohabiting refers to living together before marriage (or entering into a civil partnership) or in place of getting married or forming a civil partnership. You and your partner are a cohabiting pair if you’re not married or in a civil partnership and live together. That said, consider signing a cohabitation agreement, simplifying the process in case of a breakup.

The laws nevertheless apply to live-in partnerships, especially regarding property ownership, even though they resemble married relationships in certain ways but lack formality. Live-in partners may purchase properties during their relationship. But who gets what could become a problem if things don’t work out. Does the partner who made the largest investment in the property purchase immediately become the owner? Can live-in partners share their real estate equally?

When Can Live-In Partners Be Considered Co-Owners of a Property?

Live-in partners will only be regarded as co-owners of the properties they bought if their union meets the following requirements:

• No legal barrier prevents the couple from being married because they can both be married to one another. As a result, they are not already married to one another and can wed if they so choose.
• The couple doesn’t have an open relationship. In addition, they don’t share a residence with other men or women, as they live together solely.
• They must actually live together if they want to claim the status of husband and wife. Why does this matter? This indicates that their relationship is more than a passing one in which the male occasionally visits the lady for an extended period.
• Both parties aren’t married, or if they are married to each other, their marriage is null and void for other reasons, such as failing to get a valid marriage license and not because one or both of them are already legally wed to someone else. (Bigamous marriages and adulterous partnerships are exceptions and are covered by Article 148 of the Family Code.)

Legal Basis of Co-Ownership Outside of Marriage in the Philippines

The following co-ownership guidelines shall be followed in accordance with Article 147 of the Family Code if the union of a man and a woman satisfies all four of the criteria as mentioned earlier:

• The co-ownership rules will apply to properties the parties obtained while cohabitating. This means that the live-in partners are deemed to possess all properties in proportion to their respective efforts in gaining them.
• If there is no evidence of one’s involvement, properties acquired during cohabitation are presumed to have been acquired through joint efforts, work, or industry. Therefore the partners own the property equally.
• Suppose neither the man nor the woman contributed to purchasing the property. In that case, the partner who contributed through efforts in the form of providing maintenance of the family and of the household shall still be designated a co-owner of the property. In addition, that partner shall be deemed to have contributed jointly to the purchase.
• Therefore, even if he or she didn’t contribute money to buy the property during cohabitation, they will be treated as equal owners.
• Even if only one party earned the wages and salaries and the other did not participate, the parties should own and equitably divide the wages and salaries earned during the cohabitation into equal shares.
• The man or woman (regarded as donee or heir) should exclusively own any property acquired by donation or inheritance. Such given or inherited properties will not be transferable to the other party. The property acquired via the exchange of those, as mentioned earlier, donated or inherited property shall remain the exclusive property of the donee or heir.
• The live-in partners shall share responsibility for the upkeep of their respective properties. Until the end of their cohabitation, neither party may sell or dispose of his or her sharing in the co-owned properties. Neither party should also transfer their share to a third party.

The Perks and Drawbacks of Co-Ownership for Unmarried Partners

If you plan to buy a property with your partner without marriage involved, here are some of the benefits you will enjoy:

• You can pool funds, own, and invest in a property for sale together quickly without hurting your bank accounts.
• You don’t need to wait a long time before you can save a large amount of money as a deposit for your dream property since you and your co-owner will share the expense.
• It reduces your transaction and living expenses.

Here are the potential drawbacks of co-ownership outside marriage:

• Your relationship and finances can be put to the test.
• As co-owners, you are liable for each other’s debts, especially if you plan to use your property as collateral for a debt.
• A conflict may arise if one of you cannot keep up with the share of ongoing expenses or if one decides to sell the property and the other doesn’t.
• Your future borrowing power may be affected since financial lending companies will look into the entire co-ownership loan.

Cohabitation and Co-Ownership FAQs

Q: How are properties acquired during cohabitation divided?

If both parties assume joint contributions, properties may be equally divided among parties. The specific rules may vary, depending on the couple’s capacity to marry or if their marriage, if any, is void.

Q: What happens to the property if one partner is married to another person?

If one party in the cohabiting couple legally marries another person, anything they acquire during their cohabitation does not belong to them or their partner. Instead, it will go to the legal spouse as part of their marital property, subject to the provisions of the Family Code.

Q: Can a cohabiting partner dispose of a property acquired during cohabitation without the other’s consent?

No, both parties must consent before a property is disposed of or encumbered until the cohabitation ends.

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• buying properties outside marriage
• co-ownership
• cohabiting