Buying a Home With a Partner or Friend: Protect Yourself

If you buy a home in New York with a partner you are not married to, or with a friend, the law treats you as two separate owners, and it fills in default rules on ownership shares, death and break-ups that may not match what you intend. Choose how you hold title on purpose, and sign a written co-ownership agreement before closing that covers who paid what, who pays going forward, and how either of you can exit.

Step one: choose how to hold title

Under EPTL §6-2.2, when a home is conveyed to two or more people, they hold it as tenants in common unless the deed expressly says joint tenancy. The rule covers co-op shares as well as deeds. Married couples get a third option, tenancy by the entirety, which unmarried co-buyers cannot use. (If a deed describes unmarried buyers as spouses, the law treats it as a joint tenancy.)

Tenancy in common lets the deed state percentages, such as 60/40, which matters if you put in different down payments. Joint tenancy means equal ownership and automatic survivorship, which many couples want, but it also means your share bypasses your will. Some buyers use a company or trust instead; that adds cost and can affect financing and tax benefits, so ask an attorney. See ways to hold title in New York.

Step two: write a co-ownership agreement

A deed says who owns the home. It does not say who pays the roof bill, what happens if one of you loses a job, or how a buyout is priced. Married couples have divorce law to sort those out; unmarried co-owners have only their contract and, if they cannot agree, a partition lawsuit. A real estate attorney can draft the agreement, ideally with each of you advised separately.

Worked example: two ways to handle unequal down payments

Two co-buyers purchase a $1,000,000 condo with $200,000 down: one puts in $150,000, the other $50,000, and they split the mortgage payments equally. Years later they sell for $1,100,000 and owe $750,000 on the loan, leaving $350,000 (before selling costs, to keep the math simple).

Neither approach is "right." The first rewards the larger contribution with a larger share of growth; the second returns each person's money and then splits the rest equally, which fits a couple who share the monthly costs equally. What matters is that you choose one in writing before closing, and that the deed and the agreement say the same thing.

Step three: how both incomes count

For the mortgage

If you both apply as borrowers, the lender generally counts both incomes and both sets of debts and credit histories. The CFPB defines debt-to-income ratio as all monthly debt payments divided by gross monthly income, so one person's large student loan or car payment affects the combined ratio. One weak credit report can also change the rate you are offered. Run the numbers with the debt-to-income calculator and the home affordability calculator.

Both borrowers are each fully responsible for the loan, whatever your private agreement says. If your partner stops paying, the lender can look to you for the whole payment.

For a co-op board

Co-op boards review every purchaser's finances, and each building sets its own debt-to-income and liquidity tests. Both of you will submit tax returns, bank statements and references in the board package, and both may be interviewed. See co-op financial requirements, the board package checklist and the co-op board approval calculator.

Unequal contributions and taxes

• Gift tax: the IRS treats a transfer as a gift when you do not receive full value back. If one person pays more of the price but you take equal shares, part of that may be a gift. The 2026 annual exclusion is $19,000 per recipient. Spouses can give to each other under the marital deduction; unmarried partners cannot. Ask a tax adviser before you set the shares.
• Selling later: IRS Publication 523 says that with multiple owners, your gain is the total gain times your ownership percentage. Each unmarried owner who meets the ownership and use tests applies the single-filer exclusion (up to $250,000) to their own share. See capital gains tax when you sell.
• Gift funds from family: if parents are helping with the down payment, the lender will need a gift letter. See using gift money for a down payment.

When one person wants out

1. 1

   Follow the agreement

   Use the notice period, valuation method and right of first refusal you agreed on.
2. 2

   Agree on value

   An independent appraisal avoids arguments. For co-ops, recent sales in the same building are the best evidence.
3. 3

   Buyout or sale

   The staying owner refinances into their own name (or the lender releases the other), or the home is sold and the net proceeds split by the agreed shares.
4. 4

   Paper the transfer

   New deed or share assignment, transfer tax returns, and for a co-op, board approval of the remaining owner.
5. 5

   If you cannot agree: partition

   Under RPAPL §901, a joint tenant or tenant in common can ask a court to divide the property, or to order a sale when dividing it would cause great prejudice, as it usually would for a single apartment or house. It is slow and expensive, which is why the agreement matters.

Before you sign the contract

• Decide tenancy in common or joint tenancy, and the percentages, before the deed is drafted.
• Sign the co-ownership agreement before closing, while you still agree on everything.
• Make or update wills, and consider life insurance to fund a buyout.
• Keep records of every contribution: down payment, closing costs, improvements.
• Check the building: look up its violations and records on Roofy.