Published in the Union Leader - September 2012
Q: My partner and I purchased a house together, but we are no longer a couple and I have moved out of the house. My partner’s name alone is on the mortgage for the house. What are my responsibilities and rights concerning what happens to that house?
A. Your responsibilities and rights depend on whether you signed a promissory note for that house and whether you are on the title to the house. A promissory note is a signed written promise by the borrower to pay a specified sum of money (i.e. loan amount and interest) to the lender. A mortgage is a security interest in real estate given to the lender by the real estate owner to secure the promissory note.
If you did not sign a promissory note, you have no legal obligation to pay the loan for the house. If your name is not on the title, you have no legal responsibility for the house, but also no legal rights to the house. Money you contributed toward the house, including down payment and monthly mortgage payments, generally would not be recoverable unless your contribution was a loan or your circumstances support another legal theory of recovery. For example, a constructive trust for your benefit might be imposed on the house if you can demonstrate that your former partner will be unjustly enriched by retaining sole ownership. The ability to impose a constructive trust depends on the specific facts of each case and parties’ relationship.
If you signed a promissory note, you are legally obligated to pay the full amount due under that note even when your name is not on the mortgage or title. If you or your former partner fails to make monthly payments, the lender may foreclose on the house and pursue collection action against you individually for any deficiency (unpaid balance on the note after foreclosure), including getting a judgment lien against other property you own. Unless you can demonstrate grounds to rescind and cancel the note, such as fraud or duress that compromises your original signing of the note, the note will be binding against you, and you will be responsible for paying the full amount due under it.
While having your name on the title does not change your payment obligations under the note, it would give you meaningful control over the house and the right to share in any equity in the house.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
