NEW YORK (CNN/Money) -
Lisa Rothman jokes that she and Sonam Thunden had an arranged marriage. That is, one month after their real estate broker introduced the women, they vowed to love their Queen Ann Victorian duplex in sickness and in health -- and pay their mortgage for richer or poorer.
While married couples represent the majority of households in America, more unmarried couples, same-sex partners, friends, and yes, near strangers are living together these days. According to 2000 Census data, the number of unmarried partners living together grew 71 percent in the past decade to 5.5 million households.
These "non-relative" roommates aren't just renting together. Many are making what is, perhaps, an even bigger commitment than marriage -- buying and building a home.
In the case of Rothman and Thunden, both women were interested in buying the Oakland, Calif., house but didn't want to be solely responsible for the property. "I knew it would require a lot of maintenance," said Rothman. "So I called my real estate agent to see if she knew of anyone I could buy it with."
Several months after signing on the dotted line, Rothman and Thunden have declared the arrangement a success. But buying property with another person, particularly when you're not related by marriage, requires a little extra work on your part.
Will this partnership work?
Before you even think about buying property with someone else, you'll need to think about whether you'll not only be happy living under the same roof, but whether you share the same philosophies about fixing that roof when it leaks.
"People have very idiosyncratic approaches to property," said Frederick Hertz, an attorney in Oakland and an author of legal guides for unmarried couples. "You don't want to have a situation where you constantly disagree on things like when to fix cracks or leaks," he said.
Differences of opinion may come up not just with maintenance but with finances -- for example, when to refinance -- and lifestyle. How will your co-owner feel if you invite your boyfriend to live with you, buy a pet, have children or open a business out of the house?
Elizabeth Lewin, author of "Financial Fitness for Living Together" recommends that would-be real estate partners talk through every scenario before they go house-hunting. While you're at it, come clean about your finances, lest there be surprises when it's time to apply for a mortgage.
"You want to have a good understanding of the person's business and financial situation," said Hertz. "It's important to know whether this is a person who...pays his bills on time."
Making your offer
Although co-habitation is illegal in a number of states, including Florida, Massachusetts and Virginia, these laws are rarely enforced. In the case of Rothman and Thunden, the fact that they were two women buying the house may have even worked in their favor.
There were 37 offers on the house, and theirs wasn't even the highest. "The seller owned the house with her late sister, and I think she liked the idea of selling to two women," said Rothman. Besides, because the women were pooling their resources, there was no question that they could not only afford to buy the house but to also pay for the maintenance it needed.
In addition, while it seems that banks scrutinize every detail of your life before they'll lend you money for a home, most give little thought to whether you and your co-owner wear each other's rings.
"We don't care about the borrowers' relationships as long as they can handle their mortgage payments," said Alfred King, spokesman for Fannie Mae.
As you're going through the mortgage process, however, you may find that a lot of the paperwork and procedures assume that you're married. For example, when a couple applies for a mortgage, the lenders look at the combined credit score, says Hertz. But with non-married borrowers, each person's credit report can be considered, and this can create problems if one of you has a particularly shoddy payment history.
As a solution to one person's bad credit, buyers sometimes take out the loan and title in one person's name and later transfer partial ownership to the other. But watch out. In some areas non-married couples are subject to a transfer tax. "If I sell my interest to you and we're not married, that's a taxable event. If we were married, it wouldn't be," Hertz said.
Divvying up the property
There are essentially just three ways to own property -- as a sole owner, joint tenants or as tenants in common.
As you might guess, sole ownership means that, at least in the eyes of the law, only one of you owns the property. There are times when it may be beneficial to put just one name on the deed, such as if one of you has inferior credit or if there is a large discrepancy in income -- in which case there are tax benefits for putting the property in the name of the partner with the high income.
This arrangement, however, requires a great deal of trust on the part of the person not on the deed, not to mention some good legal advice. Hertz says that you can file a separate contract with your deed outlining the actual interest in the property, but this may cause more problems than it solves. For example, it may raise flags with the IRS or cause your creditors to think you're concealing assets.
Under joint tenancy, which is how most married couples buy, you each have equal stakes on the property. In most cases, right to survivorship is assumed, meaning that your share of the property is automatically given to the other owner when you die.
If you're buying property with a friend or partner, however, you may not feel the 50/50 relationship is appropriate. "Most co-owners feel there should be a relationship between money in and money out, either as a percentage or reimbursement of dollar amount," said Hertz.
Hence, most unwed co-owners opt to buy property as tenants in common. Under this arrangement you can legally own unequal percentages of the property, and each or your shares are spelled out either on the deed or in a document that is filed with it. Also, your co-owner will not automatically inherit the property when you die. Rather, the property will go to the person specified in your will.
When thinking about how you'll sign on the dotted line, do consider how things will play out if one of you dies or if you decide to part ways. For example, each owner may want to insist on having the right to buy out the other (or his heirs) in the event that one of you wants to sell or passes away.
Putting it all in writing
If fences make happy neighbors, contracts make happy co-owners. "Everything has to be put down on paper," said Lewin.
In fact, you might want to start drafting a contract as soon as you start looking for property together. This contract will vary depending on your relationship with each other and whether you'll be living in the same quarters or dividing the space. For people who are not in a relationship, it might cover everything from how to share the maintenance responsibilities and divide the living space to how you'll decide when to make renovations and repairs.
You'll probably want to address how you'll price the house if one of you wants to buy the other out and what will happen if the other passes away. You'll also want to put some lifestyle issues in writing. There will be less stress when boyfriends, children or pets start moving in if you've outlined some guidelines before the fact.
Of course, even contracts have their limit. "There are always going to be gray areas," said Rothman. "Ultimately, it's still about trust," said Rothman.