If an unmarried couple owns property together, what happens to the property if the couple separates, or no longer wants to own property jointly? One frequently sought option is to partition the property, in which the parties seek to each own a separate interest in the property.
All states, including Georgia, have a statutory right of partition, which grants owners of real property the right to divide their interests in this way. Statutory partition must follow a fairly structured process. People who own property together and want to partition it must follow this process, unless the result would be unjust. In that case, equitable partition is available, and the court may divide the property in a fashion that it finds would be just under the circumstances. A recent Georgia Supreme Court case, Vargo v. Adams, confirms that the manner in which property is jointly owned determines whether the right of partition is available. This case illustrates the pitfalls of partition for unmarried couples.
Adam Vargo and Brittany Adams were an unmarried couple who owned a home together as joint tenants with right of survivorship, meaning that should either of them die, the other would automatically become full owner of the home. Vargo had previously owned the home in his sole name, but deeded the property to himself and Adams as joint tenants.
When the couple broke up, Vargo filed a petition for statutory partition, which he later amended to a claim for equitable partition. At the trial, Vargo testified that because he made the down payment and almost all of the mortgage payments on the property, it would be inequitable not to partition the property in a manner that reflected his significantly greater contribution.
The court found that equitable partition is not available to couples, except in actions for divorce. The trial court judge advised Vargo to sever the joint tenancy. At that point, Vargo would be able to pursue statutory partition under OCGA § 44-6-160, or equitable partition if the statute did not provide an adequate remedy.
Seeking equitable partition, Vargo appealed this portion of the trial court's decision. The Supreme Court affirmed the trial court's findings regarding partition, namely that because the couple owned the property as joint tenants with right of survivorship, statutory partition was unavailable; because the couple was unmarried and the request for partition was not part of a divorce action, equitable partition was also unavailable. This is because the division of marital property in a divorce is always considered a matter of equity under Georgia law.
The Supreme Court concluded that the trial court had offered Vargo an adequate remedy: to sever the joint tenancy, which would create a tenancy in common. Vargo could then petition the court for equitable partition, which is available to tenants in common.
To understand what Vargo v. Adams means for Georgia property owners, it is necessary to understand the difference between a joint tenancy with right of survivorship and a tenancy in common. In a joint tenancy with right of survivorship, each joint tenant has an equal, undivided ownership interest in the property. The joint tenancy is created at the same time, with the same deed, and if one joint tenant dies, the property passes to the other(s) upon that person's death.
A tenancy in common, by contrast, can be created at different times, with different ownership interests (though no party owns a specific part of the property.) There is also no survivorship right. For instance, Ann might own property, and give a 30% interest to her friend Bob, keeping 70% for herself. Five years later, she might give a 20% interest to her friend Carl, which would leave her with 50%. If the property were sold, Ann, Bob, and Carl each would receive a portion of the proceeds proportionate to their ownership interests. If one of the parties died while owning the property, their interest would go to their own heirs, not to the surviving tenants in common.
Holding property like a home as joint tenants with right of survivorship generally offers more protections for unmarried couples. For instance, if one dies after many years, the other owns the entire property, rather than suddenly finding that they share it with their partner's family as they would in a tenancy in common.
However, Vargo v. Adams points out that in Georgia, a joint tenancy with right of survivorship is not without its dangers. Unmarried couples who are considering owning property together may want to reach an agreement at the outset as to what will happen if they break up. They should also keep meticulous records of their contributions to the property. Perhaps most importantly, unmarried Georgia couples considering embarking on the adventure of joint ownership of real estate should consult an experienced Georgia attorney to be certain that they understand all of their rights and responsibilities.