A Real Estate Prenup is a structured agreement that outlines ownership, financial responsibilities, and exit strategies for co-owners of a property. It ensures clarity and prevents disputes by addressing key areas such as contributions, maintenance, and what happens if a co-owner wants to sell.

Scenario:
Rachel and Sarah buy a home together as business partners. Without a Real Estate Prenup, they assume they will “figure things out as they go.” A year later, Rachel wants to sell, while Sarah wants to hold the property. With no agreement in place, they face legal conflicts and financial uncertainty. A prenup could have provided a clear process for selling or buying out a co-owner’s share.

Anyone purchasing property with a friend, relative, business partner, or unmarried partner should use a prenup to establish clear expectations and avoid future conflicts.

Scenario:
Mark and Lisa, a dating couple, decide to buy a condo together. They contribute equally but don’t discuss what happens if they break up. Without a prenup, if they split, they may struggle with who gets to stay in the condo or how to split proceeds. With a prenup, they can outline exit terms upfront to avoid messy legal battles later.

Yes, when properly drafted and signed, it can serve as a legally enforceable contract. However, consulting an attorney is recommended to ensure compliance with state and local real estate laws.

Scenario:
James and Kyle sign a handwritten agreement saying they will “work things out fairly” if one wants to sell. Later, Kyle decides to sell, but James refuses. Since their agreement lacks legal structure, Kyle has difficulty enforcing a fair buyout. A legally structured Real Estate Prenup would have clarified Kyle’s rights.

• Joint Tenancy: Co-owners share equal ownership, and if one passes away, their share automatically transfers to the remaining owner(s).
• Tenancy in Common: Co-owners may hold different ownership percentages, and their share can be passed down to heirs.

Scenario:
Alex and Jordan own a property as joint tenants. When Jordan unexpectedly passes away, Alex automatically inherits the property. If they had tenancy in common, Jordan’s share could have gone to his family instead.

Ownership can be based on financial contributions (e.g., down payment, mortgage payments) or any other mutually agreed method.

Scenario:
Chris contributes 70% of the down payment, while Taylor contributes 30%. They agree that ownership will reflect their contributions. Without a prenup, Taylor might later claim equal ownership, leading to disputes

• Equal split: Each co-owner contributes the same amount.
• Ownership-based split: Payments are proportional to ownership percentage.

Scenario:
Maya and David agree to split mortgage payments equally, even though Maya owns 60% and David owns 40%. Without documenting this agreement, David later claims he should be paying less, causing confusion.

Yes, you can designate exclusive areas for each co-owner (e.g., private bedrooms, offices) while keeping common areas shared.

Scenario:
John and Mike buy a duplex but don’t specify private areas. A year later, John starts using Mike’s space for storage, leading to frustration. A prenup would have defined who has access to what.

A guest policy should be agreed upon in advance, including how long guests can stay without approval from all co-owners.

Scenario:
Emily invites her partner to stay over every weekend, making her co-owner, James, uncomfortable. Without a prenup, there’s no limit. A prenup could set a guest stay limit (e.g., 7 nights) before requiring consent.

This depends on your agreement. Some co-owners allow leasing with written consent, while others prohibit it.

Scenario:
Samantha moves abroad for six months and sublets her room to a stranger without discussing it with her co-owners. The new tenant causes issues. A prenup could have required written approval before subletting.

• Right of First Refusal: The remaining co-owners may have a chance to buy the share before it’s sold to an outsider if it is agreed to in the Real Estate Prenup.
• Buyout Price: Can be based on an appraisal or a pre-agreed formula.

Scenario:
Josh wants to sell, but Lisa doesn’t want a random buyer moving in. Their prenup gives Lisa the first option to buy Josh out, preventing unwanted co-owners.

Some agreements require co-owners to hold the property for a set number of years (e.g., 5 years) before selling.

Scenario:
Mia buys with her cousin, intending to stay long-term, but her cousin wants to sell after 1 year. Their prenup’s 5-year minimum holding period prevents premature selling.

Most agreements include a mediation and arbitration process to resolve conflicts before taking legal action.

Scenario:
David and Nina disagree about renting out their unit. Since their prenup requires mediation first, they resolve it without expensive legal fees.

• Late penalties can be charged per day to encourage timely payments.
• Escrow fund contributions can cover missed payments temporarily, reducing immediate financial pressure.
• Persistent non-payment may trigger a forced buyout, allowing the remaining co-owners to take control of the situation before it escalates.

Scenario:
Olivia stops paying her portion of the mortgage for three months. Their prenup’s forced buyout clause may allow co-owners to purchase her share instead of going into foreclosure. They must act quickly to avoid putting the portage – and their entire investment – at risk.

Yes, but amendments typically require unanimous or majority approval, depending on what was agreed upon initially

Scenario:
Matt and Brian want to add new clauses to their prenup. Their agreement requires majority approval, so they update it smoothly.

The agreement should specify which state and local laws govern it to avoid legal uncertainty. There should also be a jurisdictional agreement between parties which will decide where the dispute will be resolved should there be a conflict.

Scenario:
Karen and Zoe own property in New York but live in California. They specify New York law to ensure their prenup follows local real estate rules.

• Review all details with co-owners.
• It is highly recommended to consult an attorney for the review of the Real Estate Prenup.
• Sign and notarize the final agreement.

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