Monthly Archives: August 2014

Real Estate and the Differences between Marriage, Domestic Partnerships, and Civil Unions

If you’re purchasing real estate with your partner, you may be unprepared for the many different laws concerning who actually owns the property and how things are divided.  That’s because things differ from state to state.  However, most state laws regarding same-sex couples and real estate can be divided into four categories depending on what the state offers.

Marriage

Real Estate Marriage DifferencesIn states where same-sex marriage is recognized, same-sex couples are treated exactly the same as opposite-sex couples.  Married LGBT couples take title of the purchased property jointly and have all of the rights, protections, and obligations that straight couples have.

Civil Unions

In the states with civil unions, LGBT couples have many of the same rights that opposite-sex couples have.  They may hold property through tenancy by the entirety, which means they own it jointly without the need to divide the property.  One spouse may not sell their interest in the home without the other’s approval.  Upon the death of one spouse, the survivor automatically gains the full rights to the house.  Tenancy by entirety provides a number of other benefits that were previously only available to married opposite-sex couples.

The downside is that those in a civil union may not be able to receive all of the benefits that a marriage offers because a civil union is a fairly new concept and isn’t necessarily seen as being equal to a marriage.

Domestic Partnerships

Domestic partnerships provide some rights to couples who are unmarried.  In most cases, the gender of the two people entering into the domestic partnership doesn’t matter.  However, in some cases, these partnerships do not convey as many rights as a marriage or civil union.  As of August 2014, three states offer domestic partnerships.  In Oregon and Nevada, domestic partnerships are equal to marriages and provide all of the rights thereof.  In Washington, however, domestic partnerships are only offered to couples who are over the age of 62 and do not provide any benefits in regards to property.  The domestic partners are treated as separate, single people.

Other States

As of 2014, the majority of states do not recognize gay or lesbian marriages, civil unions, or domestic partnerships.  In these states, same-sex couples receive no benefits or protections when purchasing real estate together.  Since tenancy by entirety isn’t an option, these couples have to resort to tenants in common or purchase property as joint tenants with right of survivorship.  While these options do offer some rights, they don’t provide the same rights or protection that married couples receive.

5 Home Buying Pitfalls for Same Sex Unmarried Couples.

Same sex unmarried couples face a different set of legal issues than married couples. Failing to plan for the future is the number one mistake that partners make. Some of the home buying pitfalls for same sex unmarried couples are outlined below.

images (1)1. Consider putting both of your names on the deed. While it may be tempting to purchase a home with only one of your names on the deed, the partner’s name that is left off will a legal right to the home. This is true even if that partner contributes to the household and helps pay the mortgage. Note that there are other estate planning methods that can be used to protect a partner’s interest if his name is not on the deed. For more information, see our article Gay Couples, Estate Issues and Real Estate.

2. Failing to agree on what percentage each partner will own in the home. Unless you agree on this issue beforehand and either hold title by tenancy in common, where each partner can own the same or a different percentage of the real estate, or create a legal partnership agreement, you will both own the home equally in almost all states according to Nolo Law for All. This pitfall may become an issue if one of you pays a larger percentage towards the purchase or the expenses involved in owning the home. For more information, see our article Top 5 Ways to Protect Yourself When Purchasing a Home With Your Partner.

3. Assuming that each partner will pay half of the mortgage payment, insurance and taxes as well as the utilities and maintenance. If one partner makes substantially more than the other partner, it would fair to come to an agreement as to what percentage each partner will pay that both parties are comfortable with. Discussing this issue and coming to an agreement before purchasing your home can help avoid disputes down the road.

4. Failing to decide what will happen to the real estate should your relationship dissolve. If one of you moves out of the home, how will the real estate be dealt with? For example, will one partner have the right to buy the other partner out, will the home be sold to a third party, and, in that case, who will pay the bills until the home is sold? This issue should be discussed and your decision included in your partnership agreement.

5. Failing to create a will to protect your partner. Unless ownership of the home is held by joint tenancy with right of survivorship or a will is prepared that bequeaths the deceased partner’s ownership in the home to the surviving partner, the deceased partner’s portion will be distributed according to the laws of intestacy of the state of residence. Intestacy laws relate to who directly inherits from a deceased person and generally includes wife, children, parents and then siblings. Unmarried partners, even if they own a home together, cannot inherit according to the intestacy laws in all states.

Taking steps to avoid the home buying pitfalls for same sex unmarried couples will help protect both you and your partner in the event of death or dissolution of the relationship. The above information is not intended as legal advice. Same sex couples who intend to purchase a home together should consult an LGBT real estate agent from seasoned sites like GayRealEstate.com for expert help in the purchasing process.

5 Keys to Buying Rental Property with Friends

Buying rental property with your friends is a business deal and, as with any business deal, there are issues that should be considered before taking that step. Below are 5 keys to buying rental property with friends.

images (1)1. Be sure that your friends can be relied on. Entering into a partnership with friends who are not dependable or do not follow through with promises may not be your best choice for purchasing a rental home with.

2. Discuss how much you can collectively afford to spend on a rental property and what each friend’s contribution will be. You should also decide how you will hold ownership of the rental property. Generally, when friends buy property together, they hold ownership by tenancy in common. This means that each owner has an equal right to the property and can sell his interest without the other owner’s approval. Any number of individuals may own different percentages in one piece of property under this type of ownership. For example, you own 25 percent, a friend owns 25 percent and another friend owns 50 percent. Generally, the percentage of ownership is decided by how much each person has invested to purchase the property.

3. Create a written partnership agreement outlining the details of ownership and how future transfers of ownership will be handled. For example, if one friend decides to sell, the other partners have the first right of refusal. The agreement should also spell out the financial obligations of each friend and what will happen if one friend stops meeting his financial obligations. Other details to consider include who will be responsible for ensuring rent is collected and that the mortgage, insurance, taxes and maintenance are paid for? Who will be responsible for maintenance and repairs? It would also be wise to include a procedure for resolving disputes. For example, by unanimous vote or by a majority of the vote.

4. Consider forming a limited liability company, LLC. Purchasing rental property as an entity rather than an individual can help protect the owner’s personal assets. Each friend will become a shareholder, but you will not be personally liable in the event that the owners, you and your friends, of the rental property are sued. LLCs have the ability under law to conduct business including purchasing, owning and conveying real estate, the power to make contracts, and to borrow money when necessary.

5. Make sure the rental home is a good investment. An LGBT real estate agent will know and can help you find an investment property and assist you with the purchasing procedure.

The advice contained in this article is for informational purposes only. It would be wise to seek the advice of a real estate attorney to assist you with the legal aspects of buying rental property with friends.

Mortgage Tax Deduction and LGBT Couples

When you’re a same-sex couple and you’re jointly owning property and sharing finances, things aren’t always clear-cut or easy.  Lately, it seems like the laws are changing almost every day—the bans on gay marriage are being struck down, but then they’re immediately given a stay pending a review by a higher court.  This makes it very unclear whether things have actually changed or not.  One area in which many LGBT couples are confused is that of mortgage tax deduction.

LGBT Tax Deductions

Married couples or a single person with a mortgage can deduct the amount they pay every year in mortgage tax on their federal tax returns.  This has been a rather murky area for LGBT couples because even though they may both be on the mortgage, it was sometimes confusing to see how to divide the deduction.  This is especially true if they didn’t have a CPA or had a CPA who wasn’t very gay-friendly.  Two people who are not married, but share a mortgage can actually split the tax deduction—each would claim half of it.  But for some couples, this move didn’t make sense for them financially due to other factors.

However, now that the Supreme Court of the United States has ruled that the Defense of Marriage Act (DOMA) is unconstitutional, married same-sex couples can claim the deduction if they file their taxes jointly.  It doesn’t matter if the couple resides in a state with a ban on gay marriage or not—as long as they were legally married in a state that supports same-sex marriage, they can file joint federal tax returns because, now that DOMA has been repealed, the federal government must recognize their union.  They may not be able to file joint state tax returns, but mortgage interest may not be a valid deduction for state taxes anyway.  It varies from state to state.

With the changes in how marriage is defined and the differences in laws in each state, it’s no wonder some LGBT couples are confused.  When purchasing a home, be sure to ask your real estate agent how the deduction is handled in the state.  You can also talk to a CPA.  This is especially important if you’re not married and aren’t filing jointly since you may actually get a better deduction if one person claims the entire amount of mortgage tax.  This depends on many factors, though, and will be different for every couple.

Posted on August 22, 2014 in Buying a Home, Gay and Lesbian

6 Tips for Buying in a Fast Paced Market

When a real estate market is fast paced, homes sell quickly and buyers must make swift decisions to avoid losing a home that they have their heart set on purchasing. Following are 6 tips for buying in a fast paced market.

download1. Know exactly what you are looking for before you start your search so that you will know you found it as soon as you see it. Sit down and make a list of must-haves, then be prepared to overlook less important aspects of a home if it fits your overall requirements of a home that you would love to own.

2. Take a look at your finances and figure out what you can afford, then approach a lender and obtain pre-approval. In a fast paced market, it is imperative that you have your finances in order. A pre-approval letter will let the seller know that you are financially stable and increases the chances of your offer being accepted.

Note that pre-approval is not a guarantee that you will get a loan. It is a letter from a lender that its preliminary qualification determination indicates that you may be eligible for a mortgage of a particular amount.

3. Hire an LGBT real estate agent. They are generally the first to know about new homes that are placed on the market and may know of new listings that fit your needs before they are made public. An agent can point those homes out to you and help you avoid bidding to late and losing the home. In addition, a real estate agent who knows his market will be in a position to help you make quick, informed decisions. For more information on hiring an agent, see our article Top 6 Questions Every Gay Home Buyer Should Ask Their Realtor.

4. Be flexible! If you only allot two days a week or weekends for house hunting, you may lose out on your perfect home.  Be ready to go to showings on short notice from your agent. In a fast paced market, your flexibility can make the difference between being successful in purchasing your dream home or losing it to another buyer.

5. Do not get stuck on the little things. If the home has the must-haves that you decided on, is in good structural shape and is in a neighborhood that you would like to live in, make your bid. Updating the home to suit your tastes can come later.

6. In a fast paced market, if the home is reasonably priced and is what you are looking for, you should not offer a low bid. It would be smarter to offer the asking price rather than be outbid and lose the home. Your real estate agent can help you decide on a competitive offer that is not overpriced, and submit your purchase offer to the seller.

Note that your offer is not legally binding until the seller accepts and signs the document. The seller has the option of making a counteroffer to you if he or she does not agree to your offered terms. Contracts must include what is called “a meeting of the minds” in order to be binding. This means that, in relation to real estate, there must be an offer of either services or money and an acceptance of that offer in return for the real estate at issue. If the seller accepts your offer or you accept the counteroffer and both you and the seller sign the contract, it becomes legally binding.

Most contracts include language that dictates what happens if one of the parties default on the agreement. For example, if financing is a contingency of the contract and you find that you cannot obtain financing, you may lose any earnest money that you put down on the property once the agreement was accepted by the seller. If the seller defaults by deciding not to sell to you, you can sue him or her in a court of law for breach of contract.

In a fast paced market, everything happens quickly. We hope the 6 tips for buying in a fast paced market outlined above help you achieve your goal to purchase your dream home.

The Decline of the Gayborhood

Starting in the 1970s, many LGBT individuals began moving into the same areas.  These neighborhoods, which were also often home to gay bars, nightclubs, restaurants, and other businesses, became known as gayborhoods, gay ghettos, gay districts, or gay villages.  Some of the most well-known examples of these gay districts include the Castro area of San Francisco, the Soho district in London, and the Dupont Circle area of Washington D.C.  Many larger cities used to have very active gayborhoods.  However, today the trend seems to be moving away from these defined areas.

Are Gayborhood's a Thing of the Past?A Gayborhood is typically defined by certain streets.  The Castro area, for example, is defined as the area on Castro Street between 19th and Market Street and from Church Street to Eureka Street.  They are almost always very defined like this.  Many LGBT people elected to live in these areas because they felt safer.  They weren’t afraid that their neighbors would perform hate crimes against them or look down on them.  They were also often pushed out to these areas because their sexuality was not accepted.  That’s where the term “gay ghetto” comes from—a ghetto was originally referred to areas in Germany and other European countries where the Jewish were required to live.

Some gay districts were fairly nice, but others, especially early gay districts, were on the edge of the city or located in poor, working-class areas.  However, an established LGBT community often leads to gentrification of the area, turning it into a more expensive, nicer neighborhood.

But while these Gayborhoods were big during the 70s and 80s, today, many gay and lesbian real estate agents are seeing people move out of these areas.  This can be partly blamed on the gentrification—the areas have been built up so much that many people can no longer afford to live in them.  However, a bigger reason that some cities are seeing their gay districts slowly disintegrate is that many LGBT people no longer feel like they must live in a certain area.

Because of the increasing acceptance of LGBT people, the idea of living only in gay ghettos is a thing of the past.  Many look instead at school districts, distance from work, and other factors instead of the sexuality of their neighbors.  Some lesbian and gay people may even be hard pressed to tell you where the gay district of their home city is.  Of course, some of these areas do still exist.  If you’re looking to move to one, a good gay or lesbian realtor can help you find your dream home in a gay neighborhood.

How Gay Couples Can Buy a House Without a Breakup

Purchasing a home is an exciting but stressful life event and emotions can get out of hand. For example, disputes can arise if you prefer the cute little house on Leaf Street but your partner prefers the condo located closer to town, or the home one partner prefers costs more than the other partner is comfortable spending. downloadFollowing are some tips on how gay couples can buy a house without a breakup.

1. First and most importantly, sit down and talk! Discuss the top priorities of the type of home that you would like to purchase and come to an agreement on something that would work for both of you. For example, is a garage mandatory, how many rooms and baths would you like, and is a small lot or several acres preferred? Although your preferences may change once you begin looking at different homes, you will have an idea of the type of home that you would suit each of your preferences.

2. While you are discussing suitable homes, you should discuss how you want to own the home so that there are no misunderstandings down the road. For example, joint tenancy with right of survivorship, tenants in common or tenancy by the entirety. The ownership options vary depending on the state that you live in. States that allow ownership by tenancy by the entirety make it available to married couples only. For more information on forms of ownership, see our article Exploring Forms of Home Co-ownership for LGBT Unmarried Couples.

3. Put it in writing! Prepare an agreement that outlines all of the issues that you have agreed upon. You can add to the agreement as issues come up and you make additional decisions about buying a home together. Generally, the agreement is to resolve any potential disputes and is not a legal document. An agreement is only legally binding when it constitutes a legal agreement that a court of law will enforce. Those types of agreements must contain an offer and an acceptance where one party is agreeing to provide money, goods or perform services in return for something of value such as other goods, services or money.

4. Hire a real estate agent who specializes in working with LGBT clients. He will discuss the steps involved in purchasing a home and answer any questions that you may have. Having an agent that you trust will help relieve a lot of the stress involved in purchasing a home. For more information, see our article Top 10 Reasons to Hire a Gay Realtor for your Home Purchase.

Buying a home should be a fun adventure; relax and enjoy your search. We hope these tips on how gay couples can buy a house without a breakup will help you find and purchase your new home with a minimum of stress.

Five of the Most LGBT-Friendly Cities in the U.S.

If you’re considering a move in the near future, one thing that may factor into your decision is how LGBT friendly your new home is.  This is especially true if you’re currently living in a state in which gay marriage is not legal and may want to marry your partner in the near future.  Every year, a number of websites and publications put together lists of the most LGBT-friendly cities in the U.S.  Here are five of the cities that ranked highly in 2014.

#1: Long Beach, California – There are many different gay bars and other businesses in Long Beach, plus, of course, there are the beaches and the open, accepting atmosphere.  The city also hosts one of the largest Pride Parades in the U.S.

#2: Rochester, New York – Not a city many would think of when it comes to a great place to live, but Rochester has all of the ingredients to make it a great home for an LGBT family.  The city is located in the Finger Lakes area of New York, which is absolutely gorgeous.  The Park Avenue area contains a great number of gay businesses, plus the city hosts regular LGBT events (including a popular Pride Festival).

#3: Salt Lake City, Utah – Another surprising entry on the list: the home of the Church of Jesus Christ of Latter-Day Saints (better known as the Mormon church) is a LGBT-friendly city?  Some people don’t believe it, but the city does have a good number of gay bars/clubs and several LGBT neighborhoods.  Their Pride festival has even included some members of the Mormon Church who believe the church needs to change its stance on gay and lesbian rights.  Another factor to keep in mind is that Salt Lake City, unlike many other parts of the state, is made up of a wide variety of people.  The Mormons aren’t the majority.

#4: St. Louis, Missouri – You’ll find a number of gay and lesbian realtors in St. Louis who recommend moving to the city because of its progressive attitudes.  As of August 2014, there are three openly gay public officials, plus the city plays host to a number of gay rodeo associations and concerts.  St. Louis is a haven for LGBT citizens who are looking for a home in the Midwest.

LGBT Friendly Cities#5: Washington, D.C. – While the city is located in the south, a traditionally conservative area, the nation’s capital is very openly LGBT-friendly.  There are more than a dozen openly gay city officials, not to mention some very charming and friendly gay neighborhoods like Dupont Circle and Logan Circle.  D.C. has a number of popular gay-owned bars, clubs, and businesses.

Where Have All the Gay Neighborhoods Gone?

According to recent research led by Amin Ghaziani, a sociologist at the University of British Columbia, and released in his new book There Goes the Gayborhood, gay men living in historically gay neighborhoods have declined by eight percent in the last ten years. downloadGhiziani’s research noted that gayborhoods including the Castro district in San Francisco, Chelsea in New York and Boystown in Chicago are changing due to the number of heterosexual households moving into those areas and the number of gay men moving to heterosexual neighborhoods.

Mainstream American’s have come a long way towards understanding and accepting that gays are just like them with the exception of their sexual preferences. A study conducted by the Pew Research Center in 2013 found that 60 percent of the American public think gays should be accepted into society and that younger groups were more accepting than those 50 or older.

Greater awareness of gays, according to the American Psychological Association, began during World War II when formerly isolated gay men and women met worldwide as soldiers and volunteers. That fact, coupled with Senator Joseph McCarthy’s investigation into homosexuals holding government jobs in the 1950s, led to political demands for fair treatment of homosexuals in public policy, employment and mental health.

In recent years, the gay movement has accomplished some major victories. In 2013 alone, the following strides were made:

1. The Supreme Court of the United States ruled that the Defense of Marriage Act, DOMA, Section 3, was unconstitutional. That ruling required the federal government to recognize legal same sex marriages.

2. The Supreme Court of the United States dismissed an appeal in Hollingsworth v. Perry with the result of restoring same sex marriage in California.

3. Delaware, New Mexico, Rhode Island and Minnesota made same sex marriage legal.

Because of the above and other strides made in the fight for fair treatment, gays are increasingly gaining rights that were formerly reserved for heterosexual married couples. Gays can now be legally married in 19 states, and those states as well as the federal government must grant them the same rights as other married couples. Same sex married couples may purchase and own homes as a unit, rather than as individuals, have inheritance rights and may take advantage of state and federal benefits.

Traditionally, gay neighborhoods were created when gays set up their own communities because they preferred living in a place where they would be accepted and for safety reasons. With the increasing rights, acceptance and integration of the LGBT and heterosexual communities, gay neighborhoods are fading away.

It still makes sense to ensure the neighborhood you’re considering is “gay friendly” and to do that you can connect with a top gay realtor at www.GayRealEstate.com.

Protecting Your Interests with the Remodel Contractor

Hiring a reputable contractor and that you are comfortable working with him is one of the most important aspects of your remodel project. Following are some tips on protecting your interests with the remodel contractor.

images1. Ask your friends or your local gay real estate agent to recommend some contractors that they have had a good experience with on their remodel project. Their suggestions can help steer you to some reliable remodel contractors who do quality work.

2. Obtain an estimate from each contractor. Make sure you understand what the covers and that it contains a complete listing of all of the work that you would like completed on your project.

3. Check to make sure that the contractor is licensed. State licensing laws vary, but many states offer dispute resolution services and may have state funds available to help settle disputes and compensate the homeowner. In addition, licensing is a good indication that the contractor is qualified to do the job.

4. Do not sign the estimate unless it clearly states that it does not constitute a contractual agreement to complete the work. Instead, once you have chosen a contractor, draft a contractor agreement. The contract should cover work to be completed, cost, approximate timelines to complete the job and any other aspects of the remodel that you and the contractor are agreeing to. This will help ensure that there are no misunderstandings during the course of the work.

5. Include a payment plan in the contractor agreement. For example, 10 or 15 percent to begin the project and then payments at each phase as it is completed. Be sure to inspect the work to make sure it has been completed to your satisfaction before making a payment.

6. Payments to the contractor should be made by check. This method will ensure that you have proof of payment in the event that there is a dispute.

7. After the work begins, make sure that you monitor its progress. A good way to do that is to visit the site at the end of each workday. Check to see that progress is being made and that items that have been delivered for installation are the quality of material and the color that you wanted.

8. Subcontractors and material suppliers can put a mechanics lien on your home if they are not paid. Make sure they have all been paid before you release the final payment to the contractor. You can do this by requesting proof from the contractor, or releases from the subcontractors and material suppliers. The releases should list how much is owed and contain a statement that the lien will be released once the listed amount is paid. If the amounts have not been paid once the project is complete, pay them out of the final payment and remit the remainder to the contractor.

9. Do not make a final payment to the contractor until any final inspections required by state laws or county ordinances have been completed satisfactorily.

10. Make sure that you obtain all the paperwork, including warranty cards, from the contractor for the appliances and equipment that have been installed.

Protecting your interest with the remodel contractor will help ensure that the job goes according to plan and that it is completed in a timely manner. It will also make the remodel process less stressful so that you can enjoy watching your project come together.