Legal Question in Real Estate Law in Massachusetts

10 years ago I purchased a house with my boyfriend at the time (we are both on the deed). The mortgage is almost paid up. Currently we are both living in the house, however we are no longer a couple. I would like to purchase a home for myself only, and since my ex-boyfriend will be 62 soon, I was thinking about a reverse mortgage (so that we wouldn't have to sell the house in order to completely part ways): we would first transfer the ownership just to him (I am in my late 40's), then in return he would obtain a reverse mortgage for half of the value of the house, which I would take as my portion of this shared asset, and use to purchase my own home. Are there any risks in proceeding this way? Also, I assume this money is not considered "income" and would not have any tax implications, correct? Am I missing anything else? Thank you!


Asked on 11/28/12, 7:19 am

2 Answers from Attorneys

Christopher Vaughn-Martel Charles River Law Partners, LLC

Thank you for your question.

Our office represents co-owners throughout Massachusetts in negotiations concerning real estate, including negotiations involving the buy-out of a co-owner and even the forced sale of a home.

If you would like to read more about partitions generally, I invite you to check out our website at: http://vaughnmartel.com/lawyer/Boston_Massachusetts/Partition_Actions_pa11253.htm

I'm curious why you would want to use a reverse mortgage as a mechanism for your boyfriend to buy out your interest, instead of a traditional refinance and mortgage. If the property is worth $200,000.00, my advice would be for him to refinance his current mortgage and borrow $100,000.00. He would pay you the $100,000.00 and you would transfer all of your ownership interest to him.

I would not proceed without an attorney. Ownership in real estate comes with huge responsibilities and liabilities, and a mistake can cost hundreds of thousands of dollars.

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Answered on 11/28/12, 8:01 am

If you proceed as you describe, you will cause yourself many issues including once he transfers the property back to you, the mortgage will become due and payable to the bank.

You have a couple of options depending upon whether your ex-boyfriend is going to conitune to live with you or not. Assuming he is not going to continue to live with you, you can have him give you a mortgage which you pay over time, you buy him out and refinance the home, there are other methods as well but these are the two easiest methods.

All this depends of course on your ability to pay him or a mortgage. Please feel free to contact me to discuss your options.

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Answered on 11/28/12, 8:42 am


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