My 32-year-old daughter finally bought a house with her boyfriend — but his dad is on the deed and I’m worried about what might happen if they break up. Should I be concerned?

What it means when someone’s name is on the deed to a home

Before you panic on your daughter’s behalf, there are a lot of unknowns. It is possible for a person — in this case, the boyfriend's father — to be listed on a deed to a home but not the mortgage. But there's not a lot of upside in that scenario for anyone other than the father.

When your name is on the deed to a home, that makes you a legal owner of that property and gives you the right to occupy or sell it. If you’ve discovered that your daughter’s boyfriend’s father is on the deed to the home they bought together, then chances are, he's on the mortgage too, and everyone agreed to purchase and own the home jointly.

Now on the one hand, if that's the case, it means your daughter's boyfriend's father is on the hook for making mortgage payments. That gives your daughter and boyfriend some protection. On the other hand, things can get tricky when there's a third owner — in this case, the father — involved.

If the father decided he wants to sell the home to make a profit and your daughter and her boyfriend want to stay, things could get messy, since the father has a legal claim to the property.

Thing could get even messier if it's only the father’s name on the deed, since that would make him the sole owner of the home. However, if your daughter is paying part of the mortgage, then chances are, she’s on the deed, too, unless something incredibly shady went down.

And of course any time family members enter into a financial arrangement, there’s the potential for relationships to sour. Your daughter and her boyfriend might also end up in a bad spot if the father isn’t occupying the home now but decides he needs to in the future for financial reasons of his own. As a partial owner, he has that right, but it could cause lots of conflict if that goes against your daughter’s wishes.

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How to protect yourself in a joint homeownership situation

Co-buying relationships — especially for those seeking a foothold on the property ladder — have been on the rise in recent years. But they do pose problems when things change or someone wants out.

Hopefully, your daughter, her boyfriend and the father worked out an agreement in advance and the three are all aligned on what will happen if the pair should ever split. But it’s not enough to just verbally agree to a plan, ideally they put something in writing.

The problem with having a third party — in this case, the boyfriend's father — on a deed is that he’s a legal co-owner of the home. If you’re entering into a similar arrangement for the financial benefit (such as help in paying the mortgage and making a down payment), you’ll want to map out a legal contract that outlines the terms.

That contract should cover points such as:

• Who pays what percentage of the mortgage
• Who pays for property taxes and upkeep
• Who does the maintenance
• What happens when one party wants to sell
• How any sale proceeds are divvied up

When deciding on a legal arrangement for owning a home with other people, you may be able to pursue a joint tenancy or a tenancy in common. With a joint tenancy, every owner of the home has to obtain the property at the same time and has an equal financial interest in it. And all decisions related to the home must be agreed upon by all owners.

With a tenancy in common, it's possible to have multiple homeowners, but to also have each party owning a different stake in the property. For example, if you're buying a home as a couple with help from a parent, you can set up a tenancy in common so that you and your partner each own 40% of the property while the parent helping out owns 20%.

The upside of a joint tenancy is that if one owner passes away, the property passes to the remaining owners automatically. With a tenancy in common, the owners of the property can pass their share along to any beneficiary they designate.

But this also means that if you have a tenancy in common and one of the owners wants to sell their share of your home, they have the right to do that, even if you oppose. With a joint tenancy, all co-owners would have an equal say.

It's a good idea to consult an attorney when you’re entering into this type of arrangement, as they can help ensure that all bases are covered. Hiring an attorney could be a means of protecting all parties involved.