Home Selling Guide: Article One – ‘What to do with your property when you get a divorce’?

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Divorce is a complex process that is often misunderstood. One of the most common misconceptions that people come across is that it is far from a quick way of cutting ties with your partner, particularly when it comes to finances and shared property.

Although we are property solicitors and not family law solicitors, we often get asked to get involved in dealing with property rights when people are going through a divorce. For many people, the matrimonial property is not only their biggest asset, it is also the place they call home. This means when people are going through a divorce, it is the most argued over asset. People may have lived in the home for 30 years and are now being told they must leave it or that it has to be sold.

This article aims to provide individuals who are in this situation with the options that are available to them. However, there is no correct answer and the route chosen will depend on the individual and their specific circumstances. Each divorce is different and therefore there is no one set-in-stone approach or answer that the Judge or the individuals will decide on.

Your Legal Rights To The Property During A Divorce

It is important to note that in most cases, financial ties will exist between a husband and wife whether you like it or not. This means that unless there is a binding Prenuptial Agreement stating otherwise, each of the partners has a legal right to live in the family home – even if one person’s name is not on the mortgage or the title deeds. Sometimes people assume that because they are not on the mortgage deeds, they have no right to live at the family home. It is essential that you do NOT just assume things - make sure you ASK questions!

If you purchased the property this does NOT mean you can just remain in the property following the divorce. That being said, if you are a legal joint owner of the property, you have the right of entry and occupation until such time as the Court approves a Financial Order. Accordingly, your partner or spouse will not be able to force you to move out of the property purely on the basis that your relationship has turned sour.

During a divorce there are two ways to decide what happens to the family home. One option is for the partners to decide matters between themselves, the other is to have the Courts do this for you.

Options

There are many options that you or the Court may decide will happen to the family home. These options are as follows:

  1. The matrimonial property is sold, and money is split to buy another home for both of you.
  2. One party buys the other out.
  3. Keep the home and not change who owns it. One partner could continue to live in it, perhaps until your children are 18 or leave school.
  4. Transfer part of the value of the property from one partner to the other as part of the financial settlement. The partner who gave up a share of their ownership rights would keep a stake or ‘interest’ in the home. This means that when it is sold, he or she will receive a percentage of its value.

What you should think about

What is best for the partners or spouses in question will, of course, depend on their personal circumstances. When considering what option to pursue, there are several things that you should think about. The first thing to do is work out what financial resources you can put towards housing.

For most people there will be a number of factors that they will need to consider such as:

  • Your savings and shares
  • The equity in your house (in other words, its value less the mortgage and the sale expenses)
  • Whether you can increase the mortgage or take out a new mortgage on a new property

It is worthwhile finding out what you may get for selling your house after the divorce. You may be able to ask an estate agent what the home would sell for. In fact, you could ask two or three estate agents to let you have a price guide. Whilst this will give you a good idea of where you stand financially, this should not cost you any money, whilst a formal valuation will.

You then need to make sure you find out what your mortgage is, in particular – you need to consider how much you still owe your lender. After a divorce and a house sale – and after paying off the selling expenses (estate agent’s fees and conveyancing fees) – what would you be left with? Is it possible to buy a home for each of the partners out of what is left, and if they add their other savings?

What should I do next?

Once you have worked out what your financial resources are and checked out how much each or both of you can borrow by way of mortgage, you then need to look at where you want to live.

You should be realistic about what you need from a house after divorce. Do you need the 4-bedroom house or could you downsize to a 2 bedroom house? The last thing you want is to have constant worries about debt as you move forward in your new life.

Both of you need to be housed appropriately. If you can agree what each of you has, then this will help as you move forward, too. It is likely to be unfair for one person to have a large house after divorce and the other not – particularly where there are children involved.

The question of how much you can afford to pay on a mortgage depends on your other expenses as well. You may find that you are travelling expenses have increased because it is further to work or to your children’s schools.

You should take legal advice about your housing situation from a divorce lawyer. You should think about what the best way forward is for sorting out these discussions. Through mediation or collaborative law, for example, you may be able to come to a divorce and property settlement that suits you, your spouse and – most importantly – your children.

Once you have sorted out an agreement, this should be put into a Court Order. Then both of you will be able to rely on the arrangement when you commit to your new purchases or any sale.

If you agree

If you and your ex-partner agree on what should happen to your matrimonial home, you can ask the Court to make the agreement legally binding. To do this, you need to get a Consent Order. Agreeing it between yourselves will save time, going through Court proceedings can take some time whereas agreeing on it yourselves can be a lot quicker.

If you have agreed to sell your marital home or in possession of a Court Order to do so, we can help with its Conveyancing Formalities. Contact our team today to find out more.

Disclaimer – our articles are designed to give you guidance and information.  There is no substitute for proper direct advice, particularly as everyone’s circumstances are different.  If anything in this article may affect you, please contact us for advice that is specific to your circumstances.

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