When a married couple separate, they need to decide what will happen to the family home. Not only is it likely to be one of the largest financial assets of the marriage, but it may also represent sentimental value and security for any children.
Martin Kelly, Head of the Family Team at DMP explains the options for the family home as part of the financial settlement in your divorce and the ways the court may approach a dispute.
There are three options to consider:
- the house is sold and the proceeds divided between you both;
- one person buys out the other spouse; or
- the sale is deferred.
In deciding which option is best for you there are a number of things to think about, alongside the financial implications. For example, moving home can be an upheaval for both you and any children at an already difficult time. The family home may be close to the children’s schools or convenient for work. It is more likely to be near to your support network and any sale may result in you having to move out of the area. Your decision may also be affected by upcoming exams or children transferring to the next level of education.
Regardless of who owns the property, as you are married it is likely to be considered a joint matrimonial asset. If it is owned in your spouse’s sole name, you could register a notice at the Land Registry to prevent them from selling it until you have agreed your divorce settlement.
If it has been a short marriage, say one to three years, and there are no children, the contribution made by each of you to the property may be relevant in deciding how the equity should be split. This will not apply in a longer marriage and where there are children.
A valuation of the property will need to be included in your financial statement as part of your divorce. You will need to arrange for two or three local estate agents to provide a realistic market value. The average can then be used as the basis for negotiation. If there are court proceedings and the value has not been agreed, the court will make an order at the first hearing for a joint valuation.
Can I force a sale of the property?
If you want to sell and your spouse does not, you would have to apply for a court order. Whether or not the court will order a sale depends on your circumstances. The court will consider your and your children’s housing needs, the value of all the assets, your incomes and mortgage capacity.
Can I force my husband or wife to leave?
The court has power under the Family Law Act to make an occupation order in relation to the family home but this is only in cases of domestic violence and the court exercises this power rarely. If the property is in your sole name, your husband or wife has a right of occupation by virtue of your marriage. If it is in your joint names, they are a legal owner and therefore entitled to occupy. Even if they choose to leave, you cannot change the locks.
Transfer of ownership
Sometimes, as part of a financial settlement or under a court order, the property can be transferred from your joint names into one name, or from one of you to the other. This is straightforward if the property is mortgage-free, but, if there is a mortgage, your mortgage lender must agree to the transfer. They will usually only do this if the person who is keeping the property can afford to keep up the mortgage repayments.
Another option is that the house is kept as a home for the children until they are 18, or any other specified event occurs, at which time the house is to be sold and the proceeds divided.
The person leaving the house can register a legal charge over the property for their share, a bit like a mortgage. This is called a deferred charge because it defers a sale until, for example the youngest child reaches 18 or finishes secondary education or you marry again. You will have to agree how the bills and mortgage are going to be paid until this time.
Reaching an agreement
It is always best to try and reach agreement over the house rather than embarking on potentially expensive court proceedings. There are various ways of reaching agreement, such as mediation or collaborative law, which are often quicker and more cost-effective.
Whatever your circumstances, you should always seek advice from a specialist family solicitor before finalising a financial settlement in divorce to ensure you have protected your long-term interests.
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice, and the law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice on their own particular circumstances.comments powered by Disqus