What Happens to Your Home When You Divorce?

Posted by familylaw on 19th December 2011

The family home is often the most substantial asset that you have, and it is therefore usually the main focus of financial relief disputes.

Deciding how two households are going to be financed from a source of income usually utilised for one home causes stress and anxiety. Unless you have sufficient financial resources to allow one of you to remain in the family home (a popular option when there are children involved) it is likely that you will have to sell the property in order to release enough capital to enable both of you to purchase homes separately.

However, sale is not the only option.

The court’s first concern is that your children are provided with ‘suitable accommodation’ for themselves and the resident parent. Suitable accommodation does not have to mean the family home, if this exceeds the needs of the resident parent and children. In this situation the court can order the property to be sold and the proceeds of sale to be distributed allowing each party to purchase a smaller property that will meet their needs more appropriately.

There are a number of options that the court has:

An Order For Sale of the Home and Division of the Proceeds Of Sale

Where there is sufficient equity in the marital home to enable you both to buy adequate accommodation for your needs, the court could order the family home to be sold. The proceeds of sale would then be divided between you and you would have to find alternative accommodation. Obviously, the disadvantage of this is that your children will have to leave their childhood home and this may cause them to be upset and disrupted. The courts do recognise this and will try to avoid an order for sale if possible.

There may however, be no choice in the matter where there is not enough money to pay for the mortgage and outgoings on the matrimonial home. In those circumstances, a sale may be unavoidable.

A Transfer of House Into the Sole Name of One Person

Where one party wants a sale and the other does not, the party who wants to stay could purchase the other person’s interest. This could be achieved by re-mortgaging the home, using funds from elsewhere or seeking assistance from other family members. This would depend upon whether the mortgage company was prepared to agree to release the other person from their obligations under the mortgage. It would also depend upon how much the mortgage company would be prepared to loan. This will depend upon the other person’s income levels and the amount of equity in the home. There are many variations on this type of settlement.

Sale of House but With The Sale Being Postponed Until a Certain Time or Event Occurs

To preserve both parties interests in the marital home, a ‘Mesher Order’ could be considered. The resident parent would remain in the home until a “triggering event” occurred. “Triggering events” vary but are usually the following:

• The youngest child reaching the age of 18.
• The youngest child finishing full time education, meaning secondary or tertiary education, whichever of a) and b) are the later.
• The person staying in the home remarries, or lives with another person as husband and wife for a period of 3 or 6 months.
• The person staying in the home dies.
• The person staying in the home voluntary leaves the property.
• The person staying in the home decides to sell the property.

The home would then be sold, or the other person be given the opportunity to purchase the others interest in the home, and the proceeds divided.

It is important to continue all payments relating to the family home including mortgage payments, insurances, endowment policies, household bills etc. Do not threaten non-payment or sale as this will lead to animosity and fear that could lead to a lengthening of the divorce process and an increase in costs. If you are unable to maintain payments on the home you should contact your local CAB for advice, and get in touch with the mortgage provider or landlord.

Need some advice? Get in touch today