Divorce and Assets: Who gets the “family home”?
The decision to divorce can be a painful and distressing one for the whole family. Whether there’s only yourself and your spouse to consider though, or children in the mix as well, it’s completely natural for your thoughts to quickly move on to the family home. Do you sell it? Who lives there? What’s best for everyone concerned?
With property prices at an all-time high, the property ladder has never been more counter-productive for a quick sale. Plus, affordability criteria have made it ever more difficult for couples who are planning to buy together, let alone for the newly-divorced who are looking for a route back into the housing market on their own.
You’re not the first people to think like this; at Hylton-Potts, we’ve found this to be a top priority for most families, regardless of situation. There is so much change in your life on the horizon, and most people simply want to know where they stand, and how they can ease the whole situation. After all, there are a lot of factors to consider where property and divorce collide.
As your go-to blog for legal advice, we thought we’d focus today’s article on the various options open to you. Of course, if you’d like specifics about your own situation, we are only a phone call away.
Determining your assets
If you’re a regular follower of this blog, then you’ll already have read our last post on the financial aspects of divorce and the division of assets, including your property. Put simply, part of the divorce proceedings involves identifying and valuing all assets from the relationship, and deciding upon the split of those assets.
This could include property, cars, expensive jewellery and so on, but the key thing to remember here is that property will be evaluated regardless of who’s name it is in. Who remains in the family home will be dependent on individual circumstances and wealth at the time of the split.
So, what does this mean for you?
Buying vs Selling
While each situation is unique and we would always advise seeking professional legal advice, it is often the case that one spouse will buy the other out, and the other person keeps the house. This could be for a variety of reasons such as ease of situation, because there are children involved, or because the spouse who buys them out is the wealthier party.
If this is the best option for you, it means that one of you will have to transfer the ownership from a joint-name mortgage to just a sole name. While we’ll be able to help you complete the registration documents for this, it’s worth noting that your lender will often insist upon the involvement of a solicitor anyway, as in some cases, you may need their consent or action to switch the mortgage from a joint to a sole name agreement.
On the other hand, and often a better option if there are no children involved, you might decide to sell the property instead and simply divide the proceeds between you. You can consult a local property agent to determine the best and most realistic value, or agree upon a lower price if you want a quicker sale.
Your rights of occupation
You may be under the impression that all hope is lost if your home is solely owned by your partner, but this isn’t the case. In some circumstances, you are able to register for rights of occupation.
You may have come across this term before, and it’s definitely worth discussing with your solicitor if you think you may be eligible. If the family home is in your spouse’s name alone, you can protect your right to live there by registering a ‘notice of home rights’, free of charge.
It could be that there is bad feeling in the relationship, and you may be concerned that they could sell or mortgage your home from under you, in which case this is a vital step to discuss with a legal advisor as soon as possible. Either way, you should always be completely aware of your rights in divorce law, and even if your home is unregistered, you can still protect your rights by registering a Class F land charge.
However, in the same way that it is crucial that you understand your rights to stay in a property, it is just as important that you appreciate how those rights may be revoked. Aside from divorce, circumstances for this include the death of your spouse, a court order, and a release in writing by the individual who registered a notice of home rights.
What’s a divorce mortgage?
Recently, there has been much debate surrounding the new “divorce mortgages” being issued by lenders. Given the difficulty that the divorced section of the population experience upon trying to re-enter the property market solo, and the wishes of lenders to help and assist them, these factors have led to some building societies developing a strategy to help.
For example, Ipswich Building Society is promoting its Divorce Mortgage Programme as a chance for divorced individuals to strike out on their own. As many lenders refuse to accept child maintenance payments as a source of income, it has become increasingly difficult for these “mortgage misfits” to secure a loan for a property. By offering “more favourable” affordability checks for those in receipt of child maintenance payments, they hope to help support this emerging sector of the UK.
Here at Hylton-Potts, we don’t just help you understand the complexities of property law though. We have helped many families overcome the technical detail and confusing divorce legislation that can cause concern, and our experts are always on hand to answer any difficult questions, and guide you through the divorce process from start to finish.
If you’re going through a divorce, or if you’re considering it and want to know where you stand in terms of your mortgage and other assets, don’t hesitate to get in touch. You can call us on 020 7381 8111, or via email at [email protected].
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