Divorcing or separating? What about the house?
What happens to a house in a divorce? This is the question thousands of people need help answering every year. Sadly, divorces are on the rise, and an increasing number of couples are being forced to divide their biggest asset — their home. Unfortunately, the process can be very complex, and it has the potential to make a very stressful event even worse.
If you’re about to start a divorce or legal separation proceedings, you both need to know where you stand.
I’m getting divorced. What is the first thing I should do about the house?
The first thing you should do is consult with a solicitor for advice. Things can get complicated if a partner on the mortgage agreement won’t be contributing to the repayments in the future. There are also legal obstacles to negotiate if you and your former partner are splitting payments. It doesn’t really matter who pays the mortgage in terms of liability. If repayments are late, anyone whose name is on the mortgage agreement is liable.
The moment you decide to break up, contact your mortgage provider to tell them what’s happening. Particularly if you have reason to believe that your partner won’t meet their repayment obligations, you need to take control of the situation. There is always a chance that your mortgage provider can help you with a repayment holiday or other methods of reducing your monthly commitments. Also, ask to ban your partner from remortgaging or releasing equity from the home without your agreement.
What are your legal rights when selling a home because of divorce?
You are a legal owner of your home if your name appears on the title deeds. However, don’t worry too much if your name never made it onto the deeds, as you can “register your interest” in the property with help from a solicitor.
Registering interest in England and Wales
The first thing to do is check with the Land Registry for England and Wales to see if you are, in fact, a named owner on the title deed. If you’re not, you or your solicitor can issue a “matrimonial home rights notice”. This is done by completing an HR1 form, which can be found on the GOV.UK website. Doing this will ensure your stake in the home you shared with your former partner is protected.
Registering interest in Northern Ireland
If you discover that your name is not on the title deed to your home, you can apply for a “matrimonial change”. This ensures that you’re informed when the house is sold or remortgaged. It’s usually best to apply for this notice with the help of a specialist solicitor.
Registering Interest in Scotland
Unfortunately, the legal picture in Scotland is a lot more complicated. You should contact Citizen’s Advice in order to ascertain your legal standing. Scottish law gives you the right to live in the home if you’re married or in a civil partnership, and depending on the circumstances you may also be entitled to a percentage of any sale price. However, you will lose these rights if you leave the home for a period of two years or more.
How will my house be divided during my divorce?
There are many possible outcomes when it comes to dividing the value of a home during a divorce. While many couples come to a mutually beneficial agreement without any involvement from solicitors, one of the following could happen if things take a more formal route:
- The property will be sold as quickly as possible and the proceeds divided fairly
- One person can formally buy the other out
- One person can become the sole owner with a legal change of ownership
- The house can be transferred to one partner as part of a wider financial settlement
If you’re in England and Wales and you’re not ready to sell the home you shared with your former partner, you can apply for a “Mesher Order”. This is a legal arrangement that allows one partner to remain in the family home until the 18th birthday of a child — after which time the property must be sold. A “Martin Order” ensures ownership remains split but allows one partner to continue living in the property. The law in this regard is a little more complex in Scotland, so it’s worth seeking legal advice well in advance.
What happens to property ownership if children are involved?
The best thing to do if children are involved is obviously to settle matters amicably. If this isn’t possible, the matter will be settled by a judge, and the need for a stable and secure home for the children will be of paramount importance. This means ownership might have to remain split until all the children reach the age of 18. It might also mean one parent is given the right to live in the home.
Can I transfer my share of the home to my partner?
The short answer is yes, but it’s not always so simple. For instance, if you’re taking on sole ownership, you will need to raise finance, and that means demonstrating to the bank that you can meet the monthly repayments. Selling the house after divorce is the simplest way to deal with things, but there are advantages to transferring ownership to one person. For example, whoever is taken off the mortgage will be free to apply for a new home loan. Also, untangling both your credit reports should give you a clean slate for the future.
How to sell a house quickly during a divorce
It is only natural to want all of the legal loose ends of a divorce tied up as quickly as possible. However, selling a house the traditional way is always fraught with uncertainty. Issues such as broken property chains and a failure to raise finance can scupper a sale, and delay your new start. But there is another way.
By selling your house quickly to a national home buying service, you can bypass the property market and secure the certainty you’re looking for. There’s no marketing, advertising, property viewings or price negotiations to worry about. An offer will be made based on current market conditions, and you decide whether to accept or reject it. The offer may not be 100 percent of the property’s market value, but it could be as much as 95 percent. And crucially, selling your home to a cash buyer in this way could mean you have the proceeds in your bank within weeks, rather than months.
Getting divorced is usually a traumatic time in a person’s life. However, by settling the issue of property ownership as quickly as possible, you can move on to the next chapter of your life without too much stress and heartache.