I’ve moved out of the family home – what are my next steps?

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The process of divorce is difficult for many reasons. One of the most personal and financially stressful situations that must be sorted is the continued ownership, or sale, of the family home. There are several possible options, including one party remaining in the home, the sale of the home, the conversion of the home into a business agreement between the divorcing parties, or retention of the home for the sake of the children’s stability.

What happens if someone wants to stay in the home? Firstly, we must asses if they can afford it. If they can, then an agreement can be reached which will allow for this to take place. However, it is often the case where neither party can afford to financially maintain the home on their own. In this case, the property will have to be sold.

While this article will touch on some of the most salient points for the distribution of real property in a divorce, it is very important to understand the complications and the gravity of the distribution of marital property. Therefore, it is highly advised that the divorcing couple seek the assistance and advice of a solicitor.

The very first decision that the separating couple need to come to is who will stay in the house, and who will leave. In the case of domestic violence or the possibility of the situation becoming harmful to one person or the other, it may be best for the couple to take on separate living arrangements. If safety is a concern, the court will usually take those circumstances into account and therefore physically leaving the home will not adversely affect the party who chose to move out. In the most severe of cases, if domestic violence is a genuine concern, and one party is refusing to leave, the other party can request a court order for occupancy under section 114 of the Family Law Act 1975.

If danger is not an issue, then it is important to take the following into consideration;

  • Can the parties afford the cost of two separate living arrangements?
  • Are there children involved who would be better suited to staying in their current home?
  • If the parties cannot afford to live separately, are there arrangements that can be made to reduce the stress of living together?
  • Is it possible for one parent or the other to stay with family or friends to reduce the need for the expense of two homes?
  • Can the spouses share the home, alternately, which will allow each of them to have some space but still maintain the family home for the children?

Each of these considerations requires both a personal review of the circumstances and a financial accounting of what is truly affordable.

In the event that one party or the other will be keeping the home, the title can be changed to the name of the person who will take the property in its entirety. To do this the couple will require the assistance of a solicitor. Financial information will need to be procured and presented by the party wishing to keep the home. The mortgage lender will need to be consulted for the new mortgage to reflect a single owner. The financial responsibilities of the loan and the title will need to reflect that ownership now resides with only one person. In this event, it is highly likely the value of the property will still need to be determined and the equitable distribution of the same, calculated. This will allow for the party who is vacating ownership of the home to still receive their fair share of the monetary value of the home. This value will have to be paid out of the equity in the home, or from the assets of the spouse who is buying the home.

In some instances, the parties will consider the home and investment for either their children or their separate futures. When this happens, spouses may decide to maintain dual ownership of the home. This agreement can be drafted and signed in the form of a contract. The contract can specify the percentage or value that each party will own in the home, separately. It may also take into consideration how long the agreement will last; for example, until the children graduate from high school. It is highly likely the agreement will also address who will reside in the home i.e. one parent or the other, alternating parents, or possibly renters.  Finally, the agreement can specify a particular point in time that the property will be sold and indicate how the assets will be distributed at that time.

While there are always concerns about leaving the home prior to the divorce, the court usually will look beyond the need for one partner or the other to move out. Instead, if the home is going to be sold, then the court will make an equitable determination as to the division of the profits from the sale of the home. While the division is often 50% of the current value of the home to each, this is not always the case. In making the determination the court will consider the following:

  1. The financial and non-financial contribution of both spouses
  2. Separate property investments in the marital home
  3. The overall value of the marital asset pool
  4. The future needs of both spouses
  5. Fairness of any proposals by either party
  6. The duration of the marriage, overall

Lastly, it is important to remember that there are specific deadlines, subsequent to the granting of a divorce, within which property decisions and distributions must be made. In most instances, it is one year, or 12 months, from the date of the final divorce decree.

Because of the vast number of rules and options available when attempting to divide an asset such as a marital or family home, it is best to seek the advice of a solicitor. Using a well-informed experienced solicitor can help a couple more easily navigate the various steps required in all of the possible options.

If you find yourself in need of assistance with this or any other legal issue, please contact the law offices of Owen Hodge Lawyers. At Owen Hodge, we are always happy to assist clients in understanding the full ramifications of any and all of your legal needs. Please feel free to call us at your earliest convenience to schedule a consultation at 1800 770 780.

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