The future of the family home after divorce proceedings
We have spoken before about the way in which the law approaches dealing with finances after a divorce.
The starting point for a financial settlement
It is worthwhile repeating a number of the basic principles:-
- Any arrangement, whether made by agreement or an order of the court, must be fair to both parties
- To achieve fairness, both parties must make full disclosure of their financial position so that the extent of the available resources is clear
- To achieve “fairness”, a mathematical formula is not used but rather a number of factors laid down by statute are taken into account and weighed in the balance
- Except in cases where a large amount of money is involved, meeting the reasonable financial needs of the parties is regarded as of great importance
- If there are children under the age of 18, first consideration must be given to their welfare
What about the former family home?
It is obvious that, in many cases, the future of the former family home is key to all other financial arrangements. Very often, the home is financially the most valuable asset.
Just as importantly, it is also the departure from the home by one party which is the signal, and the acknowledgement, of the physical process of the untangling of the broken relationship. The family home has often been the manifestation of the home-making instincts which are at the heart of the aspirations the couple had for their future.
The law, and the courts which have to apply the law, whilst understanding the emotional impact of separation and divorce, can do little or nothing to remedy that part of the upset that accompanies the breakdown of a relationship. The law is impartial and can only attempt the very difficult task of finding that elusive fair solution based on the available financial resources.
What court orders can be made relating to the family home?
The court has the power to order:-
- The transfer of the ownership of the home from the name of one party to the sole name of the other
- The transfer of the ownership from joint names to the sole name of one of the parties
- The home to remain in joint names but occupied by only one of them (usually with the children)
- The sale of the home and the division of the proceeds in whatever way is fair
If the home is to be occupied by only one of the parties, usually with the children, the court can impose conditions which will mean that the property will be sold when the children finish their education or if the remaining party remarries. On such a sale, the proceeds will be divided in the proportions ordered by the court.
How does the court decide on the order to be made relating to the family home?
In deciding which is the best option, the court will consider:-
- Are there any children who have to be housed?
- If so, is it necessary for the house to be kept as a home for those children?
- If both parties to the separation need a home for the future and there are young children who need to be housed, are there sufficient assets other than in the home to enable accommodation to be found for both parties?
- If there are insufficient assets except for the home, would it be fair to require the main carer and the children to move to a smaller home, or even into rented accommodation?
What about the mortgage?
Most people have a mortgage on their house, at least to start with. If there is a mortgage, then the agreement of the mortgage company will be needed if the ownership of the home is to be transferred from one name to the other or from joint names to the name of just one of the parties.
This is a situation which can cause problems, particularly if there is an issue over whether the party who is to remain in the property is able to afford the mortgage payments. Many mortgage companies are very reluctant to release one party from their obligations under the mortgage unless the remaining party is in a sufficiently strong financial position to meet the mortgage company criteria for borrowing.
The future of the family home is so often at the crucial core of many financial settlements arising from separation and divorce. It is apparent from what is said above that it is vital to ensure that all the available and realistic options are explored.