Divorce and Property Rights
When it comes to divorce and property rights, the family home is often the single most significant asset in a marriage and therefore what happens to the house in a divorce raises many questions.
On this page, we will look specifically at the separation of property in divorce and consider some of the methods in which property can be divided up with a property settlement agreement, as well as offering lots of advice on divorce and property in general.
Dividing property during a divorce and splitting finances is always difficult and legal advice should always be sought where possible.
Property split in divorce property settlement
There are several options for sharing the equity in a marital home between the divorcing parties, just as there are with sharing money, pensions, and assets.
Figuring out the best solution for a divorce property settlement will depend on the specific circumstances of your case and will generally require negotiation between the couple.
If you are able to agree upon the division of the family home without legal representation it will allow for a more affordable and less acrimonious separation.
In this section, you’ll find links to articles on property and divorce, written by our experts to help you understand important questions and issues regarding the division of a property.
To better understand your options when it comes to your divorce and property, read our latest article that explains how is property divided in a divorce.
Transfer of property ownership
Choosing to sell the property is best for some divorcing couples, while others may want to initiate a transfer of property ownership to one spouse. An alternative often seen as the best solution when there are children, and one parent would prefer to live with them in the family home.
When you transfer all or part of your ownership of a property to someone else this is called a ‘transfer of equity’. In property law, ‘equity’ simply means the value of a person’s ownership in a property.
The matrimonial home is the largest asset in most divorce cases. As a result, the ‘transfer of equity’ (when a spouse is removed from the property title deeds) is a crucial step in most divorce settlements.
A transfer of equity is a legal process that formally adds or removes someone from a property title deeds. It’s use in divorce settlements usually involves removing just one spouse.
Therefore, in a transfer of equity, the property is not sold and at least one original owner remains on the title deeds.
It should be noted that if you decide to start a transfer of property ownership when there is still a mortgage on the property you will require the mortgage lender’s consent.
This is because if the mortgage approval had been based on both spouse’s salaries, the lender will need to agree to continue with the mortgage, possibly based on just one salary.
6 ways to separate property upon divorce
Unlike other types of matrimonial assets, the family home will often be crucial to the day-to-day lives of both spouses, even after they separate.
This is especially the case in today’s property market where costs of buying or renting as a single person are often prohibitive.
So, what are some of the most common ways in which divorcing couples deal with a property when it comes to agreeing on a financial settlement?
In this article, we will look at 6 Ways to Separate Property Upon Divorce.
Property Settlement Agreement
A professionally drafted Property Settlement Agreement documents to the court how you intend to split your property and other finances (except pensions). This same service with a high-street solicitor can cost £2,000 or more.
We encourage every couple that gets a divorce through our services to obtain a financial consent order so that you can both move on with the confidence that no future claims can be made by either party.
Give us a call to speak to a member of our team in the strictest confidence. Or you can fill out our contact form and we’ll ring you back.
01793 384 029
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- Fixed-fee includes VAT with no hidden extras
- Our solicitor will complete the forms for you and process them with the courts
- Covers the sale/transfer of property & includes a clean break order preventing future claims
What financial assets or clauses are included in this service?
This Clean Break Consent Order service includes our qualified family law solicitors drafting the agreement and filing your application with the court to ensure it becomes legally binding. You can include the assets listed below in your financial settlement agreement:
- Clean break – preventing any future claims
- The sale/transfer of any property
- Savings and/or Debt provisions
- The division of any personal belongings
- Child and/or Spousal maintenance
- Lump-sum payments
- Business assets or investments
If you are looking to also divide pensions as part of your financial settlement you will need our Solicitor Managed Consent Order service as pensions are not covered under this service.
Solicitor Managed Consent Order – £599
For just an extra £200 our solicitor will manage your entire Financial Consent Order for you from start-to-finish, including the drafting and filing of the consent order under a one-off fixed fee payment.
Frequently Asked Questions
Can I Force the Sale of My House in a Divorce?
Whether or not it is appropriate for married couples who are separating or divorcing to sell the marital home will often depend on the family circumstances. The property can be sold if both partners agree, but can a co-owner force a sale of a house and under what circumstances can you force a house sale?
In essence, a co-owner cannot automatically force a sale of a house If the other co-owner does not agree.
They cannot just sell the property without first applying for a ‘force sale of house court order’, and the court will always take various factors into consideration.
The court will consider several aspects regarding family circumstances, but primarily whether the property is a family home to dependent children.
Other factors include if there would be adequate proceeds from the sale of the home to enable both partners to rehouse themselves, and any children comfortably.
How is Property Divided in a Divorce?
There are several options for sharing the equity in a marital home between the divorcing parties, just as there are with sharing money and assets.
Figuring out the best solution to how is a house divided in a divorce will depend on the specific circumstances and will generally require negotiation between the couple – possibly even mediation.
Some of the ways in which property can be divided in a divorce house split include:
- Selling up – one of the best ways of achieving a ‘clean break’ (i.e., so there are no lasting obligations for either spouse in terms of maintenance payments etc) will be to put the property on the market and divide any profit from the sale. Any cash from the sale can be put towards new individual mortgages, so this is a useful option if the divorcing parties do not have money for a new deposit.
- Buying the full share of equity – in the case of a joint mortgage, if either party has the financial resources to pay the full mortgage, they can purchase their former spouse’s share of the equity. This also provides for a clean break but will normally mean the buyer staying in the marital home or renting it out.
- Maintenance – if one divorcing party is in a stronger financial position, they may agree to move out and leave the marital home to their ex-spouse, whilst continuing to pay their share of the mortgage (or even the full mortgage). This arrangement may form part of the overall maintenance agreement, especially if there are children still living at home.
- Transferring the property – if a home is jointly owned and the mortgage has been paid off, one spouse may agree to transfer the property to their ex as part of the overall financial settlement.
If you are unsure as to which option is the best for your situation take a look at our simple guide: 6 most common ways to separate property in a divorce.
What Happens to Joint Property in Divorce?
Anyone with a joint mortgage who is planning to get divorced should inform their mortgage company immediately to discuss the best options for dealing with repayments going forward.
That said, our advice is that regular repayments for joint mortgages must continue being made as normal if the borrowers are separating or have got divorced – even if one (or both) has moved out.
This applies whether the divorcing couple are joint tenants or tenants in common.
Any failure to ensure that scheduled repayments are made on time, and in full, will be considered a breach of contract by the mortgage company; this can damage the credit ratings of both parties, making new mortgage applications more difficult and even potentially leading to a repossession of the property.
Is a Mesher order a good idea?
Divorcing couples with children can ask the courts in England and Wales to impose a Mesher order which stipulates what happens to the family home when a couple gets divorced.
A Mesher Order, also referred to as an Order for Deferred Sale, is a form of ‘Settlement of Property Order’ in which a trust is created, and within that trust the parties hold the property as tenants in common in defined shares.
The purpose of the Mesher order is to allow one spouse to remain living in the family home after divorce while preventing the sale of the property until one of the specified trigger events is met.
Trigger events could be the youngest child reaching the age of 18 or else leaving full-time education, or alternatively a fixed date sometime in the future, the spouse living in the home getting remarried to a new partner or cohabiting with a new partner for a period of say 6 months.
What Happens to Property Owned Before Marriage?
Any non-matrimonial property, inherited assets and other assets which were already owned by one party prior to the marriage are called pre-marital assets and are treated as distinct to joint finances for purposes of divorce; as such they will often not be counted as part of the matrimonial pot and may instead be retained in full by the relevant party.
But whether or not a court will decide to exclude property owned before marriage from the matrimonial pot depends on various case-specific facts, including:
- Passage of time – in a lengthy marriage, where either party owned property before getting married, this property may gradually come to be viewed as matrimonial property, even if it is not used as the matrimonial home, especially if it is not kept separate.
- Mingling of property – where a property was bought before marriage, it can end up being mingled with matrimonial property over time (eg if it is used as a family holiday home or income generated from it is used within the marriage). The more mingling that occurs (and the greater passage of time), the more likely that property owned before marriage will be added to the matrimonial pot for purposes of calculating a divorce settlement.
What is a Property Settlement Agreement?
A property settlement agreement essentially refers to the part of a financial settlement between two divorcing parties concerning any property which needs to be separated between the ex-spouses following divorce.
In most marriages, the property which needs to be divided just consists of the matrimonial home (i.e., where husband and wife lived during the marriage), but it can sometimes include second homes and investment property which is either jointly or individually owned.
There are several stages to creating a property settlement agreement:
- Negotiation– the divorcing parties must first discuss the options for dividing up any property which forms part of the matrimonial pot. This can either be done informally or through mediation which involves an independent specialist mediator.
- Agreement – once an agreement has been reached, this is generally written down and formalised in a document, with both parties signing it to confirm they agree to the terms. The overall agreement – which is also known as a divorce settlement – will generally include all the other aspects of financial affairs, as well as the property.
- Consent order – in order to ensure the settlement is enforceable, it will need to be turned into a consent order.
Who Gets the House in Divorce?
When it comes to divorce and property, separating couples will often put a lot of effort into deciding what happens to the house in a divorce, and this may involve mediation. There are several different options used for determining who gets the house in a divorce, but the most common are:
Selling up – The divorcing couple can simply put the house on the market and divide up the proceeds. Often the most straightforward choice is the ‘selling house after divorce’ option which can provide for a financial clean break. Money from the sale can be used for deposits on new properties by both parties.
Buying out – Another common method of dealing with a shared property is for one spouse to purchase the remaining equity from their former partner. This also provides a clean break, but it is only possible where one party has sufficient financial resources – either to buy the equity themselves or to increase their mortgage.
Maintenance – If there are young children from the marriage, the mother will sometimes remain in the property, and the father will move out and carry on contributing to the mortgage repayments as part of a maintenance agreement.
Settlement – When there is no mortgage on the property, one spouse could leave the house to their former partner in a transfer of equity as part of a financial settlement, possibly as part of pension offsetting.
In all cases, there is an overriding principle of fairness, with an initial starting point of a 50:50 split. If the divorcing couple fail to reach a mutual agreement with a consent order, the court may decide on their behalf and impose a financial order on both spouses.
Property Settlement Agreement – £399
This Clean Break Consent Order service is ideal for people that want to have a legally binding financial court order drafted and obtained through court without needing to spend thousands of pounds or having to deal with the court at any stage.