In a divorce, assets and debts accrued during the marriage are divided. The most valuable marital asset is usually the house. The largest debt is usually the mortgage. Deciding what happens to the house is often complicated and fraught with emotion.
If a house belonged to one spouse before the marriage, it usually falls outside the “marital assets” and remains the property of that person. The other spouse can be compensated for any increase in value he or she helped achieve (remodeling or upkeep) or mortgage payments the spouse helped make.
Otherwise, the house and the mortgage are addressed in the divorce settlement or judgment.
Can a Spouse Be Forced To Leave?
If a house is joint marital property, one spouse cannot kick the other spouse out of the house prior to the divorce without an order of exclusive occupancy from the court. Once this happens, the spouse who has been granted the order can forbid the other spouse from entry and can change the locks.
Both Parties Keep the House
Couples can continue to own a house jointly for an extended period after divorce. This is commonly done to provide a stable environment for children until they reach the age of 18. When this contingency is met, the spouse remaining in the house can buy the other spouse out, or the house can be sold.
Co-ownership is also common when one spouse wants to stay in the house but cannot afford to buy out the other spouse all at once. In a weak real estate market, a divorced couple may want to wait for housing prices to rise.
A co-ownership agreement should clearly state how the costs of house payments, taxes, repairs and maintenance are to be allocated.
There are risks to co-ownership. Continuing to carry the mortgage can make it difficult to get credit for other purposes, like buying another house. If one spouse is late making mortgage payments, this can hurt the credit rating of the other spouse.
One Party Keeps the House
The partner who keeps the house must refinance the home to remove the other spouse from any financial obligation. The divorce judgment should state the date by which this must be done. If the deadline is not met, the house can be sold.
The spouse whose name is removed from the title uses a quitclaim deed to give up all claims to, rights in and ownership of the marital home.
Before the divorce is complete, both parties should make sure that the spouse receiving the home will be able to qualify for a mortgage sufficient to refinance the property, in addition to insurance, repairs, maintenance, property taxes, utilities and other expenses of owning a home.
The House Is Sold
If the house is to be sold, language in the divorce judgment should describe what steps each spouse is expected to take to facilitate the sale of the home, a timetable for the sale of the home, and provisions for what will happen if the house is not or cannot be sold within a specified time.
When an offer is made, both parties must agree to accept or reject it. Upon closing, proceeds of the sale (minus commission to the real estate agents) are divided according to the terms of the divorce.
Call a Divorce Lawyer
The law surrounding who keeps the house in a divorce is complicated. Plus, the facts of each case and the law in each state are unique. This article provides a brief, general introduction to the topic. For more detailed, specific information, please contact a divorce lawyer.