Keep the House? Sell the House? It Gets Complicated During Divorce

By | September 16, 2017

Families going through a divorce face big decisions on some big issues. One of those is the family home. Should you keep the house? Should you sell it? In some cases, questions of what to do with the family house will threaten to eclipse other issues in a divorce. This blog post breaks down the common issues and solutions that arise regarding home ownership during & after a divorce.

Conflict can arise when each spouse has different priorities. For instance, one spouse might view the house a refuge from the stress of the world, while the other views the house a means to offset the cost of spousal or child support.

As always, selling a house during a divorce is a move that shouldn’t be considered without input from a good divorce lawyer. After reading this article, if you still have questions about this subject, consider scheduling a consultation with our office.

Common Problems Regarding Home Ownership During Separation, Divorce, or Dissolution

Home ownership can represent some significant challenges when a couple decides to divorce—particularly if one or both spouses want to sell the home before the divorce is finalized.

And while community property law applies whether or not a spouse continues to live in a home he or she partly owns, there are concerns about other factors that can arise — particularly when one spouse has moved out of the home.

These include questions of who will be responsible for mortgage payments, property taxes and insurance.

If the spouse who moves out is the primary breadwinner in the family, he or she may worry about finding a new place to live while being responsible for payments on the former residence. If the dependent spouse continues to live in the house, he or she may worry about utility payments, insurance and property taxes.

These issues will often be dealt with early in the proceedings and may include temporary orders for spousal support. But for many, the question of selling the house during the divorce so that both spouses can find locations more suitable to their new circumstances, may continue be of pressing importance.

Should You Keep or Sell the House?

The answer to this question will come down largely to the specifics of your situation. Are children involved? Is the home located near their school? What is the family income situation? What is the mortgage situation? How much equity is in the home?

Depending on the answers to these and other questions, it might make the most sense to sell the property. And as with all things related to the division of property during a divorce, this is often not a simple process. Continue reading to learn about some of the key roadblocks to selling a house during a divorce.

Temporary Restraining Orders

When a spouse files for divorce with the court, a series of automatic restraining orders are initiated (TRO). Among these is an order restraining either party involved in the divorce from transferring or in any way disposing of any property. In order to overcome a TRO, either a court order, or written agreement between the parties will be necessary.

Reaching an Agreement With Your Spouse

If there isn’t so much animosity or rancor between the divorcing couple before the proceedings are finalized, it could be possible to reach an agreement on the disposition of the house. It goes without saying a good attorney will be important during this type of negotiation.

Questions between the couples that will need to be settled include possible improvements to the property, selection of a real estate agent, determination of a sale price, which spouse will maintain contact with the real estate agent, and whether both spouses be responsible for approving offers or whether one spouse will be responsible.

It should come as no surprise that during some divorces, such an agreement can’t be reached before the marriage is dissolved.

When An Agreement Isn’t Possible

There can be a number of reasons why a couple won’t be able to agree on the sale of a house before a divorce is finalized. However, just because an agreement can’t be reached, doesn’t mean the house can’t be sold during the divorce. In some cases, a spouse may ask the court to issue an order on the sale of the house before the divorce is finalized.

To be clear, the court won’t issue such an order easily. However, the following couple reasons could be given as justification for such an order.

Attorney’s Fees

Some divorces are exceptionally complex and drag on for a lengthy period of time. These types of cases often involve large community estates, spousal support and child custody issues. It goes without saying that cases like these can result in large attorney’s fees. If it becomes clear that a party will be unable to cover these fees, the court may order the liquidation of certain assets (including the house) in order to cover those fees.

Foreclosure

If a couple fails to make the necessary mortgage payments or pay property taxes, the threat of foreclosure can arise. In such a case, a spouse can request that the court order the sale of the home immediately. When it comes to issues such as this, it’s important to think about the equity in the home and what you and your spouse stand to lose by having the house foreclosed upon.

Keep or Sell the Family House During the Divorce

The Buy Out

This option is only possible if one spouse has the savings or income to make a reasonable offer on the house in an effort to buy the other spouse out of his or her share of the property.

The beauty of this sort of arrangement is that it won’t be necessary to have a real estate agent list the property, then hold open houses and showings for potential buyers. If the money or assets are readily available to a spouse wishing to buy out the other spouse, this can be a convenient option. A buy out can either be done through a cash payment, or by offsetting other assets in the community estate.

As with any business deal, the way a buy out is executed must be done carefully. Ideally, this type of deal wouldn’t be done without the guidance and negotiating skills of a excellent family attorney.

Contacting an Attorney

If you are going through a divorce and questions have been raised about what to do with the house, contact an attorney to help you sort things out. Obviously, it’s a complicated issue, one that can be colored by any number of different factors.

At the end of the day, what matters is that you have a good attorney to give you quality advice, and help negotiate the best terms based on that advice. If you have questions about selling a house during a divorce, or some other family law issue, contact our office to see how we can help.

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