Should we wait to divorce until the house is sold?

Often in the context of divorce, the same or similar questions are asked to lawyers. In this series of articles “The most frequently asked divorce questions” our family law attorneys will answer some of these questions.

Question:

Should we wait to divorce until the house is sold?

Answer:

When you and your partner have decided to get divorced, there are probably several questions on your mind. One such question may be whether to wait until the marital home has been sold before getting divorced. TEN would be happy to advise you on the various options regarding the marital home upon divorce.

For the sake of clarity, we note that when we talk about being married and being divorced in the following, you are only divorced once the court ruling pronouncing the divorce has been issued and entered in the marriage register. Sometimes people have been separated and no longer live together long before that but that is different from being officially divorced. By the way, for married people, unlike before, there is no legal obligation to live together at all as is wrongly assumed by many people.

If you own the marital home together then you can sell the home, the home can be divided to either of you or the home remains undivided with either of you continuing to live in the home.

Sale of the property to a third party

The marital home may be sold to a third party. During the divorce proceedings, agreements can be made on the division of the proceeds or debt arising from the sale of the marital home. These agreements can be set out in a divorce covenant or unilateral requests about this division can be made to the court.

Besides agreements on the division of the proceeds or debt of the marital home, other agreements should also be made. Such as, who will continue to live in the marital home while it is for sale? How will the burdens of the home be divided between the parties when the other spouse leaves the home? What will be the costs related to the maintenance of the home during and after the divorce proceedings?

In addition, agreements should be made on the sale price, the offer price and the sales process.

It is not necessary to wait with the divorce to sell the marital home to a third party. The house can be sold both before the actual divorce and afterwards. However, you should be aware that as soon as one of the partners leaves the marital home, this may affect the mortgage interest deduction. It is therefore important to get tax advice on this. For example, in the year you separate, you may still file a tax return together as tax partners and there are regulations regarding mortgage interest deductions.

Allocation to one of the spouses

Besides selling the property to a third party, the marital home can also be allocated to one of the spouses. The spouse who wants to be allocated the property will buy the other spouse’s share of the marital home, so to speak. Agreements on this should also be made during the divorce proceedings. To allocate the home to one of the spouses, the value of the home needs to be known. The value at which the home is allocated to the other spouse is the so-called “fair market value”. This value can result from an appraisal report, for example. Please note that if you as spouses agree on a value other than the ‘fair market value’, it may be a gift or a form of alimony.

Allocation to one of the two spouses in case of community of property can only be effectuated (i.e. the delivery of the part of one spouse to the other via the notary) after the marriage has been dissolved. However, prior to the dissolution of the marriage, agreements can already be made on all conditions related to this allocation and these will be laid down in the divorce covenant or, if the spouses cannot agree, decided by a judge at the request of (one of) the spouses in the divorce proceedings.
If there is a prenuptial agreement that excludes community of property, a marital home that is jointly owned can already be assigned and one spouse can transfer his or her share to the other spouse via the notary. It is a good idea to get legal and tax advice on this as well, and to have clear agreements on this to avoid any disputes, for example on who bears the burden of this property during the still existing marriage. After all, as long as there is a marriage, it is not self-evident that all the burdens relating to this property should be borne solely by the owner of the property.

You should also be aware in this case that in the event of any death of the owner of the property during marriage with prenuptial agreements, the property may still accrue to the other spouse because he or she is an heir. This can be arranged differently by will and you can get good advice on this too from us.

Leaving the property undivided

If selling the home is not an option for both spouses and attribution to one of the spouses is not possible or desirable, the marital home can remain undivided for the time being. Here too, it is advisable to make clear arrangements. There can be several reasons for leaving the home undivided, for example because the housing market at the time of divorce is unfavourable and therefore an acceptable price cannot be achieved, leaving you both with a residual debt. Or because you want your children to live in their familiar home.

Agreements on leaving the property undivided should be made during the divorce proceedings. Besides agreements on the undivided property, other agreements should also be recorded. For example: will one of the parties continue to live in the marital home? Who will pay the mortgage interest? Who will maintain the property and what about maintenance costs? Here again, taxation plays a role and it is important to get legal and tax advice.

Still have questions?

Are you getting divorced and own your own home? Then our lawyers could advice you. We always consider in consultation with you what the best solution is for your situation.

The most frequently asked divorce questions

Often in the context of divorce, the same or similar questions are asked to lawyers. In this series of articles “The most frequently asked divorce questions” our family law attorneys will answer some of these questions.

If you have a question you would like to see answered in the next ” The most frequently asked divorce questions“, please let us know!