We are getting divorced – Do I have to sell the house? 

After making the difficult and emotional decision to get divorced following separation, there are so many questions and worries that can arise. One common concern for separating couples is what happens to the family home – will you have to sell it? The honest answer is, not necessarily but it depends on a number of factors considered below. Here, Brigid O’Malley breaks down Matrimonial rights and how financial matters are dealt with upon a divorce.

Who owns the property?

If you own the property in your sole name, then you have the right to remain living there and you do not have to sell unless there is an agreement to do so or a Court order. Your spouse may register Matrimonial Home Rights.

If you own the property jointly with your spouse, you both have the right to remain living there unless there is a Court Order setting out who can and cannot occupy the property. An Occupation Order is often made when one spouse requires protecting from the other spouse and the rights of occupying the property need to be determined to ensure the safety of a person and any children of the family. It should be noted that if either you or your spouse leave the property temporarily for any reason, you or they can re-enter the family home freely when the property is jointly owned, unless there is a Court Order to prevent this.

If your spouse is the sole owner of the property, then you still have a right to live in the property as their spouse, but you should consider registering Matrimonial Home Rights.

What are Matrimonial Home Rights?

Matrimonial Home Rights are registered with the Land Registry to preserve your (or your spouse’s) right to:

• Live in the property;
• Prevent your spouse from selling, transferring, or disposing of the property without you first being notified; and
• Request a Court Order to allow you to move back into the property if you have moved out.

It is straight forward to register Matrimonial Home Rights and there is no fee with the Land Registry to do so. It is a very effective way of preserving your rights in respect of the property. However, this is only a temporary solution as Home Rights end when divorce proceedings are finalised, so it is essential to resolve the financial matters generally before finalising the divorce.

How are financial matters dealt with upon divorce?

It is important to understand what the court will take into consideration when determining what a fair financial settlement should be and indeed whether any properties should be sold. The factors the Court look at are set out in section 25 of the Matrimonial Causes Act 1973.

The first consideration is the welfare of any children of the family and the remaining factors will be considered by the Court in order to determine what is a fair distribution of the marital assets in order to meet the needs of each of the parties. The starting point is an equal (50/50) division of the assets.

Each party has a duty to provide full and frank disclosure of their assets, income, and liabilities in financial remedy proceedings. This means each party has a legal obligation to be honest and disclose everything they own. This is an ongoing duty throughout the proceedings.

Firstly, we need to establish what the marital assets are (which will likely include the family home) and then consider how those assets should be divided.

So, do I have to sell the house?

The honest answer is… it depends.

Once we have determined what the matrimonial assets are (following full and frank disclosure), the next consideration is how those assets should be divided to achieve a fair financial settlement.

There are times when the family home has to be sold in order to release the parties from their obligations under the mortgage and provide each party with funds to rehouse themselves and the children, whether by buying another property or renting.

Sadly, sometimes there is not enough in the asset pot to go around and avoid the family home being sold.

It is possible for the family home to be transferred to one spouse, often with monetary consideration i.e., you buy out your spouse’s share in the property.

There can also be a deferred sale of the property where one spouse is allowed to remain living in the property until a “triggering event”, usually those events (although they can be tailored to each individual case) are:

1. If applicable, when the youngest child reaches the age of 18 or finishes full time education;
2. When the party that remains living in the property begins cohabiting with a partner or remarries;
3. The death of either party; or
4. An order of the court.

Once a triggering event occurs, the house is usually sold, and the net equity is divided between the parties. The amount of equity received by each party is either agreed between the parties or determined by the Court. This option is often used by couples who wish to allow the children of the family remain living in the family home for their minority. It provides a period of certainty for the children but also provides both parties with some funds from the sale of the property in the future.

Do we have to go to court to decide what happens?

No, but sometimes a court application is inevitable.

You and your spouse can agree the arrangements privately between yourselves or can attend mediation to try and resolve the issues between you. Solicitors can also assist by negotiating with your spouse/their solicitors. If an agreement is reached then we would advise you to have that agreement incorporated into a Consent Order, preferably on a clean break basis to prevent future financial claims against the other.

If it is not possible to reach an agreement, then an application for financial remedy can be made through the Family Court. This provides the parties with a firm timetable and structure, hopefully resulting in a settlement but if not, the case will be timetabled to a Final Hearing for a Judge to determine what a fair financial settlement should be.

A committee led by HHJ Stuart Farquhar published a report stating there were 30,993 cases considered by the Financial Remedies Court in 2020 and approximately 50% of cases settled before the Final Hearing.  Therefore, even if you have to issue financial remedy proceedings there is a high chance your case will settle without the need for a contested final hearing.

So, what next?

If you need advice about the family home following separation or about divorce and financial matters generally, please get in touch with our expert team of Family Solicitors who will happily assist you.