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.

So you’re not married but want to know if you have a claim on the house. Well, the short answer is that it depends on a couple of factors. Here, Lisa Brown explains why you may or may not have a claim on the house and how having children makes the situation slightly different. 

If your name is on the deeds

If your name is on the title deeds, then the answer is generally yes, although the level of that claim will depend on the documents you signed when you purchased the property.

But what if it isn’t?

If your name is not on the title deeds it is more complicated and it will depend on whether:

1. There was common intention to share the property
2. You relied upon that to your detriment, for example, you paid for renovations on that basis.

Part of the problem is that where parties cannot reach an agreement about this the law which applies (Trust of Land and Appointment of Trustees Act 1996- known as TOLATA) does not allow judges the level of discretion which they normally have in family cases.  This can lead to outcomes which just seem fundamentally unfair.

TOLATA is not designed with cohabiting couples in mind and, in addition, the way in which TOLATA cases are dealt with procedurally in terms of deadlines and costs rules is more aligned with commercial litigation than it is with family.  This can mean that people are left in a position where they just do not feel able to deal with a claim themselves and they cannot afford to pay solicitors.

Back in 2007 the Law Commission recommended that the law in respect of cohabiting couples be changed in England and Wales, but it just does not appear to be high up on the political agenda.  It is worth noting that the law in Scotland in relation to cohabitation did change in 2006.

Between 1996 and 2020 cohabiting couples in England and Wales increased by 137%.  There are also currently many couples living together who had to delay their wedding due to the Covid 19 pandemic and many more who, due to the economic impacts of the pandemic, may simply not feel able to afford to get married.  It is unlikely that any of them realise the legal ramifications if they separate and the limits as to what can be done legally.  It is a significant issue and one which needs addressing.

Common law husband/ wife?

Another problem in this area is the perception that, if you are living with a partner for a long time, you become common law husband and wife.  This is simply not true.  Whether you are living together for 3 weeks or 3 decades the law applied is the same.

What if there are children involved?

The situation is slightly different if you have children with your partner.  In those circumstances you can also have claims on behalf of them for housing needs to be met under Schedule 1 Children Act.   This arguably gives the court more scope for discretion to consider overall fairness, but it is led by the needs of the child or children.  As such, if for example, the court ordered that you could remain in the property to meet the housing needs of the children that arrangement would normally come to an end once the children are adults.

So, what can I do?

It is important that cohabiting couples consider the “worst case scenario” and if you are purchasing a property thought is given to whether one person is contributing more and whether that should be reflected in the title deeds.

Cohabiting couples can also enter into a cohabitation agreement to regulate what would happen should they separate in the future and also (if they wish) the arrangements between them whilst they are together, for example who pays which bills.  This can provide certainty and avoid potential stress and costs later down the line.

There may well come a time where there is a change in the law but, for now, if you are living with a partner in a property which one or both of you own, it is important to consider whether the title deeds of that property properly reflect how you see the ownership and, if not, seek legal advice as to how best to have this corrected.