Many issues arise in the course of a divorce proceeding but some of the most common (and most commonly misunderstood) relate to a couple’s marital residence. Who will live in the house while the legal action is pending? Can both spouses continue to reside there? Should they? Who’s responsible for maintaining the property (including general maintenance, payment of the mortgage, HOA, property taxes, etc.)? If I move out, am I sacrificing all rights to the property?
The answer to the last—and probably most important—question is No. Many clients mistakenly believe that if they leave a house during a divorce proceeding, the other party gets it outright. This is a myth.
By moving out of the house, you don’t give up your interest in the property—or any other substantive legal rights connected with owning the property. Until otherwise ordered by the Court or by mutual agreement with your spouse, you still retain the privilege of possession and the ability to profit from the sale or rental of the house. If while a divorce is pending, one party needs to address an issue involving the house, he or she can present the issue through a motion—though a Court will not generally order a sale or division of the house while a divorce is still pending, except when accepting an agreement of the parties or in emergency situations (e.g. foreclosure is imminent).
In California, community property law dictates that, in the vast majority of cases, each party is entitled to 50% of all community assets. While a divorce is underway, there’s usually insufficient information to determine a fair distribution of community assets, so the Court won’t permanently award the house to one party or another until it’s clear the other party will be awarded other assets whose value is equal to the equity in the house.
When children are involved
Of course, there are several factors involved in determining who should remain in the house while a divorce is pending. One of the key concerns involves any children of the parties.
For example, if the couple has lived in the house for the past decade, they may not want their children to undergo the emotional turmoil often involved in relocating elsewhere. In these cases, the best option may be for the parent who is primarily responsible for the care of the children to continue residing in the house with the kids. After that is established, both sides must work out if that parent can be solely responsible for maintaining the residence or if the other parent will need to contribute to payments and upkeep.
Even when one party remains in the residence with the children, he/she doesn’t necessarily get a greater ownership interest in that property. Any temporary arrangements made to address this issue can always be altered by a later agreement or a court ruling. A temporary order or agreement does not mean a decision has been set in stone.
As the divorce proceeding nears conclusion, the issue of final resolution of the marital residence is looked at more closely by both sides. While the house can be put up for sale at any time by agreement of the parties, this is certainly not the only possible outcome. The usual options for final disposition of the residence includes:
- One spouse buys out the other spouse and gets awarded the property to herself.
- One spouse buys out the other.
- The couple sells the house together and split the proceeds.
Another possibility involves what’s called “deferred disposition.” As part of a divorce settlement, both parties may agree to hold off on dealing with the disposition of the property until some future contingency occurs, such as the graduation from high school by their youngest child.
In any event, issues related to real estate should be addressed early and often during the course of a divorce. Speak to an experienced attorney to get more information on this issue.
Are you in need of legal counseling or have any questions about the above topic? The Law Offices of Ian S. Topf offer a free consultation in a variety of issues, ranging from family law/divorce, bankruptcy, and estate planning to criminal/DUI matters and landlord/tenant disputes.