What Happens To The Family Home In A Divorce?

In divorce or dissolution of civil partnership proceedings it is often the case that parties have assets to divide. For many separating couples, the most valuable asset is the family home.

The family home is the centre of family life, and anchors many emotional ties, especially when your family includes children. So, it is to be expected that dividing this key asset may be difficult, emotional and contested.

Who gets the family home in divorce proceedings?

When determining what happens to the family home during a divorce, the housing needs of both parties are of concern, to present a fair and appropriate settlement. However, the overriding concern will be for the welfare of any children and the provision of a suitable home for them if involved.

Does the family home have to be sold?

As a divorce and finance lawyer, I am frequently asked; “does the family home have to be sold?”. There are three options for what can happen to the family home during a divorce.

1. Sell the property

The family home can be placed on the open market for sale and the net proceeds can then be divided between the parties in whatever percentage is appropriate in the circumstances. When considering a sale of a property the first concern will be is there sufficient equity in the property to purchase two new homes, or, at the very least, is there sufficient equity for each party to put down deposits on a new home.

If there is not sufficient equity for this to happen, then the approach is one of fairness; what is the fairest way of meeting the housing needs with the available resources. An important factor is the parties’ ability to obtain a mortgage. For example, the party with the greater income arguably will have a greater mortgage capacity thus will not need as great a deposit as the other party.

2. One person gets the house

The family home can be transferred to either party, with or without payment of a lump sum to “buy out” the other party.
When considering a transfer of property,the borrowing capacity of the party who seeks to remain in the family home is a crucial factor. That party must have the requisite borrowing capacity to take on the existing mortgage in their sole name, and in many cases, to raise an additional lump sum to ‘buy out’ the other party of their share.

3. A trust of land can be created

Creating a trust of land can be used when a home needs to be provided for one of the parties if younger children are involved and need somewhere to live until they leave school. When creating a trust of land, there are two common arrangements.

  • Mesher Order, where the family home is sold and the equity is released when an event occurs, such as the youngest child leaving full time education.
  • Martin Order, where the property is sold upon the death of the party living there.

This option is uncommon, as it is difficult to manage and seems unfair to one party to have to wait for their share of the property.

In summary, selling the family home isn’t the only option available to separating parties during a divorce.

Defective Divorce PetitionsHow Nelsons can help

Layla Babadi is an Associate in our Family Law team specialising in divorce.

If you need advice in relation to any aspects of divorce proceedings, please contact Layla or another member of our team on 0800 024 1976 or via our online form.

The team will be happy to discuss your circumstances in more detail and provide you with more information about the services that we can provide.