When you get a divorce, the property you lived in together is usually the largest asset. This is known as the former matrimonial home. Because it’s usually the largest asset, it can also be the subject of the biggest contention when you separate.
The first important thing to understand is how you own your property. In England and Wales there are two ways that you can jointly own property. They are Joint Tenants and Tenants in Common:
You both own 50% of the property. As Joint Tenants, there is a Right of Survivorship. This means if one of you dies, the other automatically receives their share of the property. This means even if you have made a Will and you want the property to go to someone else, it will not.
The property is divided between you as a percentage, which can be an equal or unequal shares. There is no Right of Survivorship between Tenants in Common. If one of you dies, that person’s share of the property will be passed on according to their Will if they have one, or according the Rules of Intestacy (inheritance law) if they don’t.
Changing the way you own your property together may be necessary as you go through your divorce so it’s important to understand the differences. Our Divorce Solicitors can advise you on the best options in your circumstances.
We're rated‘Excellent’When you get divorced or dissolve your civil partnership, you have several options when you’re looking at how to deal with your family home. These options include
You may need to get an Order from the Court to approve any decisions you and your former partner make about your former marital home.
These are some of those Court Orders which could be options for you. Again, getting legal advice from an experienced Divorce Lawyer will give you the best chance of getting the best outcome for you and your family.
Property Adjustment Orders include immediate sale, outright transfer, deferred trust of land or deferred charge. Let’s look at each of them.
The Court has the power to order the immediate sale of the former matrimonial home and the division of the proceeds. This is appropriate if the Court is looking to achieve a clean break between the couple. The Court will usually allocate a percentage rather than an actual amount and each person can use their share of the equity towards buying separate homes. But the Order for Immediate Sale will need to make sure that any liabilities are paid from the proceeds of the sale. This will include the existing mortgage, estate agents fees and Conveyancing Solicitor fees.
If the Court orders the sale of the former matrimonial home, it is possible that one person may receive a greater proportion of the equity. This normally happens if they are on a lower income as it will allow them to find a new home. Also, where there are children who are still minors, the Court must give consideration to the needs of the children when deciding what should happen to the family home. This is because the court will want to ensure that the children have an adequate home to live in.
If you want to achieve a clean break between you, but one of you wants to stay in the family home, you can achieve this using an Outright Transfer. Your equity will be transferred to your former partner who wants to stay in the property. This could be done in return for a lump sum payment, which is essentially the same as buying out the equity share.
The most important consideration in this situation is to make sure that the person who remains in the home can afford to stay and pay all outgoings. If you are the one staying and having the property transferred, you’ll need to check with the lender to make sure they are happy to facilitate the transfer. If not, you may need to remortgage or explore other financing options.
The Court may decide that neither an immediate sale nor an Outright Transfer is appropriate. Instead, the Court could Order that the home is held on trust in joint names and that the sale of the home is postponed until a triggering event occurs. This is rarely used in practice except for Mesher Orders and Martin Orders.
A Mesher Order creates a trust of land which you both hold as Tenants in Common in defined shares. The sale of the home is postponed until one of the following triggering events occurs. They are:
A Mesher Order is more commonly used when there are young children and the parties either don’t want to uproot them or disrupt their schooling. This option can also be used when the person who wants to stay in the property can’t take over the mortgage. The property stays in both names and the Mesher Order, along with the placement of a deferred charge on the title, acts as security over their share.
A Martin Order is similar to a Mesher Order. It creates a trust of land and you both hold defined shares as Tenants in Common. But, the person who is living in the property is given the right to occupy the former matrimonial home for life or until they remarry. This is usually used when there are no children and the person who is not living at the property doesn’t need the capital for re-housing.
This is another option to retain the former marital home. It works by transferring the property into the sole name of the person living there and placing a charge over the property in favour of the non-occupying person so they can retain their interest in the property. The charge cannot be enforced until one of the following triggering events occurs:
The Court can transfer a range of tenancies between spouses following receipt of the Decree Nisi. This is in accordance with the Family Law Act 1996. The tenancies that can be transferred include:
The Court will need to consider all circumstances, including the conduct each of the parties and their suitability as tenants.
If you have lived in the property but you are not on the legal title to the property, you are entitled to register home rights as a charge against the property.
But if there are multiple properties, you can only register home rights against one of them. This cannot be used where the property is held in joint names, both legally and beneficially by spouses.
It is important to note that Matrimonial Home Rights only give you the right to occupy and not be evicted or excluded from the home. They do not give you the right of ownership.
The home rights only apply where no Decree Absolute has been made and to property that has been occupied as the matrimonial home.
Unless the Court Orders that the home rights should continue, they will come to an end:
This is a complicated and important area of your divorce, which you need to get right. Get expert help from our specialist Divorce Solicitors who can help you to get the best possible outcome.
Whether you’re separating earlier or later in life, the most valuable asset in a divorce is often your family home. But when you’re in the autumn of your life, there are things to consider in divorce such as your mortgage capacity and matrimonial home rights.
It’s never too late to enter into a new relationship but it is important to plan for the future and think about your finances. And at this point in your life, there’s a lot to think about when entering a new relationship.
There’s a lot of paperwork involved in divorce, which is often referred to as ‘the divorce papers’. If you’re thinking of applying for divorce without a Solicitor, it’s very important that you don’t make any mistakes on the divorce application or the response form, as this can make the divorce process take a lot longer.
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