Saying goodbye to a dysfunctional relationship means an end to many habits and comforts, but what about when it comes to the family home? Here, we consider different ways of dealing with what is often the greatest asset in a divorce settlement.
The Matrimonial Pot
As part of a final divorce settlement, all assets are put into a figurative ‘pot’ and valued, with the idea of dividing this fairly between the parties. Although in England there is no black and white formula that dictates how assets are split, the general starting point for a marriage of “medium” length is a 50:50 split. Then, on the needs of each party and the provisions they made throughout the marriage, the split is revalued. A husband on a six figure salary would more than likely have to cough up some spousal maintenance, whilst the party who remains sole carer of the children of the marriage is more likely to retain the matrimonial home; after all, the Court’s main concern is that the children are taken care of, which includes providing them with a secure and familiar home.
In some cases, one party ‘buys out’ the other, which often includes offering them a greater sum of the matrimonial funds in order to keep the house with no strings attached. A Mesher Order provides for one partner receiving assets to even up the distributions, or if one agrees to receive deferred payments until the property is sold, the children move out or the ex-partner remarries.
Despite such an Order, the mortgage arrangements can remain as they were when the couple were married. Therefore, if both parties’ names were on the mortgage papers, they will remain so even after divorce; after all, a divorce does not change the status of ownership as far as the Land Registry is concerned. The downside of this is that it can make things very complicated when trying to obtain a new mortgage in order to buy elsewhere. Therefore, many ex-couples opt for a slightly more complex version of the Mesher Order which includes transferring the house and mortgage into the name of the primary housecarer, whilst the relocating party receives a percentage interest in the house, secured by way of a second charge in their favour. This arrangement is known as a ‘deferred charge Mesher’.
Valuing your Home
In the aftermath of a contentious divorce, it is often unlikely that ex-partners can agree on the value of the former matrimonial home. It is therefore highly advisable to get the matrimonial home revalued. In a situation of dispute between parties, the Court can order for a third party to value the house- this can be a surveyor or local estate agent- who is instructed jointly by parties and has a duty to provide the Court with an accurate, honest report and an accurate valuation of the former matrimonial home based on an in-house assessment and the current property market.
Whilst the Court see both parties of a marriage as having equal rights to the matrimonial home, the facts remain that if your name is not on the Land Registry documents, it is not officially yours. There have been instances where husbands who have independent ownership of the matrimonial home have sold the property without their wife’s knowledge or consent. To prevent this happening, solicitors advise that the party without their name on the Land Registry documents must protect their position by acting promptly. Entering a ‘Notice of Home Rights’ against the property would prevent the official owner selling the home without firstly consulting them first. Losing a dysfunctional relationship is one thing; losing your home is another.
Some people decide to move on and away from the scene of a marriage gone sour. Whilst this seems the simple option, there are of course complications here too. Firstly, there is no guarantee that the property could sell, and it is often the case that one party may find themselves living in a house that is just not affordable without their spouse’s additional income, and thus selling at a considerably reduced asking price just to prompt a faster sale.
Whilst experts advise newly-weds to consider renting- at least initially- it is always worth knowing your rights by discussing your asset, financial and living situation with a professional who can advise you of the best way to proceed.