Maybe it’s an apartment, a detached house or a bungalow. ‘Home’ looks very different, and has different definitions, to everyone. And when relationships break down, that very home becomes the subject of important discussions.
In divorce proceedings, the family home is defined as the property in which the parties last lived together as a couple and is treated as a special type of asset. This reflects the cultural and societal significance of the place we call home. The matrimonial home is treated differently from other property in a divorce settlement.
So what happens to the family home during divorce proceedings? Let's examine a few things…
Why is the distinction between matrimonial and non-matrimonial assets important?
The distinction is important because matrimonial assets are generally subject to the sharing principle. The starting point is usually that such assets should be divided equally between the spouses.
By contrast, non-matrimonial assets will normally remain with the party who owns them unless they are needed to meet the financial needs of the other party and/or any dependent children.
Is the family home a matrimonial asset?
Yes, in most cases, the family home will be considered a matrimonial asset.
Factors such as when the property was purchased, where the purchase funds came from, and who has paid the mortgage are generally less significant for the family home than for other assets. This reflects the special status that the courts attach to the matrimonial home.
Legal ownership of the property is not important. Even where one party purchased the home many years before the marriage, and the other party has made no financial contribution towards its purchase, improvement, or mortgage repayments, the property will usually still be treated as a matrimonial asset.
What are the options for dealing with the family home during divorce?
Transfer of ownership
The family home may be transferred to one party either outright, or in exchange for a lump sum payment or the transfer of another asset.
Immediate sale
The court may order the immediate sale of the family home and determine how the net proceeds of sale, after repayment of the mortgage and payment of selling costs, should be divided between the parties.
Deferred sale, or ‘Mesher order’
A deferred sale, sometimes known as a Mesher order, allows the family home to remain unsold until specified future events occur. These events, commonly known as ‘trigger events’, are set out in the court order and may include:
• The death of the occupying party;
• The remarriage (and sometimes cohabitation) of the occupying party; or
• The children reaching a certain age or completing their education.
The order will also specify how the net sale proceeds will be divided when the property is eventually sold. It will also set out arrangements for payments and costs in the meantime, such as maintenance, repairs, and mortgage payments.
This option can be particularly helpful where the party remaining in the property cannot obtain a mortgage in their sole name.
Transfer with a charge back
The property may be transferred to one party, but subject to a legal charge in favour of the other. A legal charge operates in a similar way to a second mortgage.
A formal charge document is key here, and will specify the circumstances in which the party benefiting from the charge can require the property to be sold, and their share to be paid. These trigger events are often similar to those used in deferred sale arrangements.
The charge document will also confirm how the interest of the party benefiting from the charge is to be calculated.
What is the court likely to do if the couple getting divorced cannot agree?
Every case is different and will be decided on its own facts. However, the court's primary concern is usually to make sure that any dependent children and their main carer are adequately housed. In practice, who gets the house in a divorce often turns on the housing needs of the children and their primary carer.
As a result, where the parent who will be the children's primary carer wants to remain in the family home, the court is unlikely to order its sale before the children reach the age of 18 or complete their education.
Need advice on dealing with the family home during divorce proceedings?
For many people, a home represents far more than bricks and mortar. It is a place of security, comfort, and shared memories. Unsurprisingly, uncertainty about what will happen to the family home can be a major source of anxiety when a relationship breaks down.
If you would like guidance on how the court may deal with the family home in your particular circumstances, please contact a member of our family law team.
