Regardless how you’ve come to this point, any divorce or separation is going to have its challenges – not just emotional, but financial and practical. One of the hardest parts is understanding what will happen to the home that you live in. Whether you both decide to sell your home, or whether you want to stay in the property and how and when the proceeds are divided.
The good news is that the process is exactly the same as any other house sale and most solicitors will be fully versed in the options that are open to you so there is plenty of support at hand. However the biggest challenge is ensuring that both parties are 100% clear on what outcome they want to achieve. If this is selling the property, then discussing in advance with the estate agent the numbers you’re looking to achieve should the right offer come in.
If you’re married:
There are a few options open to married couples, but the constraints usually are based on the financial situation of the couple and their now individual circumstances.
Sell the home and share the proceeds
In some ways this is the most simple option, but it can have its own challenges. For example understanding how the sales proceeds should be split – should this be 50/50 or are there reasons why this isn’t suitable? What happens if you can’t agree on this? It’s likely that your divorce solicitor would be involved in the early discussions to understand what split would be fair. Also setting some simple agreements such as what happens when an offer comes in and when will you accept an offer?
If you’re selling the house, will you both be left with enough money to move on? Will the equity in your house cover 2 deposits or are you simply looking to clear the mortgage and look at rentals/family to start with? What’s your bottom sales price that you’d be willing to accept?
If you can agree on the base requirements, then selling usually offers the best option to allow you to move on. But it may require some patience while the property is on the market, waiting for the right offer to come it. It could also mean that you have to continue to live under the same roof until the purchase is complete to give you enough money to move into new accommodation.
On the plus side, if you can negotiate your way through the issues highlighted above, selling the property is often the best route to achieving a new start for each party. However, it may require patience, particularly if homes in your particular locality are taking a while to sell. This may mean that a separated couple have to continue living under the same roof or find the money to rent alternative accommodation for one of them. Also be aware of all the costs you may need to pay out to sell the property and budget for any early redemption penalties on your mortgage (give your mortgage company a call to find out if this will affect you).
Keep the property
Sometimes the most practical option, especially if there are children living in the family home as this will minimise any upheavals, changes to schools etc. However it can be difficult for the person moving out to get a new mortgage and the person remaining needs to be able to afford the bills so this usually only works where both parties have good financial resources.
One buys the other out
This option will only work where one party has enough finance to be able to buy out the other or the ability to get a mortgage under their own name to do so. Again this option is helpful where children are involved as disruption is minimised. Finding a good mortgage broker to help with this process will be very helpful as they will be able to let you know all the challenges with transferring a mortgage from two names to one. Also, make sure you can also afford all the utility bills, council tax etc. on your own.
Delaying the sale
It can be common to decide to delay the sale of the house until any children living in the house turn 18. However be aware of the impact that a court-ordered agreement on this can mean – will all the children be finished school by 18? Will the market be at the top of the peak or in the middle of a dip? It reduces the flexibility you have and also if you’re nearing the later stages of life, be aware it can be more difficult to get a mortgage at that point.
What if the ex-marital home is only in one person’s name?
Unlike with unmarried couples, all assets, whether jointly or individually owned, are regarded as assets of the marriage. A court can take into account when these assets were acquired, how they were bought, and any pre-nuptial in place. The court can also take into consideration a number of other factors including the length of marriage, whether there are dependants and even whether one of you gave up work in order to support or facilitate the other’s career.
If you’re unmarried:
If you are separating, but are not married you may be may cohabiting rights. Whilst you do not have the same clear rights as a married couple or civil partnership, cohabiting couples can be recognised under Scots Law in some circumstances. You may have had a legal agreement recognising your relationship drawn up to cover any pontential problems, but if not, section 25 of the Family Law (Scotland) Act 2006 gives pointers as to what the court is to look at when deciding if there is cohabitation for the purposes of the Act. These are the:
- Length of time the parties have been living together
- Nature of their relationship during that time, and
- Nature and extent of any financial arrangements in place during that time
It is irrelevant if one or other of the cohabitants happens to be married to somebody else.
How to start if you’re going through divorce or separation?
Whichever option is best suited to your situation, it’s important to get a clear valuation done on your property – ideally by a surveyor to give you a clear home report. Bearing in mind that it’s still a guidance and not a guarantee as to what your house will sell for depending on market conditions. If you cannot agree on the process, valuation or what will happen to the property, the court can make these decisions for you.
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