Working out where you and your children will be living, when you go through a divorce or separation is one of the top priorities for people at this difficult time. It is no surprise therefore, that one of the most commonly asked questions of our mediators is who gets the house on divorce?
The family home is the largest asset for many people and one of the first areas where discussions on finances are based. Knowing where you are both going to be living in the future can help you move on with your life and reduce the stress and tension of living together in an unhappy household.
But what does the law say about property on a divorce? What should you be taking into account on these initial discussions with your ex? And what rights do you have? It can all be a bit of a minefield.
This blog tries to pick out the key parts of this difficult area of family law.
Six factors that are likely to be taken into account initially, when deciding who gets the house on divorce:
Are you married? The rules are very different if you are co-habiting and not married or in a civil partnership.
Where will the children be staying most of the time? Or will they be spending time equally between you.
The age and gender of your children. Any special needs they have and whether they could share a bedroom
How long you have been married or the length of the relationship prior to your marriage
What are you currently earning and what you could realistically earn (i.e., mortgage capacity)
Your ages
Six factors that are less likely to be considered initially, when deciding who gets the house on divorce:
Who bought the house/paid the deposit initially
Who made the mortgage payments
The house has sentimental value as it was an inheritance
You don’t want to sell the house as you are settled there
You don’t want to rent somewhere as it is a waste of money
Whose name the house is in (if you are married)
Let’s take a look at each factor in more detail
1. Are you married?
If you are not married, you do not have a claim to an asset that is not in shared names. If there is a property in shared names, there is a presumption that the asset is shared 50/50. That is unless you have a prior agreement or the deeds show a different split. (But most people don’t arrange that when they are busy trying to buy a house together with a partner).
If you are not married, but have children, you may be able to request you stay in the property whilst you make other arrangements. You may even be able to make a claim under Section 1 of the Children’s Act. It is a complicated area of law and you should definitely take good independent legal advice if this is the situation you are in.
If you are married, it can make matters easier. The former marital home is usually counted as an asset of the marriage. And marital law means you have more rights to assets than if you were not married.
2. Where will the children be staying most of the time? Or will they be spending time equally between you?
And
3. The age and gender of your children. Any special needs they have and whether they could share a bedroom or not.
Section 25 of the Matrimonial Causes Act 1973, often referred to as the Section 25 factors, are what a court will use to determine how the assets of the marriage should be divided fairly, including who gets the house on a divorce or whether it should be sold. Pretty much the first factor a court would looks at is what are the needs of each party moving forwards. And children are always prioritised in needs – irrespective of whether they are of the marriage or not.
There is no hard and fast rule when looking at needs, although where the children will be spending most of their time will be taken into account. If the children spend equal time which each parent, then needs for this area are considered equal. Other factors such as income and mortgage capacity would then be looked at.
Let’s look at a few examples:
Example One: You have a 5-bedroom house and 2 children, a boy and a girl, aged 7 and 13.
The children spend equal time with both parents.
Needs: Both parties need a 3-bedroom property. It is not reasonable for a 13 year old girl to share a room with a 7 year old boy. Therefore, it would be a difficult argument for one party to say they need to remain in a 5-bedroom property, unless a 3-bedroom property can be purchased from other assets. In this situation, it is likely the house would be sold and the proceeds divided up to allow both parents to purchase a 3-bedroom property.
Example Two: You have a 3-bedroom house and boys aged 2 and 4. They spend most of the time with mum and alternate weekends with dad.
Needs: Mum needs a two bedroom property as boys aged 2 and 4 could reasonably share a room together. But as they spend the majority of time with mum it needs to be looked at whether selling the 3-bedroom house would allow for her to purchase a 2-bedroom property instead.
Dad ideally needs a 2-bedroom property. But his needs would be seen as less than mum as the children only spend 2 nights out of 14 with him.
Example Three: You have a 4-bedroom house and two children aged 19 and 15. The older child is male and the younger child female. They spend the majority of time with their dad and see mum by their own arrangements.
Needs: The need is for a 2-bedroom house. The 19 year old is not counted as a child anymore. Whilst most parents agree that they still need to house children over 18, under family law, they would not be included as a child from a needs perspective. In this scenario, dad would need a 2-bedroom property. Ideally mum would also have a 2-bedroom property for when her daughter stays over.
These are not hard and fast examples of who would get the house on a divorce. But they show how consideration is given to where the children spend their time and how the age and gender of the children can play a significant factor in establishing the needs of each party.
4. How long have you been married?
Where you have had a long marriage or a long relationship leading into a marriage (for example, 15 years+ together) then the starting point for a division of assets, known as the ‘yardstick of equality’ is a 50/50 split. This is if your needs are also seen as equal.
If you have been married and in a relationship for a short period of time, then what you bought into the marriage could have a greater bearing. A childless couple, in a four year relationship, where one party already owned the house, would be less likely to share that house equally. What was accrued during the marriage would be taken into account and, in this instance, both parties would still need to be housed and both would require a one bedroom property.
5. What are you currently earning and what you could realistically earn (i.e. mortgage capacity)
Mortgage capacity can have a significant bearing on how the property should be divided up and indeed whether it should be sold.
Let’s take a look at the following case and see if you can relate it to your own situation:
Scenario:
A couple own a 4-bedroom house. They have two children that spend equal time with both parents. They agree they both need a 3-bedroom house to meet their future needs.
Property values:
A 3-bedroom house in their area costs £350,000. They need one each.
The equity in the 4-bedroom house, after costs and mortgage paid off is going to be £300,000.
Mortgage Capacity:
Party 1 has a mortgage capacity of (4 x income) of £250,000.
Party 2 has a mortgage capacity (4 x income) of £150,000.
Needs:
Party 2 should receive £200,000 from the sale of the former marital home. (£200,000 + £150,000 = £350,000)
Party 1 should receive £100,000 from the sale of the former marital home. (£100,000 +£250,000 = £350,000)
This equates to approximately a 67% / 33% split of the former marital home. Allowing them both to meet their future needs of a 3-bedroom property.
In the absence of any other assets, that is the only way, in this example, that both parties needs can be met. And the priority is to meet those needs, even if it means one party has a higher mortgage to pay off than the other. There is no other way to make it work for them both.
6. Your ages
Age is an important factor as it can impact on mortgage capacity and on how long you will be earning an income. Someone nearing 60 is less likely to be able to get a mortgage, for a long period of time at least, compared to someone aged 40. If there are no children or only adult children, and a significant difference in your ages, then an equal split of the property may not be fair, if it cannot meet both your housing needs by doing so.
Factors that are less likely to be taken into account when deciding who gets the house on divorce:
1. Who bought the house/paid the deposit
In a long marriage, who bought the house is not likely to be a consideration. It would most likely be considered an asset of the marriage. Also, if one of you put in a higher deposit when you purchased the property 15+ years ago, this would be unlikely to have a bearing unless this was covered in a Legal Deed or if the ownership is Tenants in Common with an unequal split. In a short marriage, you would have a much stronger case if you put in more of the deposit or the house was already yours. Ultimately though, everything is governed by this central factor of ‘needs’.
2. Who made the mortgage payments
Roles in a marriage are given equal weight in family law. If one party was the breadwinner and paid the mortgage each month, whilst the other was the homemaker, primarily looking after the children, then the two roles are given equal merit. Paying the mortgage in such a situation does not give you more rights to the property.
3. The house has sentimental value
It may be a property that you inherited from your parents, but a court would be unlikely to take this into account. Instead the needs of both parties would be considered more important. And if that means the house needs to be sold to meet those needs, a court is likely to order that.
4. You don’t want to sell the house
It may be that the thought of moving house would make your emotional wellbeing worse and that there are advantages to not having to relocate the children. But if you have one child in a 5-bedroom property and there are no other assets, it is likely a court would insist on a sale of the property, to meet both parties’ needs – even if that is against your wishes or the wishes of your children.
5. You don’t want to rent somewhere as it is a waste of money
If selling the former marital home would not allow both parties to be housed, then it may be the only option for one party to rent. A court will try to divide up the assets fairly to house you both, depending on your needs. But if selling the former marital home means that the other party could not be housed, then it is likely they will maintain that, especially if that is where the children are spending most of their time. It may be a Mesher Order is put in place or agreed to allow release of equity when the children are older.
6. Whose name the house is in
If you are married it matters less whose name an asset is in, especially on a property where you both lived. It is highly likely to be considered an asset of the marriage. In such a scenario, it is likely you would be advised by a solicitor to register your rights to the property with the Land Registry. This means the property could not be sold, transferred or re-mortgaged without your knowledge.
It can all be very confusing and there are few set rules. Family law is deliberately flexible because each family and their situation is different.
Ten steps to help you reach an agreement quicker and for less money than going to court
Get 3 x estate agent valuations for your property. Ask them for a realistic selling value
Find out the amount of any mortgage; any penalties to repay it and any other loans held on the property – your lender can provide you with a mortgage redemption statement, which will give you the total sum owing including penalties and fees. This will allow you to get an estimate of the current equity in the property
Speak to a whole of market mortgage advisor. Ask them to provide you, in writing, what the maximum amount you could expect to borrow is and what the monthly repayments would be for that mortgage borrowing
Print off or save realistic properties on Rightmove or Zoopla that would meet your needs, based on the number of bedrooms you require and the area you wish to live in
Work out a great parenting plan that meets the needs and wishes of your children. Use family mediation if you are struggling to agree this between you
Be realistic – a court accepts that both parties may have to have a reduction in the standard of living that you had when you were married
Focus on need. You can waste thousands of pounds, arguing points that you feel are morally correct. But family law is all about future needs and is the first priority of the court when dividing assets up
Be fair. You both need to be housed. Those housing needs may be different and may result in an unequal division of assets, or possibly a deferred sale known as a Mesher Order. But a court would be unlikely to accept an agreement that would make one of you homeless now or in the near future
Remove the reasons behind the divorce or who you feel is to blame and your emotions from the discussions about who gets the house on divorce.
Commonly asked Questions:
Do I have a right to stay in my home during divorce proceedings?
Yes, you have what are called home rights. And if the house is not in your name, you should strongly consider registering these rights with the Land Registry. You have the right to stay there until the divorce and the financial settlement are finalised. You could even move out temporarily and then move back in. Your ex would have to get a court order or injunction to remove you from the property without your consent. This would usually be where you or the children have been a victim of domestic abuse.
When should we sell the house?
Many people do not want to wait until their divorce is finished before moving on with their lives. If you both agree to sell the house now, whilst your divorce is going through, you can do so. But remember, until you have a financial consent order, all your assets – even those already divided up – could be considered an asset of the marriage. Many clients wait until they have a draft consent order signed, or at least a memorandum of understating to show their intent before finalising a sale.
Some conveyancers will decline to complete a sale unless they have sight of one of these documents. You should always get good legal advice on this or call us for a free 15-minute consultation to discuss how you can get a draft consent order or memorandum of understanding on your agreement before you exchange contracts on any property sale.
If I move out, does it impact my rights to the property?
We have heard from so many people who have been told this. It is highly unlikely a court would factor this in. Most people move out because it will help them; help the other party and, most of all, help the children, to avoid ongoing conflict and arguments. Having agreed child arrangements and made a good parenting plan can give you confidence to move out and make sure the children are prioritised when you do so.
A court looks at the Section 25 factors when considering who gets the house on divorce, it does not consider who moved out of the property.
Who pays the bills or the mortgage if I move out?
If the mortgage is in joint names, you are both jointly and severely liable for the payments. That means you are responsible to pay the full mortgage even if you move out and your ex is still living at the property. With regards to paying the bills, this is something you should discuss and agree between you, based on your budgets.
If you are struggling to reach an agreement, then these can be discussed in family mediation. You can also discuss just the short-term issues, such as paying the mortgage and the bills, until the whole financial settlement is agreed. At this stage you will usually have done a sense check of your agreement to make sure any bills or debts, including a mortgage can be paid.
Can I buy a new property now before we are divorced?
Yes, you can buy a new property and many people do as it is an important part of moving on and feeling better emotionally about this stage in your life. However, until your finances are agreed and made legally binding with a financial consent order, all assets are included in any financial disclosure and discussions. And your new property would need to be disclosed as a financial asset. Many solicitors would therefore advise not to purchase a new property until everything is agreed. But you should take your own legal advice and then make an informed decision based on your individual situation.
Can my ex claim my house even after we are divorced?
Yes, they can make a claim on any financial asset, even after you are divorced. This is unless you have a clean break consent order. Without this, either party could make a claim against the other, even many years after your divorce has finalised. The principle of need would still apply in such cases.
How can I work out what my needs are?
We recommend taking good legal advice from an experienced family law solicitor. The number of children you have and their ages and genders will determine how many bedrooms you would need. What work could you reasonably expect to get now will help as well. As is getting a quote on your mortgage capacity.
What can we do if there is not enough money to fund two properties?
Unfortunately, no one can add money into the family pot at this time (unless you have a relation willing to lend or gift you money). You should look at this site to see what additional benefits you may be entitled to once you are separated.
Can I force the sale of a house during my divorce?
In theory yes. The court have the power to force a sale of a property if they feel it is required to meet your reasonable needs. They can also order a transfer of a property from one name into another.
Can my ex-partner take my house in a divorce?
If the court believes it is needed to meet their reasonable needs, then yes they could be awarded the house. Bear in mind, that to get to this stage you would have usually needed to go to a final hearing and shown the court that you have at least considered mediation. It is not a quick or straightforward process.
Anything else I need to consider?
Transferring a property or moving assets between parties as part of a divorce can result in capital gains tax, depending on when the transfer is made during the divorce process. You should take tax advice from an expert to see if you would be affected by this.
Summary – Who does get the house on divorce UK?
Family law is all about need. This should therefore be your main focus when deciding how to divide up assets, including deciding who gets the house on divorce. And remember – need is very different to wants.
In a long marriage, the starting point is a 50/50 split. But this may change depending on the above needs.
Mortgage capacity can be key, and this is affected by age, income and credit score.
Children are prioritised by the court. They need to be housed, although sometimes the court will consider them sharing a bedroom if a certain age and/or gender.
Getting a decision from the court is costly – in excess of £20,000 each if represented over the three hearings required to be given a final order – so consider one of the 11 options to reach an agreement between you. It could save you a lot of time and money.
Family mediation can help you agree who gets the house on divorce; where you will both live; timescales for any sale; who will cover the mortgage payment and bills whilst you resolve everything; division of all financial assets and help you reach a good parenting plan by taking you through a mediation process that works in just over 90% of cases.
You should strongly consider having any financial agreement reached made into a legally binding financial consent order. This is the only way to protect your agreement moving forwards and can enable a clean break financially between you.
Consider the timing of selling any property – especially if you are buying a new property. If you are close to having a draft consent order signed, it may be worth holding off until this is received to cover you both.
Good legal advice can avoid a lot of wasted money, time and stress. This blog is not intended to replace independent legal advice from a solicitor.
Mediate UK offer fixed-fee family mediation and facilitation packages. You can not only reach an agreement with us, you can also have a specialised family law solicitor draft your agreement into a legally binding one.
We offer a FREE 15-minute consultation where you can ask further questions about our fixed-fee legal packages. Or call us on 0330 999 0959 for more information.
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