Selling a House During a Divorce

San Diego, CA – Determining what to do with the family home during a divorce can make a difficult situation even more stressful. Family homes are often wrapped up in emotion, and making the decision to buy out your former spouse or sell the home can make even a previously amicable divorce become contentious.

house with sale tag

It’s important that no matter what side of the issue you are on, that you understand all of the issues involved.

When determining who will keep the house or if it will be sold, there are several things spouses and their family law attorneys need to consider.

If one spouse wants to maintain the home, does he or she have the ability to maintain it? What are the tax implications for the purchasing spouse? If making the decision to sell the home and divide the profits, who will pay the mortgage while waiting for the home to sell? What effect will that have on the division of the profit?

But the first thing that will need to be answered is who owns the home?

“The idea of ownership seems like it should be a straightforward one to answer,” says John Griffith. “However, it can be more complicated than one may think.”

In California, there is a presumption that any property acquired during the marriage is community property. That means it belongs to both spouses in some proportion—usually equally. The proportion of ownership in a residence purchased during the marriage is dependent on many factors including whether or not separate property funds were used for the down payment.

In a straightforward case, the home was purchased jointly during the marriage, using community funds, and each spouse is listed on the home’s title. In this case, the home is 100% community property and the spouses share an equal interest in the home.

Title does not necessarily dictate ownership in California divorce cases. In fact, the title means nothing if in fact community funds were used to purchase the property—the house is still community property even if titled in one spouse’s name alone.

However, if there is a written agreement effectively changing the home from community to separate property, and the agreement is legally valid, then even a home purchased with community funds could be considered separate.

If a spouse owned a home prior to marriage, one may assume this property is his or her separate property. However, if the other spouse contributed funds towards the maintenance or mortgage payments for the home, he or she will have a vested interest in the property. This is often true for long marriages.

So, who gets the house?

If the house is determined to be separate property, then the spouse who purchased the home will retain ownership. However, if the house is determined to be community property, there are several ways it can be divided.

The spouses can agree to sell the home and split the profits. This is typically the case when neither spouse has the ability to maintain the home on his or her own.

If selling the home, the spouses must agree on a selling price, and choose an agent to sell the home. Once they have an offer that they agree upon and accept, the remainder of the mortgage will be paid, along with any agent fees. The remaining money will be divided between the spouses.

While the proceeds can be divided equally, if one spouse carried the burden of paying the mortgage while the home was on the market, he or she could argue that the money spent should be recouped from the proceeds. Therefore, the distribution of proceeds may be adjusted to account for that.

In other instances, one spouse may opt to take full ownership of the home. This can be done by mutual agreement, for instance in some cases, spouses may agree that the primary custodian of the children should remain in the home. In this instance, a supporting spouse may also continue to pay the mortgage as part of spousal support.

One spouse may opt to buy the other out of their half of the home and retain full ownership. The buyer spouse must come up with 50% of the equity of the home in order to buy out the other spouse’s interest in the home. If the names of both spouses are on the title, the purchasing spouse will need to refinance the home to have the former spouse’s name removed.

A divorce brings many issues with it, and determining the division of assets can be complicated, emotional and contentious. You need to ensure your interests are being represented by experienced and knowledgeable attorneys. The attorneys at Griffith, Young and Lass are here to help, and can help you reach the settlement that is best for you. Call now for a free consultation. 858-345-1720

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