Disclaimer: This article aims to provide educational information on selling your home during a divorce. It is not intended to serve as legal advice. Consult with a lawyer and exercise your discretion before taking action based on the information provided in the blog.
Since your home is typically your largest asset, there can be a fair amount of conflict where it is concerned. Each party may have strong emotional and financial attachments to the home, making it challenging to reach a consensus when it’s time to sell.
In this article, we will talk about selling your matrimonial home. We will discuss what happens if the party cannot agree to the sale (or the terms of the sale) and how it can affect you moving forward.
We encourage our clients to consider mediation to help resolve issues related to the matrimonial home. You can learn more about how mediation works here.
When the parties agree to sell the matrimonial home
When spouses agree about selling their home, they have two options: one spouse can buy out the other’s interest in the property, becoming the sole owner, or the property can be sold to a third party, with the net proceeds divided between the spouses either through mutual agreement or a court order.
This is where mediation can be beneficial. Given the importance of the matrimonial home and its role in the rest of the divorce, agreeing to its sale in mediation can be a practical approach. (Learn more about the benefits of family law mediation here.)
If you have children, you’ll want to consider the timing of when you sell the home and the impact it will have on them. Stability and continuity are crucial for children during the divorce process. Couples may need to consider the timing of the sale, the impact of moving to a new residence (such as a new school), and the potential need to maintain a familiar environment for the children’s well-being.
What if the parties cannot agree?
If the parties cannot agree wherein one spouse buys out the other, then a judge cannot determine the house’s value. However, a judge can intervene and order its sale. This scenario often arises when one spouse is unwilling to buy out the other’s share of the property or when there is a significant disagreement regarding the home’s value.
If one party does not want to sell the house, they may make things difficult. For example, they may need to be more responsive promptly, or they may turn down perfectly acceptable offers on the home. In that instance, you can return to court for a judge to make a further order. That order may allow one spouse to sell the house without the other’s consent or may direct the spouses to follow the reasonable advice of a realtor. The order may also require the spouse living in the home to keep it clean and presentable for any showings.
Separation agreements and financing your next home
Before you can sell, it is recommended that you have a separation agreement negotiated and agreed to. We recommend that our clients have an interim parenting plan before selling their homes. This way, you know your children’s schedule and can ensure a smooth transition during the selling process.
Banks will usually require a separation agreement as part of your mortgage application. They will want to know how much support you owe or owe. Not having a separation agreement can hold up your next home’s purchase.
The proceeds from the sale
If the remainder of your divorce has not been negotiated and there is no separation agreement in place, what happens to the proceeds of the sale of the home?
Again, you’ll want an order to release the funds. However, if there will be an equalization payment owing from one spouse to the other, which spouse receives the funds? While these issues are resolved, the funds will usually remain in the real estate lawyer’s trust account.
This is not ideal – you now have no home, no proceeds from the sale and no separation agreement that will satisfy the bank’s conditions.
Again, this is where we strongly encourage you to attend mediation. Being able to compromise and agree about the sale of your home will help you all move forward.
Moving forward with Plat Simionati LP
In light of the complexities of selling a matrimonial home during a divorce, we highly recommend consulting with a knowledgeable family law lawyer who can provide expert guidance tailored to your situation.
At Plat Simionati, we understand the intricacies of property division and the emotional challenges associated with selling a home in the context of a divorce. We are dedicated to providing comprehensive legal support and helping you navigate the process smoothly. Contact us today to discuss your case!