When a married couple divorces, as you may imagine, their marital home becomes a key element of contention. Then, who obtains the home after a California couple's divorce? For instance, when you seek to divorce, will you keep the home or sell it and leave? When you seek to divorce, you must learn your options and rights. Under California laws, when a couple purchases a home together, the home becomes a “marital” or “community” property. Then when the two agree to divorce, the home will be divided unless they come into a different agreement.
However, determining the spouse to remain with the home might be challenging, especially when the spouse purchased the home during the marriage, but the other spouse used community funds to improve it. That’s why it’s recommended you work closely with your divorce attorney and your real estate agents. They will help you learn more about divorce, how the home is settled, and how the spouse obtains the home after divorce.
Which Spouse Receives the House in Divorce?
Determining the spouse to remain with the house or whether it will be sold to a third party might be challenging. House is among the most valuable property owned by a couple. Also, many people have emotional attachments to their house. And if you have children, additional emotional and practical considerations come in.
You should consider several things, including who will remain with the house or whether you should sell it, where your children will stay, whether the involved spouses will keep the house after the divorce, reimbursement, and tax implications. Below is an overview of the critical factors to consider when dividing a house. Since complex issues may arise while dividing a house during a divorce, it's recommended you seek legal help from a lawyer to guide you on the best action you should take. You must understand the common types of homes owned by couples in California since it lays the foundation for dividing the home.
-
Community Property Presumption
Under California laws, the law assumes the property acquired during the marriage is considered community property. Thus, the property is owned by the two spouses equally unless one of the spouses acquired the property as a gift or through inheritance.
Many straightforward cases involve the spouses purchasing the house together during their marriage using community property funds, and they’re both on the title of the property. Under this situation, the house is considered community property, with the two spouses having equal interests.
However, the facts about the ownership of the property are not simple. For instance, the title of the house bought during the marriage is under one spouse. Under this circumstance, the title may create a presumption the spouse separately owns the home with their name on the title. However, the other spouse may overcome the presumption by proving they had an understanding or agreement when purchasing the home and thus the house is theirs. But, proving you had an agreement about the property may be challenging, and you require strong evidence to show the home belonged to two spouses.
-
A Separate Owned Property (Home)
When one spouse purchases a house before marriage, it becomes a separately owned property. But the situation may be challenging when the other spouse not in the title contributes money during the marriage to improve the house. In this case, the spouse will be interested in the house, which might be significant, especially for a long marriage. But a skilled divorce attorney will help the spouse divide the home. Thus one spouse will remain with the property, or both will lose the home through selling it. The following elements will help us know the spouse to remain with the home during divorce:
-
Selling the Home and Dividing the Profits
Both spouses may agree to sell the house and share the profits. The option is usually preferable when neither of the spouses is in a good financial state to maintain the house alone. The benefits of selling a house during divorce are personally and financially. The profit derived from the house may provide the spouse with a new beginning. Selling the home before divorce may also provide each spouse with an opportunity to deal with their financial duties and debts. The couple may also agree to sell the home since it will not be affordable after separation. Remember, by selling the house; no spouse will remain in the home; thus, they will lose it by selling to other buyers.
-
Preparing to Sell the House
Before you sell the house, you should consider the numerous options you have on your way. Remember your house may require repair before it becomes ready for sale. The repair and maintenance will also take much time and money. That’s why you want to discuss this matter with your divorce attorney before concluding. When you decide to work closely with your estate agent, both you and the other spouse may share the same agent because you’re working towards the same goal, and with someone working on your behalf will make the legal process easy. Don’t just decide to sell the house without carefully analyzing the potential impacts. You want to ask yourself the following questions:
- Does the home require work before it becomes ready for sale?
- Will the other spouse continue living in the home?
- Who is responsible for preparing the house for sale?
-
Accepting an Offer for the House
One of the critical decisions on the house sale is the amount of money you ask for the house. Ensure you discuss your house price with your real estate agent and the other spouse. Settle on a price where both you and your spouse comfortably agree. If you cannot agree, it's wise to accept the opinion of your real estate agent. Also, involve your divorce attorney in the discussion about the sale of the home.
When the offer comes in, be ready to discuss it with your spouse, divorce attorney, and real estate agent. When disagreements arise about whether to decline or accept a specific offer, ensure to seek advice from your attorney or your real estate agent. Don’t fear seeking advice since this is the work of your attorney and real estate agents.
-
How to Divide the Profit Derived from the Sale of the House
Follow the California laws on how to handle the property. California is a community property state, which means the divorce court will consider any property acquired during your marriage as equally owned by the spouses. So, the home you lived with your spouse belonged to both of you regardless of the name appearing on your title deeds. But there are still various exceptions, like when the home was issued to one spouse in an agreement. However, in several situations, the house is a shared property. Since it's a shared property, the duties during the sale, preparation for sale, and the obtained profits must be equally shared by the involved spouses.
How the profits and expenses associated with the home are shared may vary. For instance, when one spouse contributed more to the financial upkeep or mortgage of the home during your marriage, they may receive a large percentage of the sale. Again, if one spouse has other large properties, the court will award more profit to the other spouse. Under selling and dividing the profit gained after the sale of the house, it’s clear that no one spouse will remain with the property since its sold. Thus if you seek to divorce your spouse and want to sell the house, you should work closely with your divorce attorney to guide you on how to sell the house and share the profit without any issues. Underselling the house, both spouses will not remain with the house during or after divorce.
-
When One Spouse Buys the House Out
A buyout might be an excellent idea to determine who obtains the house after a divorce without having to go to court. A house buyout involves one spouse buying the other spouse out of their own house during the marriage. The buying spouse pays the partner as per the house's current value or by taking over the partner's share of the mortgage. If the other spouse accepts, they receive the money and cease their ownership rights of the home. Most times, the house is bought by the spouse living with children. This will endure the children living there when undergoing difficult times after their parent's divorce.
-
How Buyout Works
Calculating and negotiating a home buyout may not be an easy task. You will need to give an offer for a buyout of work, and someone else accepts it. There are varied ways to have a buyout happen, including, One divorcing spouse buying the house from the selling spouse using refinanced loans. This includes paying off the selling spouse when you have enough credit cards and want to retain more of the stuff in the house.
One divorcing spouse trades in an equal amount of valuables for the other spouse's share of the house's value. This involves figuring out a fair value of the house since it has changed since you bought it.
-
How to Determine the Value of Your House
Many times people go through a real estate appraiser to receive an accurate house valuation. The payment of the service costs $350 to $500 That the buyer will cover. Both partners will have to agree on the appraiser to proceed with the buyout.
-
Here is a Calculation of a Home Buyout
For instance, you and your partner own a house appraising $ 500,000, and you have a mortgage for $200,000 on the property. It means you have $300,000 in shared equity. When you divide $300,000 by two, it means both you and your partner will have $150,000 each. To calculate the buyout, you divide equity by two, then add any debt. In the example, you will pay your spouse $150,000, then assume your $200,000 mortgage. When refinancing, you will require a new loan of $350,000.
-
Fees You Need to Know About
The fees depend on your current living status and the agreement you and your ex-spouse decide to work with. In California, when buying the house, you will have to cover all the costs, including the broker's cost.
You have to note that you cannot force layout to happen. There must be a mutual agreement between you and your spouse. When your spouse is not willing to leave the house, you can't force them to accept the buyout offer. Suppose you want to retain your house after a divorce. In that case, it is important to keep in touch with an attorney to assist you in evaluating options, obtain a fair share of the property and negotiate a buyout.
However, a buyout may fail to work. When you and your ex-spouse cannot find the cash to buy your shared house, you will not be able to make a buyout. Again, when you cannot agree on the buyout terms, the plan will not be possible.
-
When the Court Issues Deferred Sale Order to the Involved Spouses
When the involved spouses have children in common, the divorce court may temporarily order them to delay the home sale. It’s known as “deferred sale of houses' ' order. Thus the involved spouses will continue to own the house jointly for the ordered period. The deferred sale or targets are minimizing the effects of divorce on the children.
When considering the deferred sale order, the court will consider whether the parents will afford to pay for the home after the divorce. So, the court will carry investigations on the spouse's incomes, support, and earnings available to make payments for the home. To grant the deferred sale, the court will consider the following;
- The period the children have stayed with their parents
- The grades and ages of the children
- The closeness of the children home with their child care, school, on any other institution they use
- The ability of the spouses to obtain a housing
- The emotional effects of selling the house would have on the children
- Whether the house is designed to accommodate disabled children
- How does the location of the house allows the spouse to keep their employment
- The financial impacts would arise from the delayed sale of the home on the spouse not living in the home.
- The tax impacts a delayed house sale would have on each spouse
Reimbursement Issues
Whatever the judgment of the house will be, while the court determines the interests of each spouse on the home, it must also consider whether one of the spouses is entitled to reimbursement from the other party. One spouse might be entitled to reimbursement due to the following situations:
-
Mortgage Payments After Separation
As per the state's laws, the divorce court may order a spouse to be reimbursed when they use different property money to make payments for the mortgage on the home owned by both spouses after their divorce or before divorce unless it might be unreasonable or unfair for the spouse to expect the reimbursement.
For instance, the divorce court may not order reimbursement when both spouses agree that there will not be reimbursement. You may agree the payments were supposed to be a gift, the spouse who made the payments continued to live at the house, and the payments they made were less than the rental of the house, or they made the payments for spousal support.
-
Community Funds Were Used to Make Payments for a Separate Property
As mentioned above, when one spouse purchases a house before they marry, the property becomes a separate property. However, when both spouses use community funds to improve or make mortgage payments, the other spouse will acquire an interest in the house. During your divorce, the divorce court will follow a formula when calculating the other spouse's interest in the house and allow them to be reimbursed for their contributions. Your divorce attorney will also assist you in calculating the amount of money the other spouse should be reimbursed. Thus work closely with the attorney until the end of the legal process.
-
Charges for Exclusive Possession and Use of a Family House After Divorce
A partner with exclusive possession or use of the family house between their separation and divorce will face charges for the fair rental value of the house for the period and owe half of the value to their spouse if the home is divided. Remember to often work with your divorce attorney to provide legal advice when necessary.
Contact a San Diego Divorce Lawyer
Are you confused yet? You’re not alone. Determining which spouse receives the home in a divorce is one of the most complicated issues in a California divorce. Issues with the house title and mortgage reimbursement complicate the issue further. Thus you should seek legal help from a divorce attorney.
At San Diego Family Law Attorneys, we handle all matters involving divorce, like dividing a house. We are determined to help our clients achieve the best outcomes for their divorce cases. Then if you seek to go through a divorce in San Diego, CA, call us at 619-610-7425, and we will schedule an appointment and start working on your case as soon as possible.
