At AFG LAW our experienced divorce solicitors understand that one of the biggest worries on divorce is what happens to the family home when your marriage breaks down. For most divorcing couples the biggest asset is the family home and usually the most significant ‘need’ for each spouse on separation is a need to be housed.

This usually means that housing needs are the starting point for dividing the assets of the marriage, this is especially the case if there are children of the marriage. It helps to understand this prior to starting negotiations or mediation so you can ensure this is the focus to begin with before considering other needs.

There are lots of different options depending on the circumstances of the divorcing couple; we have tried to set out the most common scenarios to explain what can happen as part of a financial settlement and how our divorce solicitors can help.

• The assets of the divorcing couple are enough to allow one spouse to stay in the family home and the other spouse can rent or live with family or friends
• The assets of the divorcing couple are not enough to allow either spouse to stay in the family home
• The assets of the divorcing couple are enough to allow both the spouses to buy a smaller home
• The assets of the divorcing couple are enough to allow both the spouses to buy similar properties to the original family home.
• The parent who cares for the children day to day remains in the house with the children until a “triggering event” when the property is then sold.

One spouse can stay in the house and the other spouse can rent or live with family or friends

The family home is normally the biggest expense for a family both in terms of being the most valuable asset but also in terms of mortgage and running costs. When a marriage breaks down there are often not enough funds to allow a second property to be bought. If there are children of the family then the parent who will be providing the majority of their care will have their need to be housed prioritised as the welfare of the children is the first consideration in financial order proceedings.

If it is financially possible it may mean that the children can stay in the house although sometimes it may be necessary for the parent caring for the children to downsize to a more affordable home. The court’s priority will always be to ensure the children are properly housed; if there are no children it is unlikely that it will be considered a fair outcome for one spouse to keep the house unless the other spouse can be bought out with capital from another source.

Neither spouse can afford to stay in the family home

Sometimes the financial position of the divorcing couple means that the house must be sold and the parties must either return to live with family members or friends or find rented accommodation. This may be because the size of the mortgage, the couples’ debt and the level of their individual incomes mean that neither can afford to keep the house on their own.

Once the property is sold the mortgage and costs of sale must be paid and then any money remaining will be divided between the divorcing couple. If there are children of the family then the parent who is caring for them the majority of the time is likely to get a larger share so they can provide for their needs.

The family home must be sold to allow each spouse to buy a more modest property

If it is not financially possible for one of the spouses to remain in the home and the other spouse to rehouse themselves from the remaining funds then the family home may have to be sold to allow both spouses to each buy a smaller or more modest property. The property required by each of the divorcing couple will depend on whether there are children of the family that need to be housed in a property with sufficient bedrooms.

If there are no children, the divorcing couple have similar income, mortgage capacity etc then an even division and equally sharing the proceeds may be appropriate. If one spouse is caring for the children the majority of the time, does not have the same income level or borrowing capacity because of their parenting responsibilities then division may reflect this and the other spouse may have to have less equity and a larger mortgage.

The family home is sold and both spouses can purchase another property that is similar to the family home

The court will always strive to achieve a fair settlement and if there are sufficient matrimonial assets then the court’s aim is likely to be to leave each of the divorcing couple in a similar position to the one they were in during the marriage. However, the court will also look to needs and if one of the couple is in a large property above their housing needs, and in order to remain in that type of property, maintenance is required the court is likely to say that this is not appropriate.

We have discussed spousal maintenance in depth here but the court’s aim when granting spousal maintenance is for it to allow the other spouse to become financially independent and therefore it is not intended to be a long term support in most cases. If there are no children of the family, it is a short marriage and one of the divorcing couple can show that a large portion of the assets are not matrimonial then it may not be considered fair for the other spouse to maintain a standard of living that they have only experienced for a few years and a more modest level of housing may be considered appropriate.

The parent who cares for the children day to day remains in the house with the children until a “triggering event” when the property is then sold.

The court will always put the children’s needs as the first consideration when considering a financial settlement and the children’s biggest need is likely to be housing. If it is possible to keep the family home and allow the children, and the parent who cares for them the majority of the time to remain in the home, that is often the best outcome for the children.

The house is usually the biggest asset of the marriage, if one spouse is able to stay there with the children the other spouse is likely to be in a situation where there is insufficient money for them to have much capital at the time of separating and starting again. One of the mechanisms the Court has for dealing with this situation is called a Mesher order. This is an order which provides for the spouse who is leaving the home to have a percentage share of the value of the home payable at a certain point or “triggering event”.

There are lots of different “events” used such as when the youngest child finishes education, if the spouse remaining in the property cohabits for a period of time, or remarries. When the triggering event occurs the spouse remaining in the property will have to have sufficient money to “ buy out” their former spouse or the property will have to be sold.

These orders need careful consideration as they can have a big impact on the spouse who is remaining in the property, potentially at a time of life where their borrowing capacity has reduced, when the triggering event occurs. This can cause difficulties in circumstances where children have finished university, haven’t been able to secure their own property due to increasing housing prices, the need for a sizeable deposit, are on lower wages etc and remain living with their parent meaning downsizing can be difficult.

If one of these orders is considered it is important that the spouse staying in the property thinks not just about the immediate future but what will happen when the triggering event happens. Mesher orders are complicated; what percentage should the spouse who is leaving the house receive, what should the triggering events be, will the mortgage company agree for the property to be transferred to one spouse with a charge in place for the other, what will happen to the mortgages, running costs and repairs?

Our divorce lawyers at AFG LAW can help guide you through all of these questions to get the best possible outcome for you.