Often times, when two people are going through a divorce, their house is the most valuable asset that needs to be addressed. The question regularly becomes what happens to the home where the parties lived, many times with their children, prior to their separation and eventual divorce.
To answer that question, it must first be determined whether the home is marital property and subject to division under the applicable equitable distribution (property division) laws and statutes. In any divorce case, the court will need to decide how to divide any marital property. Dividing does not necessarily mean equal or 50/50.
Various jurisdictions define marital property differently. In Maryland, marital property is anything that was acquired by either party or both parties, regardless of title, during their marriage from the date of marriage to the date of divorce. In Virginia, marital property is anything that was acquired by either party or both parties, regardless of title, during their marriage from the date of marriage to the date of separation. The exception is anything acquired by inheritance or gift from a third party. Marital property can also include property that was acquired before or after the marriage if that property was wholly or partially commingled or converted to marital property.
In dividing marital property, a judge will consider the following factors:
1) the contributions, monetary and non-monetary, of each party to the well-being of the family;
(2) the value of all property interests of each party;
(3) the economic circumstances of each party at the time the award is to be made;
(4) the circumstances that contributed to the estrangement of the parties;
(5) the duration of the marriage;
(6) the age of each party;
(7) the physical and mental condition of each party;
(8) how and when specific marital property or interest in the pension, retirement, profit sharing, or deferred compensation plan, was acquired;
(9) the contribution by either party of property to the acquisition of real property held by the parties as tenants by the entirety;
(10) any award of alimony and any award or other provision that the court has made with respect to family use personal property or the family home; and
11) any other factor the court considers necessary or appropriate to consider in order to arrive at a fair and equitable monetary award.
The Court has options when deciding what to do with the house in a divorce case.
Sale
The most common decision made by the court in dividing a house is to order that it be sold, and the proceeds of the sale divided equitably (again, not necessarily equally or 50/50). Sometimes the court will also appoint a trustee to help facilitate the sale so that the parties don’t fight over the realtor, listing agreement, sales price, etc. The trustee will be fairly compensated in addition to any closing costs and other costs of sale.
Transfer
A less common, although not infrequent, a decision made by the court is to transfer jointly owned real estate to one spouse (please note that the court doesn’t have the authority to transfer solely held property to the other). The court will effectuate a transfer of property by ordering one party to sign a deed giving the joint interest to the other party upon the release of any lien against the property (usually by refinance), ordering that one party purchase the interest of the other, or a combination of both.
Use and Possession (Maryland)
In Maryland, the court has the additional authority to award a custodial parent use and possession of a “family home” for up to three years after the divorce. The purpose of this option is to maintain stability for the minor child(ren) and allow them to continue living in a familiar community and environment. This remedy is available when the parties have a minor child (either a child under the age of eighteen years or over the age of eighteen years if the child is still a high school student.
A “family home” is defined as: property that (i) was used as the principal residence of the parties when they lived together; (ii) is owned or leased by one or both of the parties at the time of the divorce proceeding; and (iii) is being used or will be used as a principal residence by one or both of the parties and a child. Again, there is an exception for property owned before the marriage or acquired through an inheritance or a gift. That being said, there are some cases where judges have determined that homes owned prior to marriage or when the parties did not even live together, were family homes under the statute.
During the use and possession period (up to three years after the divorce), the court may order either or both parties to pay the rent/mortgage payments, including other debts associated with the home, maintenance, property taxes, and insurance. After the use and possession period, the court will order one of the other two options (that the property be transferred or sold)
These are just the basics on who gets the house in a divorce. If you are going through a divorce, there are many complexities and other variables that must be considered. Consequently, it is imperative that you contact an experienced attorney right away so that your rights can be protected.