The Housing Market & Divorce
More often than not a couple’s most valuable asset is their home. When they become involved in a divorce, the disposition of their home becomes a central issue in the final resolution. In the majority of cases, the home (if titled in joint name) is considered a marital asset and subject to equitable distribution. This usually means the home is placed on the market for sale and the equity realized after sale is divided equally between them. In years past, this was not ordinarily a problem. In the recent past, when the housing market was flourishing, this often resulted in both parties realizing a substantial profit. Now, with the housing market in a slump, results are a lot different. It is not uncommon for a house to remain on the market for a year, without a sale. In addition, many people are forced to “dump” their home which results in little or no profit margin. How are couples dealing with this problem? What are their options?
Many couples, realizing that they may have to sell their home for either minimal profit or a loss are agreeing not to sell until the market rebounds. This of course results in several other potential problems. Who will remain in the home until it is sold? Who will be responsible for monthly payments such as , taxes and insurance? Who will pay for repairs? What if another hurricane hits and the couple is responsible for a large deductible? These issues should be resolved in a marital settlement agreement so as to avoid future conflicts.
If there are minor children in the marriage, it is not uncommon for the residential parent (parent who has custody) to remain in the home with the children. This of course presumes that he/she can afford the monthly mortgage payments. Florida Statutes does provide for the residential parent at times to have exclusive occupancy and possession of the home. This is not true in all cases. This could be for a set number of years or until such time as the youngest child reaches majority (18). Many couples are entering into an agreement allowing mom/dad to remain in the home for a set number of years, usually coinciding with some significant school event, like advancing from elementary school to middle school. This allows the child(ren) to remain in a familiar environment while the parents wait for the housing market to rebound. Of course such an agreement can take place between the parties even if no minor child exists.
Of course the above scenario presents issues such as costs of repairs, payment of expenses, etc. Will the former spouse who remains in the home be entitled to a credit for the mortgage, taxes and insurance paid during his/her occupancy? Will the parties simply agree to be equally responsible for monthly costs? When the home is ready to be sold, who will determine the selling price?
As you can see, the present housing situation can present some unanticipated problems, both now and in the future. Most people cannot anticipate all issues which might arise. In order to assure that your case will not be one of those which requires additional litigation after the divorce is made final, it a good idea to speak with an experienced family law attorney, so he/she can properly advise you.
Our family law attorneys can help to determine the best possible options for negotiating a fair and equitable home settlement in Weston, Pembroke Pines and all of Broward County. Contact the Law Firm of Evan H. Baron today.