THE SLUMPING HOUSING MARKET AND 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 mortgage, 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 exist.
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.
If you would like any additional information please call me at 954 385-9160 to schedule an appointment.
