Family Home Division in Divorce
Ownership of the family home is one of the most important and contested issues in divorce proceedings. It is not surprising, considering the significant value attached to most homes in Northern California.
Who Owns the House?
The first step in determining whether the house is subject to property division in divorce is classifying the home as community property or separate property.
A. Community Property
There is a legal presumption that a house is community property if it was bought during the marriage while both or at least one of the spouses were domiciled in California. Community property is owned jointly by the spouses, and each spouse has an interest in the property.
However, there may be instances when it is not so easy to determine whether the house is community property, such as when the house is purchased with community funds but is in the name of only one spouse. In such instances, the courts will review evidence showing the intent of the parties during the purchase.
B. Separate Property
There is a presumption that a house is a separate property if it was purchased before marriage. Separate property remains the property of one of the spouses and is usually not subject to division in divorce.
An exception to this rule is when the other spouse contributed to the separate property, such as paying for the house’s mortgage or paying for improvements. In such a case, the other spouse earns an interest in the separate property, and the house may be subject to division.
Real Estate Division in Divorce
Now that we have already discussed the possible ownership status of the house, it is time to tackle the issue of property division.
A. Sale of the House
The most straightforward option for the parties is to sell the house and divide the proceeds.
B. Buy-Out the Share of the Other
If a party has the financial means and wants to retain full ownership of the house, he or she may opt to buy out the share of the other party. This option is more complicated since it involves many ramifications, such as tax and mortgage consequences.
C. Deferred Sale of Home
If a party wants to postpone the sale of the house, he or she may request the court for a deferred sale of home order. If the court grants it, the use and possession of the house will be temporarily awarded to the custodial parent. This option can be resorted to if the parties wish to minimize the adverse effects of divorce on the children.
The court considers the following factors in a deferred sale of home order:
- The length of time the child has resided in the home
- The child’s placement or grade in school
- The accessibility and convenience of the home to the child’s school and other services or facilities used by and available to the child, including child care.
- Whether the home has been adapted or modified to accommodate any physical disabilities of a child or a resident parent in a manner that a change of residence may adversely affect the ability of the resident parent to meet the needs of the child
- The emotional detriment to the child associated with a change in residence
- The extent to which the location of the home permits the resident parent to continue employment.
- The financial ability of each parent to obtain suitable housing.
- The tax consequences to the parents
- The economic detriment to the non-resident parent in the event of a deferred sale of home order.
- Any other factors the court deems just and equitable.