Every separating couple faces the prospect that at least one of you will ultimately have to move out.

What are my options regarding the family home?

Your options regarding the family home are generally:-

1. One party retains the house and has the property transferred into their name. This requires them to discharge any mortgage on the property and re-finance in their sole name, including borrowing additional funds for any agreed cash payment to ‘buy the other party out’ of the property; or
2. The house is sold and the sale proceeds are divided between the parties as agreed.

Which option best suits me and my ex?

This is usually determined by whether or not one party has the borrowing capacity to retain the house by themselves. To get an idea of whether you will be able to borrow enough to ‘buy out’ your ex, you should speak to a bank or a mortgage broker to ascertain if you can afford to take on the mortgage alone and how much you are able to borrow. Your conversation with the bank should include the possibility of and estimated amount of a cash payment to the other party.

If you have the borrowing capacity to keep the property, to discharge the mortgage and re-finance in your name, and to make a cash payment to your ex., you should make a budget to ensure that you will be able to meet the new mortgage repayments comfortably whilst retaining enough to keep the lifestyle you want.

What do I need to consider if the property is being transferred to me or my ex?

If you and your ex decide that one of you will retain the property as part of the family law property settlement, things to consider include:

• ensuring that your agreement is formalised by Consent Orders or a Financial Agreement. If your property is transferred using one of these, you may be able to claim a stamp duty exemption;
• Giving yourselves a realistic timeframe for the transfer to ensure that the party retaining the property has sufficient time to obtain the necessary finance; and
• including a default clause in your Consent Orders or Financial Agreement providing for the sale of the property in the event that the party retaining the property cannot obtain the necessary finance.

What should I consider if the property is to be sold?

If you and your ex decide to sell the property as part of your family law property settlement, things to consider include:

• Speaking to a few real estate agents to find one both you are both comfortable with. Instruct the agent they must obtain joint instructions from both of you;
• If you and your ex are unable to agree on a listing price, ask the agent to recommend a listing price. If you are still unable to agree, consider obtaining an independent valuation and using the valuation as the listing price;
• If you and your ex are unable to agree on the division of the sale proceeds before settlement, ask the agent or the conveyancer/solicitor if they will keep the sale proceeds in their trust account until you and your ex have agreed on the division.

If you reach any roadblocks when discussing these or other issues, contact your lawyer to assist you.

Here to Help

Contact us now for free no-obligation telephone advice about your family law property settlement.