The Fight for the Family Home in Divorce

The Fight for the Family Home in Divorce 1
Mar 20, 2020

A major bone of contention among divorcing couples is the division of the family home. This is understandable given that couples invest considerable time, effort and money in creating a dwelling place and for the majority of couples, the family home is a major asset that a couple acquires during the marriage.  Having a roof over your head and over the heads of children is of paramount importance to a court when making decisions related to the matrimonial home.  It is for this reason that individuals must have a realistic view of what can happen to this asset during a divorce.  One potential change may be the loss of the family home.  A party to a divorce may be required to “downgrade” to a smaller place or may even be required to rent instead of own a home, which for some is a difficult change of circumstances.

So, with this in mind, what happens to a family home in a divorce and what options are available?  Here are a few things to consider when discussing the family home in a divorce:

Sell the Family Home:

One option that divorcing couples opt for is to sell the family home. Proceeds from the sale of the home are then split accordingly between you and your ex-spouse, the split percentage being agreed upon by you and your ex-spouse or by court order. Prior to the agreement or order for the sale of the family home, you and your ex-spouse may be required to hire an expert valuer to value the property in question, especially in circumstances where you and your ex-spouse cannot agree to the listing price or the percentage split of the sales proceeds of the home.

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In Hong Kong, the Family Court has the authority to issue what is called a “Mesher order” which basically is an order to sell the family home but at a postponed time until a named event occurs, such as when a minor child graduates from high school or university.  The Family Court will look at the facts surrounding the family before making any such orders but the goal in postponing a sale is to consider the accommodation of one spouse and the children.

Another power of the Family Court is to issue what is called a “Martin order.”  This is similar to a Mesher Order, except that under a Martin Order, one party is given an entitlement to occupy the family home for life or until remarriage.

In certain situations, if a transfer of property results in one party having a larger share of the matrimonial pool, the individual who receives the greater share may be required to compensate the other party a lump sum of the gain or the receiving party can hold a legal charge over the property until such time he/she can be later compensated.

It is important to bear in mind that if a Family Court makes an order for the sale of the family home, it can only be ordered after you are divorced (Decree Absolute).

Transfer of Property:

Although not common, the Family Court in Hong Kong also has the ability to order a transfer of the family home to the other spouse or a child of the family.

The Family Court in Hong Kong acknowledges that it is generally desirable for the primary caring parent to remain in the family home, on the basis that the children remain in a home they are used to and close to their school, and the Family Court will do what they can to maintain that status quo.  This however does not mean the Family Court will not take into account cheaper accommodation if this means capital can be released from the family home and the family can move into similar and satisfactory accommodation.

One thing to keep in mind in a transfer of property situation, is whether there is a mortgage attached to the property as this could affect a transfer of property.  What will become a factor is whether the receiving party can maintain the mortgage from either his/her own resources or from maintenance received by the other party.

Buy-Out:

Another option to consider, if you have the ability and the funds, is to buy-out your ex-spouse’s interest in the family home. If you choose this option, talk to your solicitor and discuss what provisions are necessary in an agreement/order to secure your interest in this property.

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Stay in the Home Pending Sale/Transfer:

Some divorcing couples may consider staying in the family home and live together pending the finalization of the divorce.  While this might make sense for some families, it could also create an environment of stress and tension, not only for the divorcing couple, but also for the children. Before choosing this option, it is important to have a plan and discuss this with your ex-spouse so boundaries are established and communication tools are in place should conflict occur. Having a plan will eliminate any tension that may occur when living in close quarters.

Tenancies:

In a city like Hong Kong, it is not unusual for couples not to own a home, but instead become renters due to the high housing costs. In a divorce, it is not uncommon for one party to remain in the rental unit until such time the lease has expired, subject of course to whether the parties have the ability to pay the rent.

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Adjustments must be made at times and this relates to rental units as well.  In certain cases, there may be insufficient income to pay for two rents each month.  Such adjustments may include a “downgrade” to a smaller, less expensive rental unit or even adjust the standard of living.

Discuss these options with your ex-spouse, along with your solicitor. Your solicitor can provide you with more detail on what options are best suited for you and your unique circumstances. While it may be uncomfortable and upsetting to divide an important asset such as the family home, this may also be an opportunity to start fresh and create a new home for you and your family.

 

 

 

 

 

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