What Happens to the House in Divorce?

What Happens to the House in Divorce?

By the end of most divorce cases in California, the spouses will no longer own real property together.  This can be accomplished through a buy-out whereby one of the spouses buys out the other’s interest, or it can be accomplished by selling the community home to a third party. In the latter case, the spouses may agree to an immediate sale of their home or a deferred sale might be more appropriate or Ordered by the Court following a trial. Because the co-owners of the property are divorcing and because their property is subject to the jurisdiction of the family law court, neither spouse or co-owner is able to sell the house without the other’s written consent or without a Court Order.  
If a situation arises where one party wants to sell the community house and the other does not, it is not possible to proceed with the sale of the property without a written agreement signed by both parties or without a Court Order for the sale of the property.  However, the Court will not make an Order to sell the house prior to trial unless the party requesting the Order can demonstrate that the Order is necessary prior to trial in order to preserve the community equity.  For example, a pre-trial Order for the sale of the family home might be made by a Court in order to prevent a foreclosure sale and the ensuing loss of community equity.  
By agreement between the spouses, they may agree to an immediate sale of their house. In many situations where there are not sufficient assets to award the house to one spouse, selling to a third party is the only feasible option.  When the parties agree to sell the house to a third party during the pendency of their divorce, they can then use their share of the proceeds as they wish.  If there are outstanding and unresolved financial issues between the spouses, they may agree to hold some of their community equity back in a trust account to resolve those issues in the future, whether by agreement or trial.   Sometimes the parties may agree to defer the sale of the house to accommodate their children or other interests. If the parties do not agree, a Judge may nonetheless make such an Order after considering the impact of the sale on the children and how each party is financially affected.
If one of the spouses, after their date of separation, used their own separate funds for mortgage payments or improvements is entitled to reimbursements. However, a spouse that is exclusively occupying the marital home may also be held financially accountable to the community for the reasonable rental value of the property.  Having a family law experienced realtor and an experienced family law attorney on your side is critical to understanding your rights and making the right decisions for you.
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