Buying and selling property can be both an incredibly exciting and overwhelmingly stressful experience. To help you through what can appear a truly daunting process, we’ve pulled together a series of articles that will guide you through the key areas of buying and selling property, and help you to make the right decisions.
In the previous article, we looked at securing the right mortgage deal
This article tackles the issue of selling the family home as a result of a relationship split.
When a relationship ends, emotions can be running extremely high, often making the situation appear far worse than it needs to be. But when the dust starts to settle, there are a number of practicalities that need to be taken care of. One of the biggest issues to be resolved is agreeing how the family home will be sold, and what happens to the proceeds from the sale.
There are a number of considerations that must be taken into account dependent upon the nature of the partnership, so let’s look at the various scenarios:
Married or Civil Partnerships
Sole ownership of property
If one party is the sole owner of the property, they have the right to stay. However, so does the other party, even though their name is not on the property title. If the property owner wishes to sell the property, they must obtain the consent of the other party. But if consent is not given, an application for sale must be made to Court. This is usually done as part of the process of separating the family finances on divorce/dissolution of a civil partnership (culminating in a financial remedy order).
The only way a property owner can remove a former husband/ wife/ civil partner from the family home, without agreement or a financial remedy order, is by means of a Court order known as an Occupation Order, though this may only be forthcoming where there have been instances of domestic abuse.
Joint owners
If the property is in joint ownership, both parties have the right to occupy the family home. If one party wishes to sell the property and the other doesn’t, an application for sale must be made to the Court. Again, this will usually be done as part of the process of dividing the family finances during the divorce/dissolution of a civil partnership.
The party who has not consented to the sale can ask the Court to postpone or refuse the sale if, for instance, the property is needed to house the children of the relationship and there is no other alternative accommodation available.
Cohabiting Partners
If you are cohabiting, and only one party owns the property, the other party may still have established an interest in the property. If so, they cannot be forced to leave, however, they will need a Court order to be able to remain living there.
Where both parties are owners of the property, neither can insist that the other party moves out. In this scenario, if one party wishes to sell and the other doesn’t consent to the sale, then an application for sale must be made to the Court. It may be necessary to ask the Court to determine a non-owning party’s share in the property if they believe they have built up an interest (for instance, by making financial contributions) or if there are minor children involved.
How will the sale proceeds be distributed?
All of the costs of sale, including estate agent’s commission and conveyancing fees, together with repayment of outstanding loans secured on the property will be repaid in full. The remaining balance is known as the ‘net sale proceeds’, the division of which will depend on a number of factors:
- an order of the Court (if any)
- mutual agreement of the parties; and
- whether the parties entered into a pre-nuptial agreement (if they are married), a cohabitation agreement or a Declaration of Trust at the time the property was purchased, which dealt with division of ‘net sale proceeds’ on the sale.
Any breakup is one of life’s more stressful events, and from a legal perspective this whole area is clearly quite complex. This article has set out to provide guidance on some of the key areas for consideration, but seeking legal advice to guide you through the event is highly recommended.
Selecting the right solicitor to act on your behalf is a crucial decision. If you require assistance following the breakdown of a relationship and the sale of the family home please contact Jane Witek at Hughes Paddison solicitors.