You should be wary about buying new property before your divorce is complete as you may find yourself with unexpected financial burdens. Depending on how smoothly the process goes, divorce proceedings can last any amount of time from a few months to years. During this time, any property that you own individually and as a couple will be included in a divorce settlement.
Depending on your negotiations with your spouse, you may find that you are able to keep hold of certain assets. A house is a significant part of any divorce settlement due to its importance as the home, and its financial value. There is a risk that, if you purchase a property before your divorce settlement is finalised, the equity in that property can be taken into account when calculating how the marital assets are divided.
In the following guide, Ramsdens Solicitors explain the considerations you should make when looking for a new house before a divorce and, if you need to find a new home, how best to go about it.
Why should I be wary about buying a new property before a divorce?
When a divorce settlement is being agreed, both parties will expect to receive a fair share of the assets involved. If the parties cannot agree on the arrangements, they can ask the family court to decide which assets should go to which spouse, depending on factors such as needs, income, contribution to the family home and whether there are any dependents involved, such as children.
There are typically three ways that ownership of a house is arranged in a divorce settlement:
1. The property is sold and the proceeds are split between the parties
2. One party may purchase the property from the other
3. Both parties will continue to live in the house to pay off any loans owed
Each method involves a difficult process as you must either sell, buy or live with your spouse, and the process can have a significant impact on the finances of the involved parties. For example, the house you share with your spouse may have become less valuable since you bought it, or you may not be able to find the funds to purchase the other’s share.
Ultimately, all these issues must be considered before you attempt to make any further financial commitments that may put you in a difficult position.
You can read more about how a house is divided in a divorce by reading our guide here.
I need to find somewhere to live because my relationship has broken down - how should I go about doing this?
In many cases, those in deteriorating marriages need to escape their living situation in order to carry on their lives. Your financial circumstances will determine how you should go about finding a new home. Buying a new property during a divorce is not often affordable, so you should consider the following options instead.
Renting
One solution is to temporarily rent a property. When renting, you should take caution not to commit to a long-term contract in case your divorce resolves more quickly and your end goal is to buy a property. However, you should make sure your contract is secure so you do not find yourself evicted on short notice. You should aim to find a tenancy agreement that is flexible and suits your needs.
When looking for a property, you should try to find one that fits within your budget, as your financial liabilities and responsibilities may be uncertain until your divorce settlement is agreed upon, and you will want to avoid paying expensive rent, especially if you have to continue making mortgage contributions.
Staying with friends or family
Living with people you trust can help you to save money and be around people who may be able to support you during this difficult time. However, this option may not be ideal or available for everyone, especially in cases where the divorce process lasts a long time. Staying with family or friends can be helpful if you need to leave your current living situation quickly and will provide you with, at least, somewhere to sleep while you search for another solution.
However, whilst there may be room for you to stay, there may be difficulties in accommodating your children making it difficult for them to spend time with you overnight.
Hotel stays
Hotel stays are similar to renting but can be more expensive, so you should only consider doing so temporarily, while you are looking for a better solution. However, one benefit of staying in a hotel instead of with friends or family is that you will not have to worry about taking up the space and time of people you care about.
Remaining in your current living situation
While not ideal for many reasons, it may simply be easier to remain living in the house with your partner while the divorce settlement is agreed. This will allow you to keep your belongings in a place where you know there will be space and security. This will also help you to avoid any further expenses from trying to find somewhere else to live.
When will I be safe to purchase a new property?
Buying a house can be a long and complicated process and you should only buy your house before your divorce settlement is agreed after taking advice from a specialist family solicitor.
The financial settlement must be agreed upon and is one of the final aspects of the divorce process. It is also the part that can take the longest to resolve, especially if disputes arise. To ensure the best chances of resolving the financial settlement quickly so you can find a new home, try to keep your demands fair by considering what your partner will want and need.
The quickest and simplest solutions are not always the best, especially when deciding how to split the family house; avoid cutting corners and carefully consider all of your options with the help of a professional solicitor. The team at Ramsdens Solicitors will be able to help you through the entire divorce settlement process by advising you on what demands you should and should not make and how to best manage your living situation.
For expert legal advice to help you through your difficult time and to secure what you’re entitled to following a divorce, call Ramsdens today on 08000 147720, or fill out an online enquiry form and we will return your contact and a time suitable for you.