One of the most commonly asked questions we get as Maryland Divorce Attorneys concerns the family home. Who gets the house in a Maryland divorce?
What happens to the equity we have in the home? Do the needs of children impact the use and possession of the home? It’s not surprising since the home is the single largest asset for most families. Of course, strong emotional ties to a house or a community also factor into the personal considerations in a divorce.
Who Gets The House in a Divorce?
This question is at the forefront for most divorce clients. If the couple is able to resolve their disputes out of court, they may be creative in how they ultimately address the home. When settled in litigation, however, the Court is limited in how it may resolve the matter.
The Court has three options:
- Award one party use and possession of the family home for up to 3 years from the date of the divorce. The “family home” is defined as that which 1) was used as the principal residence of the couple when they lived together; 2) is owned or leased by 1 or both of the parties; and 3) is being used or will be used as a principal residence by 1 of the parties and a child. Before the Court will award use and possession of the family home, it must consider the best interests of the child(ren), the interest of the requesting party to continue to use the family home and any resulting hardship imposed on the other party. If a party is awarded use and possession of the family home, that award does not necessarily mean that he/she will also be responsible for the carrying costs of the home. The Court may order that either party pay the mortgage or rent and the cost of maintenance, insurance, assessments and taxes.
- Transfer ownership of the home to 1 party. Transfer of the home is subject to the terms of any lien against the property. So, the party requesting the transfer will have to present evidence to the Court that the lien holder will approve the release of the other party from the lien. The Court may also authorize 1 party to purchase the other’s interest in the home. Practically, the party requesting the transfer may want to present evidence that he/she will qualify for a refinance of the debt so as to remove the other party from the lien. If a home is transferred to 1 party, the Court will consider that transfer (and the value of the equity, if any, in the home) when determining whether to award either party a monetary award.
- Order the home sold and the proceeds divided equally. It is much more likely that the Court will order a home sold rather than transferring the home to 1 party.
But, what happens if the Court orders the home sold, but the party living in the home refuses to cooperate with the sale and/or refuses to leave? This is a fairly common problem. Many times the party remaining in the home wanted the Court to grant him/her transfer or use and possession of the home, so he/she may be angry or upset by the Court’s ruling.
In this circumstance, the other party may request that the Court appoint a trustee to sell the home and take all steps necessary to effectuate the sale. A trustee is an attorney who is typically compensated at the time of closing at a rate of 4% of the sales price and is reimbursed for all costs associated with the sale (e.g., appraisal fee). The 4% trustee fee is in addition to all other costs of sale, including brokers’ commissions. While that may sound like a hefty price tag, a trustee’s job may be extremely difficult and time consuming. For example, the trustee may have to evict the party living in the home if he/she refuses to leave, which may require involvement of the sheriff’s department. In the end, the party interested in moving forward with the sale, in accordance with the Court’s Judgment of Absolute Divorce, may have no choice but to involve a trustee and incur the additional expense.
Divorce and Selling The Home
It’s important for divorce litigants to understand that, for the Court, the house is nothing more than an asset. While the Court will take into account non-financial considerations when there are children involved, the same considerations do not apply for the husband and wife. The legal process views the home and home equity in a divorce as an exercise in the division of property. If the home is important than it is best dealt with in a settlement rather than in litigation. However, as we often advise our clients, it is best to set aside the emotional considerations with the home and, instead, focus on the best financial outcome.
