Family Home and Property

The Orders a Court Can Make Over Property

The home raises three questions: who lives there now, who owns it afterwards, and what happens to the mortgage. The court's powers come from section 24 of the Matrimonial Causes Act 1973, with equivalent powers for civil partners in Schedule 5 to the Civil Partnership Act 2004, inside the wider financial settlement on divorce.

Section 24 allows an order transferring the home, or a share in it, to the other of you or to a child of the family, an order settling property one of you owns on terms the court approves, or a variation of a marriage settlement. Alongside one of those orders, or a lump sum or secured maintenance order, section 24A adds the power to order a sale of property in which either of you has a beneficial interest.

Section 24A(4) lets the court direct that a sale order takes effect only once an event or period it specifies has passed, which is one way a deferred sale is built. On divorce or nullity, a property adjustment order or an order for sale does not take effect until the final order is made.

If you rent, Schedule 7 to the Family Law Act 1996 lets the court transfer a relevant tenancy, which includes protected, statutory, secure, assured and introductory tenancies and an occupation contract in Wales, from one spouse or civil partner to the other, where the property is or was your home together. Schedule 7 reaches former cohabitants too, where they have ceased to live together and the home is one in which they cohabited. Where the home is owned rather than rented, couples who were not married claim through TOLATA claims, or under Schedule 1 of the Children Act 1989 for a child.

How the Court Decides Who Keeps the Home

Section 25 sets out no formula: it requires the court to weigh all the circumstances, giving first consideration to the welfare of any child of the family under 18, and the principles the courts apply, in particular needs and sharing, come from case law. GOV.UK says the judge makes arrangements for any children first, especially their housing, and decides the fairest division of the assets where there is enough to meet everyone's needs.

Two of the factors matter most where a home is concerned: the financial needs, obligations and responsibilities of each of you, and the contributions each of you has made or is likely to make to the welfare of the family, including looking after the home or caring for the family.

Applied to a house, the section 25 factors usually point to one of three outcomes:

• a sale now, with the net proceeds divided in the shares agreed or ordered
• a transfer to one of you, with or without a lump sum or a charge securing a share for the other
• a deferred sale, so the home is kept until a trigger event such as the youngest child leaving secondary school

Whether a transfer is realistic usually turns on the mortgage, because section 25(2)(a) requires the court to weigh the income, earning capacity, property and other financial resources each of you has or is likely to have in the foreseeable future. On divorce or nullity, section 25A also requires the court to consider whether your financial obligations to each other can be ended as soon after the divorce order as the court considers just and reasonable, which is often what makes a clean break order possible.

Staying in the Home While Matters Are Settled

If the home is in your spouse's or civil partner's sole name, sections 30 and 31 of the Family Law Act 1996 give you home rights: a right not to be evicted or excluded by the owner without a court order if you live there, and, if you have moved out, a right to apply for the court's leave to enter and occupy. They are a charge on the owner's interest, protected on a registered title by a notice at HM Land Registry.

GOV.UK explains how to register home rights on form HR1, says there is no fee, and confirms your spouse is told once the notice is registered.

Home rights are time limited. Under section 31(8) they end on the owner's death or when the marriage or civil partnership ends, unless an order under section 33(5), made during the marriage or civil partnership, directs otherwise, and GOV.UK says you can usually stay only until the divorce is finalised and a settlement agreed.

If you fear the home will be sold, remortgaged or transferred to defeat your claim, section 37 lets the court restrain a disposition or set aside one already made, once proceedings for financial relief have been brought. See freezing orders and hidden assets and non-disclosure.

Evidence, Valuations and Common Problems

Both of you give full disclosure, in court proceedings on Form E, the financial statement for a financial order. For the home that means the title, a current mortgage statement, any second charge or arrears, and evidence of value.

Where value is disputed, Part 25 of the Family Procedure Rules controls the evidence: neither of you may put expert evidence before the court without permission, given only where the court considers it necessary to resolve the proceedings, and the court may direct a single joint expert.

Check how the home is held, because that decides what happens if one of you dies first, and because tenants in common can hold unequal shares: see GOV.UK on joint property ownership. Where someone outside the marriage has a beneficial interest, section 24A(6) requires the court, before deciding whether to order a sale, to give that person an opportunity to make representations, which then form part of the circumstances it weighs under section 25(1).

The problems we see most often:

• agreeing a figure or a transfer before anyone has checked the redemption figure, a second charge, arrears, or whether the person keeping the home can fund the mortgage
• a deferred sale with a vague trigger, so the same argument returns years later
• leaving out property held abroad or through a company, covered on our overseas assets on divorce and business assets in divorce pages

HMRC says no Stamp Duty Land Tax is payable where an interest passes to a spouse or civil partner under an agreement or court order on divorce, dissolution, annulment or legal separation: see its guidance on transferring ownership of land or property. Helpsheet HS281 sets out the Capital Gains Tax position, which turns on when the transfer is made and on whether it is made under a formal divorce or separation agreement or court order.

How the Process Works for the Family Home

1. We take the title, the mortgage statements and the history of how the home was bought and paid for.
2. We advise on the realistic options on your figures, before either of you makes an offer.
3. Where occupation is the immediate worry we protect it, by registering home rights or by applying to court.
4. Both of you give disclosure, on Form E if the case goes to court, with valuation evidence agreed where possible and one jointly instructed valuer where it is not.
5. We negotiate, in correspondence or through family mediation, and record what is agreed in a consent order for a judge to approve.
6. If agreement is out of reach you must first attend a mediation information and assessment meeting, unless an exemption such as domestic abuse applies, and we then apply for a financial order and the case follows financial remedy proceedings. Court fees are on the GOV.UK court fees page.
7. We then implement the order: the transfer or sale, the Land Registry application, and enforcement of financial orders if it is ignored.

When Legal Advice Is Especially Important

Advice matters most where the home is the only substantial asset, where one of you would struggle to rehouse, where the property was owned before the marriage or came from an inheritance or a family gift, where a relative put money in, or where it is held through a company or a trust, as in many high net worth divorce cases.

It matters too where the position is urgent: the home on the market without your agreement, a remortgage you knew nothing about, or a partner telling you to leave. Where there is abuse, an occupation order under Part 4 of the Family Law Act 1996 can regulate who occupies the home. If you are in immediate danger call 999, and the National Domestic Abuse Helpline is 0808 2000 247.

How RakLAW Solicitors Can Help

RakLAW Solicitors is at 42 Shad Thames in Southwark, a short walk from Tower Bridge, and was founded by solicitor Rakesh Prajapati. We deal with the home as part of the whole financial settlement, because a transfer, a charge or a deferred sale only makes sense alongside your pensions, income and debts. Pensions are covered on our page on pensions on divorce.

We offer a free 15 minute consultation so you know where you stand. Our family law fees page sets out how we charge, and you can book an appointment or call 0203 345 2000.