Additional Real Estate Concerns with Divorce
The characteristics of real estate are relevant on a temporary basis while the divorce is pending.
On a temporary basis, the court can award temporary who’s got a right to occupy it on a temporary basis (which is basically stating, “yes, thanks, we appreciate that one or both of you are on the title, but temporarily husband/wife is going to have temporary occupancy.” Further, meanwhile, the court’s going to require one or both of the spouses to pay the mortgage on a temporary basis. And sometimes, that’s a separate assignment where one stays and the other pays; in other instances, it’s a shared assignment where both parties are expected to contribute.
Also temporarily, the court will assign responsibility for the other house expenses. Sometimes insurance & taxes are each separately paid, but certainly, utilities are separately paid, and any other upkeep that’s related to the house is its own expense. Perhaps you get a temporary order that has the husband paying the mortgage, but since the wife is staying in the house, she’s got to pay the utilities and the upkeep; so if the water heater goes out and it is $400 to replace the water heater, the wife would pay that upkeep.
Note that there’s not much concern on a temporary basis for the equity in the real estate.
In most circumstances, there is not a lot of access to home equity during a divorce. However, we do always want to keep tabs on any home equity line of credit, especially if it’s untapped as of the time of the divorce filing. We want to know if one party has the right to use it and if we could shut it down – the last thing we want is the other spouse drawing down the equity in the home because they’re living beyond their means and then later claiming that HELOC to be marital debt! That would reduce both parties’ share of the equity in the house. Generally, we would catch that and absolutely want to hold that as a pre-distribution of the other spouse’s share of the home equity and make sure that that’s only on their side of the balance sheet.
Concerning final real estate issues, all three components are addressed. If the other spouse keeps the house, we want to make sure the house gets appropriately retitled using a quick claim deed or an SREDJ. In that situation, we also want to make sure that the mortgage is refinanced so that our client doesn’t have the mortgage on their credit anymore. And, of course, we want to ensure that our client gets their share of the equity. Alternatively, if our client wants to keep the house, we strategically want to consider whether the other spouse should stay on the mortgage (because our client can’t keep the house otherwise) and whether the other spouse should have to wait on their share of the equity (because our client can’t keep the house otherwise).
If the parties are going to sell the house, the retitling will take care of itself, the mortgage takes care of itself, and then we just must figure out how the equity’s divided. A divorce decree generally is going to specify by dollar amount or the percentage which spouse is going to get what.