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How to buy your spouse or partner out of the Family Home
Important factors to consider
Do we need to go to Court?
Our recommendations
What to do next?
Contact us
www.jeremysutton.co.nz
You can claim your half share in the Family Home if: • Your spouse or your partner and you have been together
for more than three years; • You or your partner own a house (even if only one party’s
name is on the certificate of title); • The house is not subject to any prenuptial agreement;
and • No exceptional circumstances apply.
You can
claim
your half
share in
the
Family
Home
when …
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Agreement to sell the Family Home
You could both agree to sell the Family Home. This is not always possible as one party may want to live in it. However, the benefit is that it provides a clean break and frees up cash for each party to purchase or rent their own accommodation. This is done by selling the house, paying the mortgage off with the proceeds and dividing the equity between you and your ex-partner.
You could
both agree
to sell the
family
home
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Buying your partner out of the Family Home This is a common situation especially if you have the day-to-day care of the children. You may wish to buy your partner out of their share so that the children do not have to move houses. If there is a mortgage on the property, this will need to be transferred to you and you will have to take sole charge of it. You will need to ask yourself – can you afford the mortgage payments? Will the banks agree to you being the sole mortgagee? If you are not in the financial position to take on the mortgage you may have to look at other options. The party who is not living in the Family Home needs to be proactive in making the other party purchase their share in the Family Home. The party who has remained in the home may be happy to continue there. This raises the issue of post separation contributions. We can help you to come to an agreement on this.
Can you
afford the
mortgage
payments?
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Continuing to live into the house until the mortgage payments end If your mortgage payments are not far from ending and you and your partner are on good terms then you could both reach agreement to stay in the Family Home and pay the mortgage until it ends. However, one partner may wish to move out of the Family Home. In this case you would have to negotiate paying rent to the other. This may not be an affordable option.
Can you
continue to
live in the
house
together?
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Your options if you have negative equity It will be hard to sell the Family Home if you have negative equity. You will have limited options due to your inability to pay off the mortgage in full. Unless you are able to negotiate other terms with your mortgage provider then you will both continue to be liable for the mortgage repayments.
What to do
when you
can’t pay
the
mortgage?
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Certificate of Title Firstly, it is important to get a copy of the certificate of title of your property. This will tell you who the legal owners of the property are. It will also show if any other party has a registered interest against it and what interests will need to be discharged to sell your property. An example of a registered interest against your property is a caveat. This is a notice that someone else has an interest in this property. This cannot be lifted unless by consent or by a hearing.
Get a
certificate
of title to
confirm
legal
ownership
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Q: “What if my name is not on the Title?” If your name is not on the mortgage or deed of the house then that does not mean that you have no rights or claims to the property. Under the Property (Relationships) Act 1976 a Family Home means “the dwelling/house that either or both of the spouses or partners use habitually or from time to time as the only or principal family residence, together with any land, buildings, or improvements appurtenant to that dwelling/house and used wholly or principally for the purposes of the household.” Therefore, unless it is precluded from the relationship property pool by a prenuptial relationship property agreement, it will be relationship property.
What if
your name
isn’t on the
Title?
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Valuation It is important to get a valuation from a certified registered valuer. This will determine the market worth of a house or property. It is best to get prior agreement with the other party on who will value the Family Home. That way there will be no argument from your ex-partner as to if the valuation is accepted. A registered property valuer combines all their knowledge and experience with their observations and research undertaken of the property and its surrounding area, and determines the market value. A property valuation costs approximately $500 - $800 plus GST. The valuation will normally last for six months. Your ex-partner may agree to split the cost.
Determine
the market
value of
your house
or property
with a
certified
registered
valuation
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Building Inspection It is important to know about all possible defects and problems before buying a home. This will protect you in the long term. Inspections are carried out in all accessible parts of your home to determine if there are any defects.
Know about
all possible
defects and
problems
before
buying a
home
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Maintenance It is important to make sure that your home is in the best condition for sale. If you think that the partner who has lived in the house post separation has caused damage to it or has decreased the value of the Family Home then you may have a claim for compensation of dissipation of relationship property under section 18C of the Property (Relationships) Act 1976. To be successful in making a claim under s18C you would have to prove an intentional act which causes some reduction in value. Case law has proven that a hasty sale could also be covered by section 18C. However, causation by one party must be proven to make a s18C claim. However, inflation would not count as this was depreciation according to external market forces.
Has your
partner
damaged
the house
post
separation?
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Ownership – Family Trust Your house may be owned by a Family Trust. Upon separation, it is advisable that you wind up any trusts in which you are the joint beneficiaries of. The winding up of the trust and the sale of the house this will need to be done by resolution of all trustees. You may wish to keep your share of the house in a trust for your children. This can be done by transferring the share to a trust in your sole name.
Is your
Home
owned by a
Family
Trust?
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Finance You cannot simply “take over” the mortgage. The mortgage will need to be transferred to your sole name. This can be done through the banks. If you have been the party released from your mortgagee obligations it is prudent to ask for the bank’s proof that they have discharged you from your obligations.
You cannot
“take
over” the
mortgage
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If matters cannot be agreed on and end up going to Court then this will determine: • Who can stay in the Family Home in the short term; • Whether the property should be sold or not; • If the property is to remain unsold, who can stay in it
in the long term; • If there are exceptional circumstances which warrant
a departure from equal sharing; or • How post separation contributions or dissipation in
relationship property should be determined. The Court can make orders on the above matters.
If it comes
to court …
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Q: “What if my ex has already sold the home?” If one partner has already sold the home then the Court under s11B of The Property (Relationships) Act 1976 can order the party that took the proceeds of the Family Home to pay the other party compensation for their share.
“What if
my ex has
already
sold the
home?”
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Counselling We understand that this will be an emotional time for you. We recommend that you talk to a counsellor to assist you with your decisions about what to do with your share in the Family Home. A counsellor can provide emotional support to ensure you are making a decision that meets your needs and future goals.
A
counsellor
can provide
emotional
support
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Your strategy We will help you with your tactics and goals from the start. Your goals and needs will depend on your children, your financial position and other relevant factors.
Helping you
with your
strategy
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Obtaining an outcome for you We are experienced in drawing up relationship property agreements to deal with the ownership and occupation of the Family Home. We can help you deal with post separation contributions and third party loans from family members. If we are unable to get agreement with the other party then we are experienced in filing proceedings in the Family Court to ensure you get your share in the Family Home.
Helping you
with your
relationship
property
agreements
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Arrange a consultation today Ph. (09) 309 4647 Email me at [email protected]
We will arrange a first meeting on an agreed fixed fee. That session will normally last one hour and discuss your rights, the process and your options. It will be practical in nature.
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We make it easy for you to contact us …
(09) 309-4647
www.jeremysutton.co.nz
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