We are often asked this question early on in the separation of a couple, whether they are married or unmarried.
The short answer to this question is quite simply, that one of you buys the other out of their respective interest in the property (whatever that may be) or the property is sold and divided in whatever proportions you each agree. Sometimes that is relatively quick or sometimes it can be at a future date to be agreed.
A number of further key questions then need to be considered as follows:
What if we are married?
If you are married, at some stage upon divorce you will require a financial consent order. It is therefore not advisable to prematurely buy your Spouse out of the mortgage until you have sought independent legal advice on the overall financial positions, and legal rights, of you and your Spouse.
We understand that often spouses who separate do not want to live with one another for any significant period of time following separation for a variety of reasons. However, before you take action and substantially change your mortgage product, or move out, it is best to always seek advice from a specialist family law solicitor on the wider financial circumstances before making a premature decision which you may come to regret.
What if we are not married?
Many couples these days are not married. Nevertheless, before you make a decision, you need to understand your legal rights and obligations in the round before committing to either taking out a new mortgage produce or being removed from an existing one.
What are the main issues I need to consider?
- The value of the property needs to be agreed.
- How long is left on the existing mortgage and what the is the outstanding balance owed to the mortgage provider?
- Whether there is a redemption penalty payable for redeeming the mortgage early and if so, what that is and when will it reduce, or when will there be no penalty.
- For the person proposing to buy the other out of their share, do they have sufficient future borrowing capacity to be able to do so, have they explored that with a mortgage broker and do they have an offer in principle.
- Can you afford to buy the other person out, not just in terms of your borrowing capacity but physical affordability – is it better that the property is sold for you to down size, this should always be considered but even more so in this current economic climate.
- Should you move out of the property prior to reaching an agreement or should you remain there. The answer to this question wholly depends upon your specific circumstances and so you should always seek specific legal advice from a family law Solicitor.
- Are there children to consider? If so, you should certainly seek independent legal advice as your situation is more complex simply as there are far more factors to take account of.
How do we agree a valuation of the property?
Valuations may change over many months or years, and so it is important to ensure that updated valuations of properties are obtained when buying a co-owner out of the other`s share.
Valuations can be obtained for free from estate agents. We would recommend obtaining at least 3 valuations from reputable estate agents who you would consider selling your property with. You would then agree the average value with the co-owner, your spouse or ex-partner.
If you cannot agree a valuation, then you can jointly instruct a RICS Chartered Surveyor, to provide a more detailed and precise valuation following a thorough inspection of the property. This comes at a cost, usually between £500 – £1,000 + Vat depending upon who values the property, the approximate valuation of the property and the location of the property. The costs should be shared equally between the owners of the property.
How do we agree what shares of the property we own?
You will either own the property as Joint Tenants, and therefore in equal shares, or as tenants in common in unequal shares, or sometimes as tenants in common in equal shares. We will be able to ascertain this by simply looking at the title register to your property.
How can we help?
Our expert Family Law Solicitors will be able to guide and advise you through whatever situation you face. If you later need to use our expert Conveyancing team then they will be able to further assist you. We can assist you wherever you may be based and our Solicitors are always happy to have a free initial no obligation discussion with you to see how we can help.
