As divorce attorneys in Charleston, South Carolina, our clients frequently want to know who gets the house in a divorce. The short answer is that it completely depends on each case. The long answer can be a little complicated, but in this article, our family court lawyers take you through some of the considerations when dealing with a marital residence in family court.
First, you need to know that South Carolina’s rules of equitable distribution (sometimes called “equitable division”) will apply in all cases to guide the division of assets including a home.
What if One Spouse Wants the House and the Other Doesn’t?
We first need to decide if that spouse can actually afford to keep the house. Generally, the spouse keeping the house needs to be able to remove the other spouse from the mortgage at some point in the reasonable future. Since a bank normally won’t just release a party from the mortgage, then the spouse keeping the home will usually have to refinance the loan and take out a new loan that has only that spouse’s name on it. To qualify for a refinance loan, that spouse generally must have a credit score and monthly cash flow that satisfy the lender. If you can’t get the other person off of the loan, or you can’t afford the house by yourself (alimony may be applicable), then you probably can’t keep the house. Also, unless there are sufficient marital assets to give the other spouse to make up for the equity in the home, then the person keeping the house may have to borrow funds from a family member to buy the other one out.
Here’s an example: Husband and Wife have a house with $100,000 in equity and they have $20,000 in savings. There are no other assets or debts, and a 50/50 split of the assets is appropriate in this case. So, both spouses are entitled to $60,000 from the $120,000 marital estate. Wife wants to keep the house. In this example, unless Wife can come up with $40,000 to give to Husband, such as by borrowing the money, then the house probably needs to be sold.
What if Both Spouses Want the House?
It really depends on the size of the marital estate. If the marital estate is large enough, then the court can award the house and its equity to one spouse while the other makes up for it by receiving other assets. Family court judges have a ton of discretion in making their decisions. A tie-breaker might be to let the spouse who has more time with the kids keep the house so that the kids get to spend more time in the home they are most accustomed to. The judge might also consider who has a better chance of qualifying for a refinance or which spouse has a better chance of being able to afford the payments and other expenses. If there was marital fault, such as adultery, it’s possible the judge finds it fair to not force the spouse who didn’t have any marital fault out of the home.
In a case with a smaller marital estate, such as where the house is the only real asset, then the house will likely be listed for sale.
What if Neither Spouse Wants the House?
The house should be listed for sale. It’s obviously easier to divide sale proceeds (money) than real estate, and we can eliminate the ongoing monthly obligations which include mortgage payments, taxes, insurance, maintenance, HOA fees, and other expenses. Preferably, the parties can agree on a realtor, which will make them both more comfortable trusting the realtor’s advice for decisions like whether to accept or reject an offer or whether making a repair is worth doing.
We suggest that any written agreements or court orders consider including various terms and conditions. Here are some of the more common ones:
- Whether an appraisal should be performed
- The listing price
- Outlining what offers will be accepted or rejected
- Repairs to be made and who is making them or where the funds are coming from to pay for them
- Allowing both parties access so they can assess the property and fill out their property condition disclosures which are required by law when selling property
- Whether one of the spouses gets to live in the home, and if so, requiring that person to keep the home in a neat, clean, and “show ready” condition (as determined by the realtor) at all times
Can You Sell Your Home Before Your Divorce is Settled?
Yes (if there is no court order preventing the sale). In this scenario, it is common for one of the parties’ lawyers to hold the sale proceeds in his or her escrow account until the parties decide how everything is being split or until a judge orders how to divide the proceeds.
What Do I Need to Get Together for My Divorce Attorney?
The more organized you are, the less time your divorce lawyer has to spend on your case, which helps keep your legal fees down. For now, start rounding up the following info, or make sure you have access to it easily online:
- Most recent mortgage statement(s) (remember some properties have more than one mortgage, such as a HELOC)
- Any HOA statements showing either monthly/quarterly/yearly fees as well as any unpaid fines or assessments
- Most recent appraisal (if you don’t have one, but you’ve done a refinance in the last 2 or 3 years, your bank may have a copy of the appraisal they did with the refinance)
- Copy of any comparative market analysis (CMA) or broker’s price opinion (BPO) that any real estate profession has recently preformed
- Any repair estimates
- The last tax bill
If the House Will Be Sold, Who Pays for the Repairs to Get It Ready for Sale?
This often depends on how much money each spouse makes and how much money is available to pull from the marital estate. If one party pays for it, that party often gets repaid off the top before the remainder of the sale proceeds are split.
What Should I Do Next?
Aside from gathering all of the information that’s relevant to your case, you should schedule a consultation with an attorney at Futeral & Nelson. Divorce cases are very case specific, and the sooner you begin protecting yourself under the advice of legal counsel, the better chance you have for the case to go the way you want it to.