WHAT HAPPENS TO THE FAMILY HOME? COURTENAY ULYATE | PIPPA COLMAN & ASSOCIATES SOLICITORS
In the event of a separation, the family home is often considered to be the major asset, with at least one party wanting to continue living there, especially when children are involved. But it’s important for separating parties to balance their wants and desires against potential harsh financial realities of life after separation.
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hen parties separate, there is often a dispute over the family home. In most cases, the family home is often the major asset in the property pool, together with superannuation. The family home is identified and valued with all of the other assets owned by the parties. This takes place as part of the process of working out what is available for division between the couple. The issue of the family home is more emotional, given the role it has played for the family unit, usually for many years and usually at least one part of the family will want to continue living in the family home – particularly if there are children involved. However in today’s economy, separating parties need to balance their wants and desires against the sometimes harsh financial realities of life after separation. It is very seldom that parties are able to maintain the same lifestyle that they had prior to separation. Everyone would probably prefer to remain in the comfort of their home and not have to go through the rigours of re-establishing themselves. It is important though, to give thorough thought about the expenses that are involved in keeping the family home, such as the mortgage repayments, rates and taxes and the maintenance of the home. Can you afford to keep the home? september 2016
The family home will need to be valued for the property settlement. If the parties cannot agree on a value, the Court will order a joint report from a local estate agent or surveyor. The valuer has a duty to the Court to report accurately and the figure given will be a market valuation rather than a suggested asking price. The most common options for the parties with regards to the family home are: • That one of the separating parties takes over the home and any liability (the mortgage would require refinancing); or • The property is listed for sale and the proceeds are distributed between the parties as agreed. It must be remembered that your financial situation changes after separation, as you may only have “half the income” that you had as a couple. Lenders may find it difficult to approve refinancing the mortgage with only one income earner. Seeking the advice of a financial planner would be beneficial to work out your financial options as you go through a property settlement. So while it may be ideal for one of the parties to keep the family home, it may not be realistic financially for this to occur and holding onto the family home for sentimental value is in no one’s best interest. profilemagazine
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