Selling Marital Property Before A Divorce

The divorce procedure is complex. Emotionally, the couple's life is in turmoil. Financially, complexity arises too as they need to establish how to split assets. That is why a question that frequently arises is whether you can sell a property before a divorce settlement is finalised.

At Eatons, our family law team is on hand to provide advice to couples who are considering selling a property before the divorce settlement.

Legal Ownership vs. Marital Assets

When a couple divorces, it is essential to distinguish between legal ownership and marital assets.

Legal ownership is in reference to the official registered keeper of the assets. In the case of property, it is the name that is on the deeds. Marital assets refer to the assets, resources, and property a couple acquires during their marriage and consideration is given to those that were acquired before a marriage. This distinction helps the court determine how to split assets.

However, during divorce procedures, courts in England and Wales focus on fairness rather than title deeds. It means that assets acquired by one of the parties before the marriage are still subject to division.

Therefore, in the spirit of fairness, the court can ask the couple to sell the marital property before the divorce.

Can You Sell Property Before a Settlement?

In the UK, selling a property before a divorce settlement is legally restricted subject to the below. The extent of the restriction often depends on who owns the property.

Jointly Owned Property

If both parties own the marital home, they must agree to its sale. However, when this happens, the court considers the proceeds as part of the settlement. It is important to note neither party can decide to sell the property unilaterally. Moreover, the couple’s solicitors must finalise the division of the sale’s proceeds because they are part of the divorcing couple's assets.

Solely Owned Property

In the spirit of fairness, a judge presiding over a divorce will take the value of a solely owned property into consideration. It is possible to sell property owned outside the marriage before the divorce. However, if this occurs, the sale must meet market value. Otherwise, the seller would have to make up the disparity as part of the settlement. The party who does not own the property with their husband/wife may consider registering Matrimonial Rights to the Legal Title to protect their interest.

How Can the Court Force a House Sale?

The Consent Order outlines the division of matrimonial assets once the divorce settlement is agreed. However, there are cases in which the Court might force a sale of the matrimonial home. In divorce cases, the Judge bases their decisions on fairness, financial position and needs.

These include:

1. When neither party can Afford to keep the property

2. Neither party can agree on the sale

3. It is in the interest of parties to sell

It is only after considering the factors as set out in the Matrimonial Causes Act that the judge will issue a court order. In some cases, it is also possible they will postpone the sale until the children are old enough or suitable arrangements made.

Best Practices and What to Avoid

Whilst selling a property is possible before a divorce, we recommend airing on the side of caution.

If the couple want to sell matrimonial property, we strongly advise them to seek legal advice from a family lawyer. However, it is imperative both parties agree on the sale as the proceeds are part of the financial settlement. Therefore, it is essential to communicate openly.