Breaking up and Property

  • Posted by a hidden member.
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    May 27, 2010 4:00 PM GMT
    Well here is that timeless conundrum. Me and my husband have decided to separate and eventually get a divorce. (We are legally married in California). But less than a year ago, we decided to buy a house because property values were extremely low. Now we have that age old question on what to do with the house. If we sell the house, I have to pay back the 8k I got from Obama's first-time home buyer deal and I am also on a FHA loan which also has some rules I believe when you sell within less than 5 years. Also, the house has already appreciated 50k in value and I know it will only continue to go up, so I think selling right now would be an very bad decision.

    I want to be as fair as possible. The house is my name and the loan is in my name. My husband did a quit claim and released the house over to me because his credit was not good enough to buy the house. Neither one of us are able to buy the other one out and neither one of us could afford the house on our own but could make it work through various options like roommates and stuff.

    Anyone else been in this type of situation before? How did you resolve it? Advice?

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    Jun 03, 2010 11:00 PM GMT
    Wow... a speechless topic.. I can't be the only one who has had to face this...
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    Jun 03, 2010 11:03 PM GMT
    Consult with an attorney. These are matters of California law. We may express opinions here, but this a legal issue that only the courts can decide.
  • metta

    Posts: 39078

    Jun 03, 2010 11:15 PM GMT
    I'm sorry to hear that your relationship is not going well. I do hope that you guys can find a healthy way to make your relationship work.

    In regards to your OP, you seem to be answering your own question. I have not been in the same position. I did buy a home with my best friend/business partner but he past away so it is a totally different situation.

    You have many possible options to consider before considering selling it. You obviously do not really want to sell it right now. Your options of course depend on each of your finances as to what options you really have:

    1 rent the home out and both of you could find different places to live.

    2. continue to live together, different bedrooms, as friends.

    3. one of you move out and rent out a room

    4. etc....


    It also depends on what kind of relationship you can have with your current hubby. Can you be friends? Can the relationship be repaired?
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    Jun 03, 2010 11:28 PM GMT
    Not enough info to comment hapakun. Solutions depend on the relationship you have now with your ex. How are things between you guys?

    -Doug
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    Jun 04, 2010 1:34 AM GMT
    meninlove said Not enough info to comment hapakun. Solutions depend on the relationship you have now with your ex. How are things between you guys?

    -Doug


    Very emotional and trying not to get nasty. I have decide to let the lawyers take over and let the law decide. I am trying to be reasonable but emotions get flared every time we talk about it.
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    Jun 04, 2010 1:34 AM GMT
    Hi Hapakun

    I've been in a similar situation with a spouse. I would say there are two sets of intersecting considerations:

    1) How well can you and your partner work together as business partners in the future? And how much does either of you want to be bound to each other (and, to some extent, to the past) through the property.

    and

    2) What is legally and financially possible and advantageous ? For this you will probably need a lawyer and a financial or tax adviser.

    In the case of me and my (erstwhile) spouse, it makes sense for us to end any co-ownerships we have despite an appallingly high financial cost of doing so.

    Other options we considered were one of us living in the marital home (probably with a tenant). The one in the property would pay the mortgage going forward. We would then have an agreement in place for the party in the house to buy out the other party in ten years (at the house's appraised value ten years from now). If the party in the house was unable or unwilling to buy the house in ten years, then the other party would have right of first refusal. If neither party could or would buy the property, then it would be sold and the capital gain split 50/50.

    In the end, we decided that the most practical and least crazy making thing to do was to sell the house - even though there was a considerable tax cost to doing so.

    The decision for me was clear on one front: I never really liked the house so I had no strong pull to want to live in it.

    Best of luck.
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    Jun 04, 2010 1:47 AM GMT
    If you are legally married, and acquired the house during your marriage, most likely (depending on state law of course) it does belong to both of you even with his name not on the mortgage or deed. It would be considered a marital asset.

    This is what divorce attorneys are for. They don't care who did what to whom or why you're divorcing, they just make sure the property split (as in all of it - bank accounts, 401K, as well as debts) are split evenly. How you do that is up to you. The better the relationship you have with your ex and how agreeable you are, the less involvement by attorneys and less $$.

    The more you fight, the more $$ it costs.
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    Jun 04, 2010 1:52 AM GMT
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    Jun 04, 2010 1:56 AM GMT
    ejay79 saidIf you are legally married, and acquired the house during your marriage, most likely (depending on state law of course) it does belong to both of you even with his name not on the mortgage or deed. It would be considered a marital asset.

    Not so fast. Income received during the marriage is community property (if you happen to live in a community property state which CA is). Assets purchased with community income would be community property while assets purchased with separate income would not be. Assets purchased with a mixture of the two would have to be apportioned according to the relative contributions.
    It can get incredibly complicated and two divorce lawyers would be delighted to bill you to sort things out. The simplest and fairest thing to do would be to sell the house and split the proceeds (or losses) evenly.