Going through a divorce is always difficult, but if you own a house together it can be even more complicated. Divorcing with shared property can bring up a lot of questions. Who keeps the house? Should you sell? How do you split the proceeds from a sale?

Understanding Community Property

California is a community property state. This means that by default, property acquired during the marriage is presumed to be a shared and equally owned asset. If you bought your home during the course of your marriage, and both you and your spouse are on the title, then you and your spouse would have 50/50 ownership of the home (or the equity that you have in the home). 

The presumption of community property may not apply if only one spouse’s name is on the title. This can depend on the purchaser’s intent for the home and whether there was a verbal or written agreement regarding ownership. If there has been a verbal or written agreement stating that the home is intended to belong to both spouses, the spouse that is not on the title may have a claim to the home. This can be difficult to navigate, so ensure that you work with a skilled attorney that will help you retain or stake claim to property that you feel entitled to.

Property Owned Prior to Marriage

If you entered into the marriage with ownership of a home, it may or may not be shared property. If you bought the home outright or paid off your mortgage prior to entering into the marriage, then it is generally considered your property rather than community property.

This does get more complicated if mortgage payments were made throughout the marriage. If you bought the home before the marriage, but your spouse contributed to mortgage payments, repairs, or renovations to the home during the marriage, they may be entitled to a portion of the home equity. If the marriage was long, this may be quite significant. 

What are the Divorcing Couple’s Options?

1. Selling the Home: The most common solution is to sell the home and split the profits evenly. Often, neither party is in a financial position to take on sole ownership of the home, so selling is the best option for both parties.
2. Buying Out Your Former Spouse: If one party wishes to stay in the house after the divorce, they can buy the other party out. This means paying the spouse for their share of the home. The spouse that wishes to stay will also need to refinance the mortgage, if there is one, to remove the spouse that they bought out. 
3. Deferred Sale: California family code section 3800-3810 allows courts to order a deferred sale of the family home. A deferred sale suspends the sale of the house and grants temporary exclusive use of the home to one party in the divorce. This is done when the couple has minor children. The goal of a deferred sale is to minimize the impact of the divorce on the children by letting them continue to grow up in the same home and remain in their current school. It is also common to request a deferred sale if changes have been made to the home to improve accessibility for a disabled child.