Case Example

The matrimonial home is the joint names of the husband and wife. They have two children and have been married for 9 years. The works as a part-time and husband works full time. The children will be living with her after the divorce. The house which is their only capital assets has a market value of £200,000. There is a mortgage outstanding of £90,000 leaving an equity of £110,000.  

The equity of £110,000 would not be sufficient to re-house both parties. The wife with her part time earnings could raise sufficient mortgage and would need the at least the whole of the equity and the husband’s income is not sufficient for him to buy his own home, although he could do if he had a lump sum from the house. Clearly both parties needs cannot be met and as the children will require housing the matrimonial home will have to be retained. The husband’s needs will have to come second to that of the children and he may not therefore receive any money for his share of the property until a future date. 

The possible Orders could be as follows:- 

(1) The house is transferred to the wife’s name outright with the husband not receiving a share.  The husband could then be released from making any maintenance payments to the wife. 

As there is a mortgage the lender may be unwilling to release the husband from his obligations under the mortgage to make repayments. The lender will want to ensure that it can pursue the husband should the wife fail to meet the mortgage payments. In this situation the Wife can be asked to give a undertaking (ie a promise to the Court ) to use her best endeavours to release the husband from the mortgage.  

If the husband cannot be released from the mortgage he may not be able to obtain another mortgage to buy his own home.  

(2) The house is transferred to the wife’s name outright with the husband receiving a lump sum for his share.  

The wife may be able to raise the lump sum by re-mortgaging the house. 

(3) The house is transferred to the wife’s name with the husband having a charge on the property for a specified sum.   The charge to become enforceable when the children reach 17 (or finish full time education if later) or when the wife dies, remarries or cohabits for more than 6 months whichever event happens first.  

(4) The house remains in joint names  with an agreement that it be sold when the children reach 17 (or finish full time education if later) or when the wife dies, remarries or cohabits for more than 6 months whichever event happens first. When the property is sold the husband can take his share of the equity which can be determined as a percentage of the equity or specified to be a fixed sum.