The fate of the family home in the event of divorce, more than once a sensitive issue

While a divorce in itself already involves considerable emotional distress, many former spouses are also confronted at that time with complex questions about the division of their joint property, including the former family home. “Who will take over the family home?”, “Who will continue to pay the mortgage loan?” and “Will I recover the personal funds I invested myself if the family home is taken over or sold?” are frequently asked questions to which we are pleased to provide an answer in the explanation below.

The liquidation and division procedure

In addition to obtaining the divorce, the spouses’ undivided movable and immovable property or matrimonial assets must also be ‘liquidated and divided’, as this is referred to in legal terminology. In this regard, it is always important to make a clear distinction between two possible divorce procedures:

1.  If spouses choose to divorce by way of a divorce by mutual consent (EOT), the division of the property takes place at the same time as the divorce is pronounced. However, the divorce by mutual consent procedure is only available to spouses who have reached a full agreement regarding, among other things, the division of their movable and immovable property, the allocation of costs, and the residence and cost arrangements concerning their common children. What the spouses agree on is incorporated into an EOT agreement, which is submitted to the Family Court. Ultimately, it is the Family Court that grants the divorce and also gives enforceable effect to the agreement concerning, among other things, the division of the movable and immovable property.
2. As soon as it becomes clear that the spouses cannot reach a full agreement, the divorce will proceed through the divorce on the grounds of irretrievable breakdown (EOO) procedure. For their divorce, the spouses apply to the Family Court, which pronounces the divorce in a judgment and at the same time appoints a notary-liquidator, who is instructed by the Family Court to liquidate and divide the movable and immovable assets of the former spouses. If the spouses agree on a specific notary, they may indicate this to the Family Court, but in the absence of an agreement, a notary chosen by the Family Court will always be appointed. The former spouses must then inform the notary whether or not they wish to take over the other former spouse’s share in the family home. If only one of the two former spouses wishes to take over the property, that former spouse will effectively be given the opportunity to do so. As soon as both former spouses wish to take over the family home and no agreement can be reached on this, the notary will decide whether, based on preferential takeover rights (such as, for example, the exercise of a profession in the family home), one of the two former spouses may take over the family home, or whether the family home must be sold at public auction.

What about the costs incurred and the (mortgage) loan relating to the family home since the start of the divorce proceedings?

The spouses are always free to reach an arrangement on this by mutual agreement during their divorce proceedings, which, in the case of a divorce by mutual consent, is included in the settlement agreement or, in the case of a divorce due to irretrievable breakdown, is initially confirmed by the Family Court as an interim measure and later ratified by the liquidating notary.

If no mutual agreement can be reached, the liquidation date, being the date on which the divorce proceedings are initiated before the Family Court, constitutes an important turning point. All owner-related costs concerning the family home paid by one of the spouses since the above-mentioned date can be recovered from the other spouse within the liquidation and division proceedings. In this respect, it is important to make a clear distinction between owner-related costs, such as property tax, fire insurance, and necessary maintenance and repair costs, on the one hand, and mere occupancy costs, such as utilities and minor maintenance costs, on the other hand, which are then borne solely by the spouse who continues to occupy the home exclusively.

As long as both (former) spouses are owners of the home, they are in principle both required to continue repaying the (mortgage) loan linked to the family home. During the divorce proceedings, however, it is quite common for one of the spouses to be granted the exclusive right to use the home, while the other spouse moves elsewhere. For the period during which this is the factual situation, it may be decided that the spouse who continues to live in the family home will bear the full (mortgage) loan. After all, during the liquidation and division, the spouse who has left the family home will be entitled to payment of an occupancy compensation by the spouse who continues to live in the family home for the period during which he or she had no access to the family home, even though it still remains his or her property. In this way, the payment (or reimbursement) of half of the mortgage loan by one spouse and the payment of an occupancy compensation by the other spouse largely offset each other.

What about the personal contribution of one of the spouses?

It frequently occurs that one of the spouses invests personal funds in the purchase of the family home, for example funds that he or she already owned before the marriage or that were received through an inheritance, whether at the time of purchase or during later renovation works. If it can be demonstrated objectively, with the necessary supporting documents, that personal funds were invested in a jointly owned home, those funds may be reclaimed upon divorce. However, proving the personal nature of the invested funds many years later is no easy task, and all too often spouses are not aware at the time of the investment of the potentially adverse financial consequences in the event of divorce. 

The aforementioned arrangement applies to any estate that has made investments in another estate. Consequently, within the statutory matrimonial property regime, it is entirely possible that the common estate has invested in a home belonging to one of the spouses’ separate estates, in which case the common estate is entitled to reimbursement from the separate estate of one of the spouses.

In this regard, it is also important to note that if the investments made have caused the (family) home to increase in value at the time of sale or takeover upon divorce compared with the time when the investment was made, the resulting added value can also be taken into account in the divorce.

What about the family home if you are not married, but are only de facto or legally cohabiting?

For both de facto cohabitants and legal cohabitants, there are only two estates, namely each partner’s separate estate. If cohabitants choose to purchase a home together, that home is held in co-ownership between them – just as with married couples under a separation of property regime without an added internal common estate.

Cohabitants may also choose not to purchase the home in equal shares, but to opt for a different ownership ratio. That ownership ratio then forms the basis for each ex-partner’s entitlement to the sale price or takeover price.

If a dispute arises between cohabitants regarding the division of the family home upon the breakdown of the relationship, they may likewise apply to the Family Court to obtain the appointment of a notary-liquidator who will effect the termination of the co-ownership in relation to the family home.

Conclusion: a forewarned man or woman is worth two

When you and your spouse proceed with the purchase of a joint home, there are several distinct factors that may play a role in the ultimate fate of the property in the event of divorce.

It is therefore important to obtain comprehensive information already at the time you marry about what may happen to the future family home in the event of a possible divorce, again at the time the purchase of a family home is actually made, and in fact whenever you intend to invest personal funds in the family home. This is to prevent you, on top of the emotional hardship of your divorce, from also being faced with additional financial surprises.

Reyns Advocaten heeft een ruime expertise in het familie- en familiaal vermogensrecht en u kan dan ook steeds bij ons terecht met al uw vragen omtrent de aankoop van een gezamenlijke woning en de gevolgen voor de gezinswoning bij echtscheiding.

Disclaimer: the above explanation relates to the situation in which the spouses are joint owners of immovable property purchased by them during the marriage. It is also possible that one of the spouses was already the owner of immovable property prior to the marriage and/or that immovable property is contributed to a joint marital estate, in which case different rules apply. For tailored advice regarding your specific situation, it is always advisable to consult your legal counsel, and we therefore gladly invite you for a consultation with one of our lawyers.