Will I Be Forced To Sell Home Upon Divorce?

Source : The Sunday Times, Mar 23, 2008

Q MY husband and I have been separated for nine months. He has moved out of our home, but my children and I are still living in the condominium, which is under both his name and mine.

When we divorce, what will happen to the condo? Will I be forced to sell it and split the money 50:50? What are our options if my children and I want to continue living in the condo? My husband is currently paying half of the mortgage loan.

A THE fate of your matrimonial home can be affected in two scenarios - if there is a default in the mortgage repayments and upon divorce.

If there is a default in the mortgage payments, the mortgagee bank would be entitled to recover possession of the property and sell it off.

In the event of a divorce, the division of the matrimonial home will be adjudged by the court if the parties are unable to reach an amicable settlement. When it falls to the court to decide, there are various factors that it takes into account.

The starting point is the parties’ respective direct financial contributions to the initial payments and the monthly mortgage. Payments for these through Central Provident Fund (CPF) monies are also taken into account. The court then takes into account indirect financial contributions such as renovations, payment for furniture, fittings and furnishings, monthly maintenance charges, utilities bills and other outgoings on the home.

Finally, the court takes into account indirect non-financial contributions such as looking after the children and the welfare of the family, cooking, housekeeping, looking after an aged or disabled member of the family.

In raising your children and looking after them, you would have earned an additional equity or share in the matrimonial home that would be added to your share due to your financial contributions.

The court also takes into account that if you have the care and control of your children, you would continue contributing towards their upbringing and welfare. If there was an agreement, its terms (for instance in a separation deed) would also be a factor to be considered.

However, the court does not embark on a detailed calculation of mathematical precision. Instead, it adopts a ‘broad brush’ approach and understandably so, as no one keeps such neat and precise accounts as in a business.

The court is also not compelled to order an equal division as the law requires the division to be just and equitable, although in some cases, an equal division may be the most just and equitable one.

In short, the court will be fair to both parties. Having arrived at your share or equity in the home, the next issue is to decide how to satisfy that equity, for instance whether you have the financial means and capability to buy out your husband’s share.

Depending on your age and the amount of funds available in your CPF account, you may be able to use some of those funds to buy out your husband’s share. You may also be able to find a bank willing to enter into a fresh loan agreement with you for the apartment.

If your husband is agreeable, you may also be able to postpone the sale until, say, when the youngest child reaches 21 years of age or completes his or her education, whichever occurs later.

The apartment may have to be sold as a last resort, and after deducting the outstanding loan, the refund to your respective CPF accounts and expenses of the sale, the rest of the money will then be distributed according to you and your husband’s shares as determined by the court.

While it is true that it is possible to maintain the standard of living that both parties have been used to during marriage, it is also true that upon a divorce, there will almost always be a lowering of the standard. You may have to find alternative affordable accommodation for yourself and your children and look to your husband to contribute towards the expenses as part of his monthly maintenance obligations.

With the recent amendments to the CPF Act, you may be able to persuade the courts to transfer the apartment to you without having to refund your husband’s CPF account first, but it may not be reasonable for you to insist on living in a private condo when there is ample affordable public housing available.

Amolat Singh
Lawyer, Amolat & Partners

Advice provided in this column is not meant as a substitute for comprehensive professional advice.