One of the most complex and emotionally loaded aspects of a divorce is the division of the marital home. The question of who can stay in the house, how the value of the house is determined, and what happens with any mortgage debts, can lead to a lot of uncertainty. In this article we discuss everything you need to know about the division of the house during a divorce, including the different options and what to look for to make this process run as smoothly as possible.
What should you look for in the division of the marital home?
Many factors come into play in the division of the marital home. Here are some important things to watch out for:
1. Ownership of the House
The first step in dividing the house is to determine who owns the house. There are three possible situations:
- Community of property: If you are married in community of property (before 1 January 2018), the house is automatically owned by both partners, regardless of who pays the mortgage. In this case, the house is divided 50/50 in the divorce.
- Limited community of property: For marriages entered into after 1 January 2018, the limited community of property applies. In this case, only the house acquired during the marriage is common property. If one of the partners already owned the house before the marriage, this house remains out of the division.
- Marital conditions: If you are married on marital conditions, the agreements you have laid down in the conditions apply. The house may therefore be owned by one partner, or specific agreements may have been made about the division of it.
2. What are the options for the division of the house?
There are several ways in which the marital home can be divided. The choice depends on your specific situation and desires. The three most common options are:
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One of the partners continues to live in the house
If one of the partners wants to continue living in the house, this partner must buy out the other. This means that the departing partner must be compensated for half of the equity in the house. It is important to look at whether the remaining partner can take over the mortgage and whether the bank agrees to this. -
The house is sold
If neither partner wants to continue living in the house, it can be decided to sell the house. The proceeds of the sale are then divided according to the ownership ratios. Any overage or residual debt must also be divided fairly. This can be a good solution if there is a mortgage that neither party can bear independently. -
The house is rented out temporarily
In some cases, it may be an option to rent out the house temporarily. This often happens when the housing market is unfavorable and a direct sale would not be advantageous. This solution can give time to come to a final decision.
3. How is the value of the house determined?
In a divorce, the value of the marital home must be determined to enable a fair division. The value of the house can be determined in different ways:
- Appraisal by an independent appraiser: This is the most reliable way to determine the value of the house. An independent appraiser determines the market value of the house based on the current housing market and the condition of the house.
- Written valuation by a realtor: In some cases, a realtor can draw up a valuation. This is often cheaper than an official appraisal, but it may be less accurate.
- Mutual valuation: If both partners agree on the value of the house, they can determine a value themselves. This can be based, for example, on recent sales figures of comparable houses in the neighborhood.
4. What happens to the mortgage in a divorce?
The mortgage is often a major point of contention in the division of the house. There are different scenarios possible:
- Takeover of the mortgage by one of the partners: If one of the partners wants to continue living in the house, he or she can try to take over the mortgage. This means that the departing partner must be released from the joint liability for the mortgage. This can only be done if the bank agrees and the remaining partner is financially capable of carrying the mortgage independently.
- Mortgage remains in both names: In some cases, the mortgage remains in both names, even though only one partner lives in the house. This can be a temporary solution, but it can carry financial risks for the departing partner.
- Sale of the house and repayment of the mortgage: If the house is sold, the mortgage is usually fully repaid from the proceeds of the sale. Any surplus value is divided between both partners, and in the case of a remaining debt, both partners must make an arrangement to meet this debt.
5. Surplus value or residual debt
In the division of the house, there may be overvalue or a remaining debt. These are important financial matters that need to be resolved in a fair manner:
- Overvalue: If the house is worth more than the outstanding mortgage when sold, there is overvalue. This surplus value must be divided according to the ownership ratios. This means that each of the partners is entitled to a part of the surplus value.
- Remaining debt: If the house is worth less than the outstanding mortgage, there is a remaining debt. Both partners are in principle responsible for this debt, unless other agreements have been made in the marital conditions.
6. Who pays the living expenses during the divorce process?
During the divorce, the costs of the marital home continue to run, such as mortgage costs, energy costs, and any maintenance costs. The division of these burdens can often cause conflicts, especially if one partner continues to live in the house and the other has already left. In most cases, both partners remain responsible for the costs until the house is officially divided. It is important to make clear agreements about this, for example in a preliminary arrangement.
7. Tax consequence of the division of the house
A divorce also has fiscal consequences, especially in the field of the own home and mortgage interest deduction. The partner who continues to live in the house can only continue to deduct the mortgage interest if he or she carries the full mortgage burden and the ex-partner is no longer the owner of the house. In addition, you should take into account the tax rules around the overvalue of the house, which can affect possible future deduction possibilities.
Mortgage after the divorce: liability, release and recourse
Two different questions arise with the mortgage. The first is what the bank can claim from each of you. The second is what you must bear as between yourselves. An arrangement in the divorce settlement (convenant) only answers the second question.
Towards the bank: jointly and severally liable
If you both signed the mortgage deed as debtors, you are as a rule jointly and severally liable. The bank can then hold each of you liable for the entire outstanding amount (Article 6:7 of the Dutch Civil Code, BW). That remains the case after the divorce, even if you no longer live in the house and even if the settlement states that your ex will pay the mortgage. If your ex does not pay, the bank can therefore send you reminders, call in the loan or have the house sold. Check in the mortgage deed and the loan conditions who the debtors are.
Release from joint and several liability
If one of you takes over the house, the departing partner can ask the lender to be released from joint and several liability. The bank is not obliged to agree. It assesses, among other things, whether the remaining partner can bear the costs alone. Record in the settlement who will submit the request, which documents are needed, what the deadline is and what happens if the bank refuses, for example sale of the house. Only assume that you have been released once the bank has confirmed this in writing, and make sure the transfer at the notary follows on from that.
Between yourselves: recourse if you pay more than your share
As between you and your ex, each of you bears the part of the debt that concerns him or her in your mutual relationship (Article 6:10 BW). Which part that is follows from your arrangements, your matrimonial property regime and the circumstances. If you pay more than your share, for example because you pay the full monthly instalment to prevent arrears, you can in principle recover the excess from your ex. Keep proof of every payment, record interim arrangements in writing and keep an eye on the limitation period. A recourse claim is in principle time-barred five years after each payment above your share (Article 3:310 BW; Supreme Court 6 April 2012, ECLI:NL:HR:2012:BU3784). Between spouses and registered partners, that period does not expire as long as the marriage (without separation from bed and board) or the registered partnership lasts; it then continues until six months after it has ended (Articles 3:320 and 3:321 BW). A written demand or acknowledgement can interrupt the limitation period. You can read more about joint and several liability, recourse and a refused release in joint loan after divorce.
Remaining debt after a sale
If the proceeds are lower than the mortgage debt, you will as a rule both remain liable to the bank for the remaining debt. As between yourselves, the division again follows from your arrangements and the applicable property law. The Nationale Hypotheek Garantie (NHG, the Dutch national mortgage guarantee) has its own conditions; do not assume that the remaining debt will automatically be waived.
Frequently Asked Questions about the Division of the Marital Home
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Can I stay in the house after the divorce?
Yes, you can stay in the house if you are financially capable of taking over the mortgage and buying out the other partner. However, this must be approved by the mortgage provider. -
What if we disagree about the division of the house?
If you cannot agree together, the court can make a decision about the division of the house. This often happens when there are conflicts about the value of the house, the amount of the buy-out sum, or the division of the mortgage debt. -
What happens to the house if we have a rental house?
If you share a rental property, it must be decided who is allowed to stay in the house. In principle, the tenant who has the rental house registered in his or her name can stay in the house, but the judge may decide otherwise if children are involved or if one of the partners needs the house more urgently. -
When should the house be sold?
The house must be sold if neither of the partners can or wants to take over the house. Also, a sale may be necessary if the bank does not agree with the takeover of the mortgage by one of the partners.
Why engage Arslan Advocaten Attorneys for the division of your marital home?
At Arslan Advocaten Attorneys we understand that the division of the marital home during a divorce can be an emotional and legally complicated process. Our lawyers focus on family law and have extensive experience in guiding clients during the divorce process. We help you to handle the division of the house in a fair and legally correct manner, so that you can move on with your life.
Do you want to know more about the division of the marital home or do you have questions about your situation? Contact us today for a no-obligation consultation.
Frequently Asked Questions
How is the ownership of the marital home determined in a divorce?
Ownership depends on the type of marriage: in community of property, both partners own the house equally; in limited community of property, only the property acquired during marriage is shared; and in marital conditions, ownership is based on specific agreements. It’s important to identify the applicable ownership rules for your situation.
What are the common options for dividing the marital home during a divorce?
The main options include one partner continuing to live in the house and buying out the other, selling the house and dividing the proceeds, or temporarily renting out the house. The best choice depends on your financial situation and preferences.
How is the value of the marital home determined for division purposes?
The value of the house is typically determined through an appraisal or market valuation to ensure a fair division of assets. This helps establish each partner’s share and facilitates negotiations or sale decisions.
What should I consider if I want to buy out my spouse’s share of the house?
You need to assess whether you can afford to buy out your spouse and if the bank is willing to transfer or refinance the mortgage in your name. It’s also advisable to get a professional valuation to determine the correct buyout amount.
