How to divide a property during a divorce
A divorce between a couple, not only terminates the legal relationship between the couple, but it also requires that the property that is shared by the spouses be divided. Upon divorce, the couple is required to decide what they want to do with their property. The couple may be holding the property jointly, or it may be in the name of one of the spouses.
When the property is held jointly
If the property is held jointly by the spouse, then, it can be divided on the basis of their individual equity. To fairly arrive at the individual stakes, you can get the property assessed, on the basis of the market value of the property. Also, when a spouse is holding the title of the property jointly, they are required to do the requisite paperwork and transfer the property, in the name of one person.
These are the following options available if the property is held jointly:
- Sell the property: Sell the property and share the proceeds based on individual equity. If there is an outstanding loan on the property, then, pay off the loan and divide the proceeds as per your share.
- One spouse can retain the house: If one of the spouse plans to keep the house, then, s/he can buyout the other person’s share on the basis of market value. Accordingly, changes should be made on paper and transfer of the title to one person should be made.
- The house remains a joint property: A couple may decide to hold on to the property, to minimise the tax implication or take advantage of appreciation in the property’s value. In this case, it is important that you define the liabilities and claims properly, in the separation agreement.
Dividing a property is lot easier, in the case of a mutual divorce. In such scenarios, the spouse can decide together, as to how they want to dispose of the property.
When the title of the property is in the name of the husband
As per the current laws, a woman seeking divorce is not entitled to any share in the husband’s property. As per the current regime, the ownership of the house rests with the person, who is holding the title. For instance, if the title of the property is in the name of the husband and both, the wife and the husband bought it together, then, the wife will have to prove her claim and the same will be settled by the court.
When the title of the property is in the name of the wife
On the other hand, when men buy property with their money and register it in the names of their wives, to avail of the benefit of lower registration fees, in such scenarios, the wife can continue to retain the ownership of the house.
Only when a person is able to prove in court that he has funded the property purchase, will he be entitled to a share in the property, even though the title may be in the name of the other person. In a smooth divorce, one can divide the property through mutual consent, or based on individual contribution or ownership.
Credits- Taken from Housing.com Blog with the same Heading.