The right to occupy the family home during the divorce?

In most divorce cases, the property last shared by a married couple as their home will be one of the key capital assets to be taken into consideration when sorting out the financial matters arising from the relationship breakdown. In some cases, it is the only asset and so it is hardly surprising that family lawyers are often asked the following question during their initial conversations with a client: “Do I have a right to occupy the family home whilst we sort out the divorce?”

In short, the simple answer to this question is yes – married couples are entitled to occupy their family home unless a court order has been made excluding them or restricting their entitlement to do so (otherwise known as an occupation order). The right to occupy applies regardless of whether the family home is owned in the parties’ joint names or only owned by one spouse.

In some cases, both parties will agree to continue living in the family home whilst their divorce is finalised or until the property is sold or transferred. In other cases, this may not be practical, and it may be agreed for one of them to move out, either on a temporary or permanent basis. 

In either scenario, it is important to consider whether any practical steps should be taken to protect the rights of occupation in relation to the family home, especially if the property is owned in the sole name of one spouse.  

Even though a spouse is entitled to occupy the family home owned solely by their husband or wife, they should consider applying to the Land Registry to protect their right of occupation by registering a matrimonial home rights notice.

What is a matrimonial home rights notice?

A matrimonial home rights notice is a formal notice recorded at the Land Registry against the family home. Once registered, the notice will alert any potential purchaser or lender that a non-owning spouse has a right to occupy the property. It offers the non-owning spouse a level of protection if they are worried their husband or wife may seek to evict them, unilaterally sell, transfer or otherwise deal with the property, including obtaining a re-mortgage, without consulting them first.

Once registered, the home rights notice is binding on any future purchaser or lender which means the non-owning spouse is entitled to occupy the home to the exclusion of any third party and they would then be aware that a spouse who does not own the property, has a right to occupy it.

Can the family home be sold even if a home rights notice is registered?

Whilst a registered home rights notice does not prevent the owning spouse from remortgaging, selling, or transferring the matrimonial home, the existence of the notice is likely to be highly unattractive from the point of view of a potential buyer or lender. This is because they will not wish to complete the transaction whilst the non-owner continues to have a right to occupy the property and are unlikely to agree to complete matters unless the notice is removed.

Removal of a home rights notice

A home rights notice can only be removed in limited circumstances including:

1. An application by the person with the benefit of the rights of occupation (i.e. the non-owning spouse);
2. An application by the owner provided the non-owning spouse consents in writing;
3. Upon final divorce order/decree absolute being granted in the divorce proceedings;
4. Upon the death of either spouse;
5. Removal following improper registration of the home rights notice; or
6. By court order.

What happens if we or the owning party falls behind on the mortgage payments?

If the parties are jointly named on the mortgage secured against the family home, then they shall be jointly and severally liable for repayment of the monthly mortgage repayments regardless of who is in occupation of the family home. This means that if the mortgage payments fall into arrears, the lender can seek to enforce the arrears, including seeking repossession of the property. 

If you are involved in a separation or divorce you should ensure an agreement is reached with the other party as to the interim arrangements for repayment of the mortgage, especially if one party has moved out of the jointly owned family home.  

If the family home is owned in the sole name of one party subject to a mortgage and the non-owning spouse has registered their home rights notice at the Land Registry, the lender will be required to notify the non-owner of their intentions if the mortgage falls into arrears, including giving notice of any court proceedings between themselves and the owner. 

This will allow the non-owner an opportunity to join and be a party to the court proceedings. Depending on the circumstances of the case, the lender may accept payments from the non-owning spouse. However, before doing this you should ensure an agreement is reached with your spouse as to the basis of such payments so that they can be considered as part of the overall divorce settlement.

Seek legal advice

If you are involved in or contemplating a divorce, or have recently separated and need legal advice about your position on any of the issues raised in this blog, please do get in touch, especially if the family home is owned solely by your husband or wife. If you have already registered a matrimonial home rights notice and wish to remove it, or are invited to do so, you should also seek legal advice first.  

We offer a free 15 minute telephone call to discuss your situation and to see how we can help. I am based in our Colchester office and can be contacted on 01206 217378 or [email protected].