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08 March 2019

Home truths

Family Law
Federal

Asked

Property settlement – Selling family home before proceedings

I am acting for a husband in a property settlement matter. There are no current legal proceedings on foot. The parties are still in the process of negotiation.

The matrimonial home is under the husband's sole name. He wishes to sell it to pay off debts and to move forward. The wife claims non-financial contribution as house-wife and mother of their daughter.

The wife and daughter still reside in the home. The husband moved out.

The husband is under financial pressure due to the mortgage, paying his own rent and child support. Can he sell the matrimonial home?

Answered

Thank you for the question.

There is nothing stopping the husband selling the house as it is in his name and no financial proceedings are on foot, however it is essential he keeps the wife informed. It is preferable that they reach agreement on the use of the proceeds of sale, which will be included as matrimonial funds in any property settlement. The husband may have made the ‘full financial contribution’, but it is not clear what that actually is. If he made an initial contribution, he ought to receive an adjustment on the basis of that contribution. However if the house was acquired during the relationship, the husband was working and the wife was the homemaker and parent, it does not automatically follow that the husband will be entitled to a greater share of the property pool just because he earnt more money throughout the relationship. Good records should be kept of the distribution of the sale proceeds. 

If the wife is not in agreement with the use of the sale proceeds then she may initiate proceedings to halt the sale or secure the proceeds until agreement is reached.

From a practical point of view, if the wife is living in the property with the daughter, unless she agrees to the sale and is co-operative, it is going to be difficult for the husband to sell the property – how will he arrange for it to be open for inspections? How will he ensure the property is not damaged and/or do any work which needs to be done to prepare the property for sale? To try and counter this, the husband could make a proposal to the wife that he pays her rent for a period of time in alternate accommodation until the property settlement is finalised. If the wife is not co-operative, then the husband will need to make an application to the court for property settlement, which will include the sale of the property. It is unlikely that the property would be sold in the interim – the court would normally leave this type of order to the final hearing and the court generally is not inclined to sell a property in the interim if the occupants have nowhere else to live. 

Regards

Mentor