Couples struggling to divorce due to joint mortgages

Published: 27/04/2015

The Debt Advisory Centre has recently published research which showed that two-thirds of couples felt unable to ‘break free’ from a partner because of their joint financial arrangements or debts. Head of Property Lynne McCaffrey considers this research and the role of conveyancers at property purchase in establishing the basis for property ownership.

“The research from the Debt Advisory Centre makes fascinating reading. Of those participating, 25% had a joint mortgage in place. Often divorcing couples have to move out of their home as neither can take on the mortgage independently and sometimes couples have to remain living under the same roof – in the research 6% of the sample reported that was the case.

“Separation and divorce are highly traumatic life events. In addition to the emotional pain there is often a great deal of stress caused by finance. Sometimes an already difficult situation can become impossible due to the acrimony that comes when trying to unravel joint finances. However, with a bit of forward planning some of that can be avoided.

“One area we focus on when we handle conveyancing for all our clients, whether married or not, is the legal basis for their ownership of the property. We believe that it’s part of our job to ensure the client’s interests are protected by highlighting and addressing this issue.

“It’s fundamental that homeowners hold their property in the best way for their individual circumstances and paying attention to this at property purchase can avoid potentially complex legal situations further down the line. There are two ways couples (whether married or not) can jointly own property – as Joint Tenants or as Tenants in Common. The way in which the property is co-owned may have implications for couples who separate.

“Joint Tenants each hold an equal interest in a property and, if one party dies their share of the property automatically passes to the remaining co-owner(s) without the need for Probate. If the property is held as a Joint Tenancy then either party can independently sever the Joint Tenancy agreement without the consent of the other(s). If this happens then the property is automatically held as Tenants in Common.

Tenants in Common each own a specific share of the property and these shares can be split as determined by circumstances. If the property was ever sold then each co-owner would receive the monetary equivalent of their share. Those who have made unequal contributions to the deposit and / or repayments and those couples in second marriages are advised to hold their property as Tenants in Common.”

To find out more about Owning Property Together click here

Content correct at time of publication