Divorce and separation when selling a home in Edmonton, Alberta

Even the divorces and breakups that start out amicable can eventually turn sideways — if not completely inside out — despite well-intentioned efforts to remain civil. Regardless of who was wronged, who was innocent, how the blame is divided, or whether the union simply drifted apart, it’s a death of a relationship, a time to mourn. It’s also a time of rebirth and a new life.

If you are a couple going through a separation, you’ll likely need to make a number of decisions about your Real Estate assets.

The following checklists will help you organize yourself and your thoughts as you begin the separation / divorce process. You may want to use them to sit down with your spouse or partner when they are ready to begin discussing these issues. Others may use them to prepare to start a court proceeding.

You’ll also want to get legal advice, either to help you and your partner make a separation agreement, or to help you through a court proceeding, if necessary.

At RM|a, we’re experienced negotiators AND mediators. Acting as representation for several family law firms and their clients in Edmonton, we’ve come to develop a strong skill set in “family real estate” matters. We’re focused on delivering exceptional results for our clients – no matter what their personal circumstances and challenges are.

Separating couples typically choose one (or a combination) of the following:

• The house is placed on the market and sold
• One person “buys out” the other person’s share of the house
• One person is permitted to remain living in the house for a specified period of time

Sale of the home

• How much is the home worth? If you cannot agree on this, you will need to find a way to determine this amount. Some hire a qualified real estate appraiser together; others hire their own and take the average of the two appraisals. Some use the opinion of value from a qualified real estate agent, as opposed to an appraiser, which usually costs less. Some do their own research in newspapers and through the Internet to arrive at their best estimate as to value. Contact us for an evaluation of your property if you are considering this option.
• Do any repairs have to be made, and if so, who will be responsible for arranging for the repairs and how will the cost be shared?
• When is the most desirable time to sell, considering when the mortgage is due renewal, the season, school year, and various market conditions?
• Who will have the right to live in the home until it sells?
• Who will be responsible for paying the mortgage, insurance, realty taxes, utility payments and any other operating expenses before the sale?
• Which real estate lawyer will you choose to act for you on the sale?
• Will the lawyer’s fees be shared by you equally and paid out of the sale proceeds?
• If there is a mortgage, will there be any prepayment penalty? Can the mortgage be transferred without penalty to a new home that one of you may purchase?
• What debts and encumbrances, such as the mortgage, will be paid out of the money that you receive for the house? For example, will debts such as credit card balances, lines of credit, and student loans be paid?
• Are there any overdue realty taxes, writs or liens that will have to be paid at the time of sale?
• Should the equity be split equally? This is a complex question requiring legal advice, and may be affected by such things as a debt registered against the property that is solely the responsibility of one spouse; a debt owed from one spouse to the other; transfer of all or a portion of one person’s share of the equity to the other in exchange for settlement of other assets or debts; or child or spousal support obligations.

Buying out the other spouse’s interest

• Can one person afford the costs associated with running the home?
• Does it make sense that one person, as opposed to the other, remain in the home?
• After determining the value of the home, how much equity is left after deducting mortgages, tax arrears and any other debts registered against the home?
• When will the spouse receive his or her money?
• When will the transfer from one person to the other occur?
• Will the person who is buying out the other’s share have to refinance the existing mortgage, or will the bank or lender allow the other person to be released from his or her obligations under the existing mortgage?
• Who will pay for the costs associated with the transfer of the home from one person to the other, and any costs associated with arranging a new mortgage?

Right to live in the house

• Could one person continue to live in the home for a certain period of time? For example, until children have graduated from high school, or until he or she has other housing, or has retrained to become financially independent.
• What will happen at the end of the time period? For example, will the house be sold or will one person be given the option of buying out the other’s share at that time?
• Will the spouse who leaves the house be allowed to re-enter the house for any reason during that time period, and if so, for what reasons?
• Allowing one person to remain in the house is a benefit. What will the other person receive in return? Will allowing a person to remain in the house offset, for example, an obligation to provide child or spousal support?
• If any repairs have to be made, who will be responsible for arranging for the repairs and how will the cost be shared?
• Who will be responsible for paying the mortgage, insurance, realty taxes, utility payments and any other operating expenses?
• If only one person pays the mortgage payments and taxes, will this affect the sharing of the equity when the house finally sells or is purchased by the other spouse?

Checklist for other Real Estate

Vacant land, cottage, time-share condos

• In whose name is the property registered?
• What is the property worth?
• Are there any mortgages, liens or encumbrances registered against the property?
• Are there outstanding realty taxes or membership fees?
• If the property is owned by both of you, will it be sold or will one person transfer his or her interest in the property to the other?
• If the property is being transferred from one to the other, will any money be paid, or will there be an exchange for some other property or some other benefit?
• If it is a time-share condominium or agreement, will you sell your interest? If you are not able to sell it, how will you share it?