The breakup of a couple almost always opens a conflicting scenario around what is done with the home in case of divorce, so the future of the property is also determined after the separation.
MARRIAGE CONTRACT
The marriage contract is key to resolving the housing dispute in a divorce. Its considerations set the basis for selling, renting or simply leaving the property at the mercy of one of the parties when the cohabitation comes to an end. That is why it is important to understand the following terms:
- Community property: This is the most common but the most problematic in terms of the relationship between housing and divorce. As established in the Civil Code of Puerto Rico, the husband and wife will own in half, when the marriage is dissolved, the profits or benefits obtained indistinctly by any of the spouses during the same period of marriage, so they must be distributed equally; that is to say, 50% corresponding to each one. This implies that if the couple decides to sell the house in case of divorce, the first thing to do is to decide jointly the value of sale, an aspect that can bring frictions between both spouses. The best way to solve this problem is to resort to experts in the sale of residential properties in Puerto Rico, to set the appropriate price. After the sale, each of the parties will be able to liquidate their percentage of the mortgage. If the couple decides to rent the property after the divorce, in order to pay the loan, both must remember to reflect the proportional part of the income in the income tax return.
- Separation of property: The housing process in case of divorce is much simpler. Property purchased prior to the marriage belongs only to the owner. So if one of the two partners bought a house before the marriage, it will remain his or her property only when the relationship is terminated.
- Participation regime: Implies that each spouse participates in the profits obtained during the marriage. Therefore, each will share in the profits obtained in the relationship.
SELLING THE PROPERTY BELOW ITS VALUE
One aspect to take into account is that the haste of many couples to end any kind of bond, leads many of them to sell the property below its real price. This cirscumstance originates a great damage to both parts, since the money recovered is usually less than the outstanding balance of the mortgage. Faced with these disputes, it is advisable to seek the advice of a professional in residential real estate, this will help them to know the real current market situation and determine a fair sale price, achieving both parties to disengage from the process as far as possible and get the transaction as soon as possible.
WHAT IF ONE OF THE SPOUSES WANTS THE HOUSE AFTER THE DIVORCE?
The spouse who wants to keep the property must go before a notary if there is a separation of property or co-ownership so that the notary lawyer can start the procedure of the agreement between both parties so that one party transfers the ownership of the property to the other and, therefore, allows to award the entire property to the other party. If the property was acquired in profit, the complexity is greater since the percentage identification is not available as in the other cases. However, it should be noted that, once each situation, the mortgage entity will study the economic viability of the person who keeps the property, where the banking institution will make a renewal or some change according to the conditions of the loan. It is also common for one party to keep the property by court order when there are minors.
Note: Realty Spot, we are your advisors in Real Estate, for legal fears please refer to the notary lawyer of your preference.
