Knowing what is going to happen to your family home after a divorce can be confusing and stressful. You likely have a lot of questions about what will happen with this important asset. Whether you or your spouse will keep the house depends on so many factors, including who wants it, who can pay for it, and how the assets are otherwise divided.
At Weed Law Group, PC, our California divorce attorneys help you understand what happens to your house during a California divorce, and whether you can keep the house. Speak to us today to get started.
How California Classifies the Home in Divorce
California uses a community property system in a divorce. This means that any property you acquire during the marriage is usually considered marital property. The same is true of your marital home, even if only one person is on the title.
However, not every home is community property. Courts look at:
- When the Home Was Purchased: A home bought during the marriage is usually community property.
- How the Home Was Paid For: If mortgage payments, taxes, or improvements were made using marital income, it may still be marital property.
- Whether Separate Funds Were Used: Down payments or contributions from one spouse’s premarital savings can create a separate property portion.
- Refinancing During the Marriage: Refinancing into joint names or using marital income to pay the refinanced loan can shift the home toward community property.
Because many homes are a mix of separate and community interests, California courts often apply formulas to determine each spouse’s share of equity.
Can One Spouse Keep the House?
Yes, but only if certain conditions are met. Keeping the home typically requires:
1. Buying Out the Other Spouse’s Share
If the home is community property, the spouse who wants to keep it must compensate the other spouse for their share of the equity. This can be done by:
- Paying cash
- Refinancing the mortgage and paying the buyout from loan proceeds
- Offsetting with other marital assets (retirement accounts, vehicles, investments)
Courts require the buyout to be fair and based on the home’s current market value.
2. Qualifying for a Refinance
If the home has a mortgage, the spouse keeping the house usually must refinance into their own name. This ensures:
- The other spouse is removed from the loan
- The spouse keeping the home can afford the payments independently
- The buyout amount can be funded through the refinance, if needed
If refinancing is not possible, keeping the home becomes much harder.
3. Demonstrating Financial Feasibility
Courts want to avoid setting either spouse up for financial failure. A spouse who wants to keep the home must show they can handle:
- Mortgage payments
- Property taxes
- Insurance
- Maintenance and repairs
- Any HOA dues
If the numbers don’t work, the court may order the home sold.
When the Court May Allow One Spouse to Stay Temporarily
In some cases, usually those with kids, the court might let one spouse stay in the home for a while before it is sold. This is common when:
- The custodial parent needs stability for the children
- The market is unfavorable for selling
- The spouses agree to a deferred sale arrangement
A deferred sale of home order (sometimes called a “Duke order”) allows the custodial parent to stay in the home until a specified event, such as the youngest child turning 18.
When the Court Is More Likely to Order a Sale
A sale becomes more likely when:
- Neither spouse can afford the home alone
- The equity is substantial and both spouses need their share
- The home is the only major asset available for division
- The spouses cannot agree on a buyout
- Refinancing is not possible
What Happens to the Equity?
Equity is typically divided according to each spouse’s community and separate property interests. For a community property home, this usually means a 50/50 split. For mixed-property homes, the court calculates:
- Each spouse’s separate contributions
- The community’s share of mortgage principal reduction
- The home’s appreciation during the marriage
Learn More About Keeping Your Home After a California Divorce
If you want to keep the house, there are ways to push for that end result. Knowing more about your case helps an attorney determine what is necessary to seek that result for you.
Our team at Weed Law Group, PC are ready to help with your divorce and real estate needs. Contact us today for a consultation.