Selling the family home upon separation (part 1)

Upon separation challenges can arise when trying to reach an agreement to sell jointly owned property. Disagreements about the sale price, method of sale, and the valuation of the property can occur.

A common reason for this could be that one party who is in a stronger financial position can afford to hold out on a sale. The other party may be looking to get a higher price or a fast sale. This can lead to the situation becoming drawn out and unfair when one party begins to act unreasonably.

When dividing up the property, there are two main options available to the parties. They can either choose to buy the other party out, or place the property on the open market.

Option One: Buying the other party out

This can be when one party wants to remain living in the family home or wants to hold onto the property. One party would therefore purchase the share of the other party and it can be a relatively cost and time effective option. Property is then transferred privately between the parties with the assistance of lawyers, usually after a relationship property agreement is signed.

It is important at this stage to get the property valued by a registered valuer. A detailed appraisal can be provided and ensures both parties are aware of the current market value.  As the sale is inter-party, the price can be reduced below market value provided both parties agree.

Option Two: Placing the property on the market for sale

If the home is jointly owned, parties can agree to place the home on the open market for sale. The proceeds of the sale can be split between the parties accordingly. This usually occurs when both parties either cannot afford to buy the other party’s interest or neither party wants to retain the property.

Challenges can arise at this stage when the parties’ interests begin to diverge. Finding a real estate agent that can effectively meet both parties’ needs is beneficial.

Ensuring both parties are sufficiently provided for moving forward is important. Understanding how to troubleshoot issues that may arise will help achieve this outcome.

In part 2, the potential issues that can arise from each option, and how they may be handled, are explained.  

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.

Please note that Rainey Collins is not contracted to provide Legal Aid, other than in the Treaty of Waitangi area.  We therefore are unable to take on any Civil or Family Legal Aid work. If you require Legal Aid in those areas, you can search the list of Legal Aid lawyers on the Ministry of Justice website.