Tag Archive for: real estate

Your Pennsylvania Divorce: Who Gets the House?

Making the decision to get a divorce is difficult, inciting many stresses and uncertainties. It may be challenging to envision what a life without your relationship, your routine, and your home might look like. But the fact of the matter is that you may walk away from your divorce without ownership of some of your most valued assets, like your house. That’s why it’s important to know your rights and enlist the help of a divorce attorney who can guide you through the process as you divide assets between you and your spouse.

In order to move on after divorce, you and your spouse must reach an agreement on which of you will keep the house, and which of you will move elsewhere. To ensure you’re receiving all that you deserve and making the best decisions for you and your family’s future, we’ve come up with a guide to help you navigate how to decide who gets the house in your Pennsylvania divorce.

Analyze Your Assets

An important concept to understand as you navigate divorce is your assets. An asset is anything that holds real value. There are many types of divorce assets, including:

  • Real estate (marital property)
  • Liquid (cash)
  • Retirement investments
  • Personal property
  • Business (owned businesses or streams of income)

Any items acquired over the duration of your marriage could be considered assets, and the list can become long and complex. In this article, we’ll focus on the house as an asset, as it’s often one of the most significant deliberations amongst divorce mediations.

Assess Ownership

The first step in the process is to figure out who owns the house. Is the house marital property or separate property? If the house was purchased before marriage, it’s considered separate property, and that spouse may have rights to keep the house. However, if both spouses have a history of making mortgage payments (assets are commingled), both spouses have rights to ownership post-divorce. If the house was purchased during marriage, it’s marital property, which makes splitting things a bit simpler. Knowing this information will help you understand the possible next steps.

Discuss With Your Spouse

As you follow the steps for divorce in Pennsylvania, have a discussion with your spouse. Each partner should express what their goals are regarding where to live after divorce. Should you want to keep the house and your partner does not, or vice versa, you may be able to come to an agreement or a buyout without the help of an attorney. If you both want to keep the house and are unable to agree on how to go about it, the court will analyze your situation and come to a decision for you both. Think deeply about your emotional attachment to the house before you take it to the court, as this will require a lot of time and money. That said, the harder you work as a couple to sort through this, the smoother the separation process will go. 

Determine What You Can Afford

Whether you hope to keep the house or find alternative housing, you need to take a deep dive into your finances to determine the most affordable option. Your emotional attachment to the house may leave you fighting to keep it, however, your new single income may not be sufficient for staying, especially with children. Consider your individual income, child support payments, and credit health in order to decide whether or not you can afford to keep the house, or if you can afford to buy one of your own. Buying a house on a single income will likely shrink your selection of available homes compared to your combined income. Apply for a mortgage preapproval to see how much house you can afford and compare it to prices of homes in your desired area to determine if buying a home, keeping your existing one, or renting is a viable option.

Understand the Court’s Decision-Making Process

Should you decide to put your fate in the court’s hands, it’s important to know what’s taken into consideration when designating ownership. The court will take a look at each spouse’s financial situation and consider any children the couple have, along with their custody plans. Also, know that the court will always rule in the best interest of the children. If you don’t have children, the court can rule a buyout as the best option, or order that the house be sold, splitting the profits evenly between the couple. To split accurately, the court will also consider the amount paid toward the mortgage if the house is considered separate property.

It can be difficult to navigate how to handle your house during a divorce, but with the help of a reliable attorney, you can come out the other side of divorce happier than ever. Contact Karen A. Ulmer, P.C. for additional guidance centered around family law, custody agreements, and all things divorce.

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Short Sale vs Foreclosure

A short sale is an alternative to foreclosure if you have fallen behind on payments on your home. In the instance of a short sale the lender allows the home to be sold for less than what is owed on the mortgage. This is because it is usually less of a loss for the lender to allow a short sale than to let the home go into foreclosure. Foreclosure is when the lender repossesses the home due to failure to pay the mortgage. The lender often stands to lose even more money in providing for the upkeep of the home on a monthly basis and paying the taxes in a foreclosure situation. Another benefit of a short sale is that it is usually less damaging to the credit of the seller as compared to a foreclosure. A seller should try to negotiate with the lender to minimize damage to their credit rating as part of the sale agreement.

To be eligible for a short sale, the seller must be behind on payments due to financial hardship. Proof of this hardship must be established by supplying tax returns, pay stubs, bank statements and list of monthly expenses. A short sale is not likely to occur if the seller is already in bankruptcy as a short sale is considered a prohibited collection activity. The short sale process can move quickly if it is pre-approved by the lender for a certain amount. It is a good idea to work with a real estate agent or attorney to help negotiate the short sale process between the lender and potential buyer and ensure a timely sale. The short sale process can become complicated if there is more than one lender. Second mortgages or home equity lines can muddy the short sale process especially since secondary lenders stand to take the biggest loss on a short sale and all the lenders need to be in agreement with the terms for sale.

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When You Get Divorced…Actually Get Divorced

Many couples who have financial problems feel like they should still co-own assets after divorce. Maybe you are upside down on the mortgage on your home and you would lose money selling it.  Perhaps you have debt you still want to co-own or can not split for some reason.  Perhaps one of you wants out of the house but there is not enough cash to be bought out.

 

The problem with co-owning anything after your divorce is that you will no longer be married and co-ownership without that legal protection of marriage can be scary.  A good divorce attorney can help you brainstorm ways to ensure that your assets and debts are split in such a way that you each take your fair share and, most importantly, become financially independent of one another.  

 

You can learn a few things from this story:  A couple divorced after 15 years of marriage.  Upon the divorce they continued to co-own the marital home, an investment property, and a HELOC against the marital home.  With this much joint ownership after a divorce, there were bound to be problems.  


  1. They maintained the marital home and nested their children.  Each parent moved in and out according to their parenting agreement. They did this for the emotional security of their children.  However they didn’t have money to maintain the house and it fell into disrepair over the years, to the point that it could not be sold for market value.  


Lesson learned:  While nesting may seem like a great idea, it requires substantial financial resources to maintain the home for the children, particularly when neither of you are really still invested in the home.  Additionally each parent also needs a place to live when they are not with the children so you need the cash to maintain three homes.  


  1. The investment property was the primary responsibility of the ex-husband and after some time he tired of it.  He decided to sell it, forgetting it was in joint ownership.  Additionally he sold it “short sale” forgetting that the down payment was in the Heloc against the marital home.  Once it was sold he had a legal quagmire on his hands in violation of the divorce agreement and now there was no asset and yet a substantial debt to pay.  


Lesson learned:  After your divorce it is best not to jointly own any investment or debt. As former partners, it can be hard to reach an agreement on what should be done and one partner may feel they have more right to control or make decisions.  


3)  The ex-husband unexpectedly died. The HELOC was only in his name and his estate immediately went bankrupt.  Typically, debts are forgiven but since the house was securing the HELOC, the ex-wife had to start making the monthly payments or face a lien.  Furthermore, because the HELOC account was only in the ex-husband’s name, the ex-wife had no access to the account and the bank would not discuss any particulars of the loan with her.


Lesson learned:  If there is joint debt coming out of your divorce it is best to split that debt in some way and move on independently.  If you must co-own anything, ensure that, in your divorce agreement, you mandate life insurance be maintained specifically for the repayment of debt.


Divorce is not easy and many times finances are a factor in your reason to split. There is always a way around a difficult situation and we can help you creatively solve your financial issues so you can independently walk into your post divorce life.

 

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Dividing Property Outside of Divorce

A partition action is a legal proceeding to divide property amongst unmarried individuals that cannot agree what to do with the property. This may arise in a situation where two parties who were never married purchased a home together. It may also arise if real property is not properly dealt with at the time of the divorce action and the now divorced parties are still co-owners. Pennsylvania partition actions are governed by Rules 1551 – 1574 of the Rules of Civil Procedure. There are two options in a partition action. One option involves physically splitting the property, if possible. The alternative option, and more likely occurrence, involves the home being sold with the proceeds divided. As far as procedure, a complaint for partition should be brought in the county where the property is located and must include all co-tenants as parties.

The complaint must also include a description of the property along with each co-tenant’s interest in the property. Following the filing of the complaint and a court order on the partition, a court officer called a “master” is usually appointed to oversee the action. This usually includes an appraisal of the property to obtain an accurate value and setting up the sale of the property, be it private or public. The parties to the partition action are responsible for splitting all fees incurred during the partition proceeding as well as compensating the master. The parties can resolve at any time settle the matter amicably amongst themselves. Married couples should be sure to deal with real property issues at the time of divorce to avoid the potential for this additional proceeding down the road.

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Partition of Real Property

A partition action is a legal proceeding to divide property amongst unmarried individuals that cannot agree what to do with the property. Pennsylvania partition actions are governed by Rules 1551 – 1574 of the Rules of Civil Procedure. There are generally only two options in a partition action. The parties can physically split the property, if possible. This is rarely a feasible option, particularly in the case of property with a structure on it, such as a home. Alternatively, the property is sold and the proceeds are divided. As far as procedure, a complaint for partition should be brought in the county where the property is located and must include all co-tenants as parties. The complaint must include a description of the property along with each co-tenant’s interest in the property.

Following the filing of the complaint and a court order on the partition, a master is appointed to the case. The master will set up an appraisal of the property to obtain an accurate value. Subsequently, the master will arrange for the sale of the property, be it private or public. The parties to the partition action are responsible for splitting all fees incurred during the partition proceeding including compensating the master. The parties do have the opportunity to resolve the partition action at any time and settle the matter amicably amongst themselves.

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Divorce and When to get the House Appraised

If you are getting divorced and own a home, the value of the home is considered for purposes of equitable distribution. If the home was owned by you prior to the marriage and remained in your name alone, the increase in value of the home from the date of the marriage until the date of separation is considered marital. In this case, you should get two appraisals done on your house, one from the date of the marriage and one as of the date of separation.

If you received the home as an inheritance, you will need the values of the home as of the date of gift to you and as of the date of separation if you kept the home in separate names. Since inherited assets are non-marital, as long as they are kept separate, only the increase in value of the asset from the date received to the date of separation is considered. You again will need two appraisals to reflect these dates.

If, however, you own a home that was purchased during the marriage, you will want to delay getting the house appraised until you are either ready to sign an agreement or go to a divorce hearing. In Pennsylvania, the Court values the home as of the date of distribution so by getting an appraisal close to the date of your divorce hearing gives the most accurate value. If you get the house appraised too early, you may end up having to pay to have it appraised again.

If you own a home that was premarital or inherited, but you added your spouse’s name to the deed, you will want to get an appraisal at the time you married or received the asset, at the time you gifted it to the marriage and at the time of distribution.

When you get your house appraised, you may want to also consider whether you need to also get a fair rental value of the house included in the appraisal. If the house has no mortgage or a very low mortgage and you are not living in the house, you should get the fair rental of the house established in your appraisal so that you can make a claim for this value in equitable distribution.

It is also important to remember that you do not need an appraisal done if both you and your spouse are able to agree to the value of the home. You may also want to use a Comparative Sales Analysis in an effort to come to an agreed price.

If you are having trouble getting access to the home to have it appraised, there are remedies and you can file Special Relief with the Court in divorce in order to gain access for purposes of an appraisal. In that instance, you should consult with an attorney.

For more information see:/Family-Law-Divorce/Division-of-Marital-Property/

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Splitting Real Estate Outside of a Divorce

A Partition Action is the type of legal proceeding needed to divide property amongst unmarried individuals that cannot agree what to do with the property. There are two options in a partition action. One option involves physically splitting the property, if possible. The alternative option, and more likely occurrence, involves the home being sold with the proceeds divided. As far as procedure, a complaint for partition should be brought in the county where the property is located and must include all co-tenants as parties. The complaint must also include a description of the property along with each co-tenant’s interest in the property.

Following the filing of the complaint and a court order on the partition, a court officer called a “master” is usually appointed to oversee the action. This usually includes an appraisal of the property to obtain an accurate value and setting up the sale of the property, be it private or public. The parties to the partition action are responsible for splitting all fees incurred during the partition proceeding as well as compensating the master. The parties can resolve at any time to settle the matter amicably amongst themselves.

Click here to read about division of marital property.

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