Lawyers rarely give straight answers to anything. Years of legal training has taught us that the appropriate answer to almost every legal question is three words: “Maybe. It depends!” My answer to the question, “Is it wise to own property with my ex post-divorce?” is also three words: “Are you crazy?!”
Why Owning Property With Your Ex is a Horrible Idea
Trying to protect a client who insists on owning property with her ex after her divorce is the kind of issue that keeps lawyers up at night. (I know. I’ve had clients who have done exactly that.) While everything could turn out fine, the potential problems that can arise are heart-stopping!
Lets say a divorcing couple owns a home together. They either can’t, or don’t want to, sell it. Neither one can afford to buy the other one out. So they decide to continue to own the house together until their children graduate from school, or until the housing market improves. They also decide that the wife and the kids get to live in the house, and that each of them will pay one half of the mortgage, taxes and insurance until the house has been sold. Finally they agree to split the proceeds 50/50 when the house sells.
That covers everything, right?
The Unforeseen Complications
What this couple might not have thought about are those unforeseen expenses that inevitably crop up when you own property. What happens when the roof leaks? What happens when the garage door breaks? What if the wife accidentally backed into the garage door, and that is why it broke. Does the husband still have to pay a portion of the repairs?
Got the repair issue figured out? What about routine maintenance? Who pays the plumber to unclog the toilet when one of the kids accidentally flushes a toy in it? What if the wife wants to get new carpeting because the cat threw up on it one too many times and it is disgusting, but the husband (who doesn’t live there) thinks the carpeting is fine?
What happens if one of the spouses loses his/her job and can’t pay any portion of the mortgage, taxes and utilities? If the other spouse can’t make up the difference and the mortgage doesn’t get paid, both spouses’ credit will get screwed up, even though the spouse who didn’t lose his/her job did nothing wrong. If the employed spouse does pay the whole bill, when and how does s/he get reimbursed?
Not convinced there is a problem yet? Who decides if and when the house gets sold? Who decides the sale price? What if the house doesn’t sell right away? Who decides whether to lower the listing price? What if the two parties don’t agree? What if the house gets sold for less than what the husband and wife owe? What if one of them can’t come up with the cash to close, but the other one can? What if one person goes bankrupt before the house sells?
Now you can see why this is a lawyer’s nightmare. Obviously, not all of these horrible things are going to happen. The problem is, you never know which one will (or won’t) happen, so you have to try to cover your bases about all of them.
What to Do When You Have No Choice
By now you have probably realized that continuing to own property with your ex after your divorce is a bad idea. But, what if you have to do it anyway? What if you have no choice?
Step one is to brainstorm everything that could possibly go wrong. (Now you know why divorce lawyers are so pessimistic. This is what we do all day long!) Write down every problem you could have, then sit down with your spouse and try to figure out how you will handle each situation. If you can’t talk to your spouse about this, use a mediator. If all else fails, your lawyers can negotiate these details, but that will definitely cost you!
Step two is to write down, in as much detail as possible, everything you and your spouse just agreed to do. Write down exactly what each of you will pay for. Write down exactly what each one of you is responsible for (i.e. who actually performs the routine maintenance, or hires the plumber.) Give that writing to your lawyers and make sure it is included in your final divorce judgment.
Step three is to accept that no matter how well you have completed steps one and two, situations could arise that you never thought about. It is therefore wise to maintain a decent relationship with your ex, at least for as long as you own property together. That way, if something unexpected happens with your joint property, you should be able to work the problem out without having to go back to divorce court.
What if What You Want to Own Together Isn’t Your Home?
While I used the example of a home to make this article a little more concrete, similar issues arise no matter what you and your spouse want to continue to own together after your divorce. It doesn’t matter if you want to continue to jointly own a vacation home, a timeshare, a business, a car, or the family dog. Any joint ownership carries potential problems. Any joint ownership is a bad idea. Any joint ownership keeps you tied to your ex indefinitely.
The Best Solution
Nothing is better than a clean break. In a perfect world, after your divorce, neither you nor your spouse will own any property, or have any debts, together. If you can do that, not only will you sleep better at night, but your divorce lawyer will too.
FAQs About Owning A House With Your Ex:
Is owning a house with your ex a good idea?
Owning a house with your ex after divorce is not a good idea because it can throw up several issues. From paying for maintenance and mortgage to selling it at a later stage, it all becomes a complicated affair. Are you ready for another bout of litigation over it?
Why do some people own a house with their exes?
Some people opt for owning a house with their exes instead of selling it because they want to wait until their children graduate or the market improves. They agree to pay half of the mortgage, taxes and insurance until they could sell it and split the proceeds fifty-fifty. Mostly women and children get to stay in the family house under such deals.
What is the harm in owning a house with your ex?
Even if you were to decide who gets to pay what while owning the house jointly with your ex, there are always unexpected expenses. Such expenses become the reason for dispute between the parties. Your ex husband may not be willing to pay for the rug, which needs immediate replacement or the plumber badly needed to unclog the toilet.
What happens to my credit if my ex fails to pay the mortgage of our house?
You and your ex will both have your credit screwed up if one of you failed to pay the mortgage of the house you guys jointly owned. This happens when one of the ex spouses loses his or her job. How do you know when you would get your money reimbursed in case you paid for your exes share of the mortgage?
Will I be able to sell the house later If I owned it with my ex now?
You may be able to sell the house later if you are planning to own it with your ex, but do remember that there is many a slip between the cup and the lip. Will your ex want to sell the house when you decide to do so? Who decides what is a good price and what if it doesn’t sell right away? Would you both be willing to sell it at a lower price if it doesn’t sell as quickly as you want? And what if the house gets sold less than what you guys jointly owe? What will be your plan of action if one of you doesn’t have the cash to close a deal?
Is it a good idea to own a business with my ex?
You will end up having trouble if you own a business or a house with your ex after divorce because any joint ownership has its own potential issues. Besides, it will keep you tied to your ex until you decide to sell it.
Related Articles:
- The Hard Decision To Leave The Marital Home
- 8 Tips For Dumping The Marital Home After Divorce
- The Marital Home: Is Home Still Sweet After Divorce?
- In-House Marital Separation: When Finances Force You To Stay
I would have loved a clean break from all assets post divorce, but it wasn’t possible for me to buy him out of the house. We decided to disproportionately distribute the retirement (he got slightly more) to offset the money we put into the house. It is clearly stated in the decree that the house is mine, as well as any gains in the market should I sell. The stipulation was that I was to refinance in my own name by the end of my alimony. I am in the process now of refinancing in my own name and all he needs to do is to sign a quit claim, removing his name from the deed. Fingers crossed it all goes well. Having property in both our names was not the ideal, but a temporary solution at the time with very clear boundaries.
That’s the problem: sometimes a clean break isn’t possible! It sounds like at least you had the good sense to set clear boundaries and put everything in writing. I hope everything goes well for you with the refinance and the quit claim!
I was dating a single mom (three kids) who financed a mortgage for a new home with her ex AFTER the divorce. How could they have made an agreement with terms to protect her AFTER the divorce is already finalized?! How could this arrangement have affected my life as a potential suitor? Wouldn’t he have unfettered acces to ‘his home’ while we were dating? Am I crazy here?