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It is not uncommon for married couples to own property together. Often, the family home is your largest asset. Many couples end up selling shared property and splitting the proceeds as part of their property division agreement. However, this is not always the case, and you may find yourself still co-owning property with your ex post-divorce.
There are several reasons why a couple may continue to own property together post-divorce. Co-owning property after divorcing is especially common when a couple has children and one spouse remains in the family home with the children. Another common scenario is that one person wants to keep the house but can't afford to buy the other person out. When this happens, they may both agree to continue co-owning the house while one spouse takes over responsibility for the mortgage payments.
When Is the Best Time to Sell Our Property?
Deciding when to sell a co-owned property can be tricky. Every case will be different, and it will depend on several factors, including your divorce settlement, the housing market, and your financial needs. Some people decide to hang on to property after a divorce because they don't want to take a loss on their investment. If the housing market is weak at the time of the divorce, it often makes more sense for a couple to hold onto the property for a few years.
There are also several risks associated with co-owning property after a divorce. Keep reading to learn what these risks are.
Risk of Forced Sale
If you co-own a home with your ex and they fall on hard times, your home could be subject to a forced sale. This can happen when someone is sued by their creditors or when they file for bankruptcy. Because they still share ownership of the home with you, the house could be seized and sold as a means to pay back creditors. If you are concerned about your ex's ability to remain financially stable, you might want to rethink co-ownership with them.
The Mortgage Will Show Up on Both of Your Credit Reports
Another risk that it is important to be aware of is that your co-owned property's mortgage will show up on both of your credit reports. Before agreeing to co-own property after a divorce, the impact it may have on your credit should be taken into consideration, especially if you are not the one responsible for making mortgage payments. Should your former spouse make late payments or miss payments, it can negatively affect your credit score.
You Will Have to Work Together to Ensure Expenses Are Covered
After a divorce, working together with your ex may be the last thing you want to do. However, if you still co-own a home with them, you will have to remain in touch, and you will have to work collaboratively to ensure that the house is maintained and all expenses are covered. You will also have to work together when it comes time to sell the house. Before deciding whether you will continue to own property jointly, you should seriously consider how emotionally and mentally prepared you are to maintain a working relationship with your former spouse.
One or Both of You May Change Your Mind
What seems like a good idea initially may not seem so great a year or two down the road. You may have been fine with co-owning property with your ex at first, but over time you or they may decide that you no longer want to be tied to the property. Additionally, over time, people's financial lives can change, and you may find yourself in a situation where you or your spouse needs to sell the house while the other doesn't want to.
These situations can create conflict and can be difficult to resolve. While your divorce settlement may stipulate when and under what conditions the property can be sold, this does not always mean that the process will go smoothly.
If you and your spouse own a home or other property together and you are going through a divorce, you should speak with your attorney about how that shared property will be handled. A skilled attorney can use their knowledge and experience to help you make the right decision for you and your family.