Owner-occupied home during divorce

How is the value of the home determined?

The property value forms the basis for any division.
An independent appraisal is essential, especially if one of you wishes to remain in the home.
The appraisal provides the current market value; the mortgage and any debts are subtracted from that amount to calculate the home equity.

Sometimes parties use the WOZ value (tax valuation), but this often deviates from the market.
In many cases, the court considers a recent appraisal as decisive evidence.

Options for an owner-occupied home during divorce

1. One of you remains in the home

The remaining partner buys out the other.
The buyout amount is usually half of the home equity.
The bank must agree to the change and assesses whether the income is sufficient for the new mortgage.

2. The home is sold

The home is sold through a real estate agent.
The mortgage is paid off and the home equity is shared; any residual debt is borne jointly, unless agreed otherwise.

3. Temporary joint ownership

Sometimes ex-partners agree to retain the home for the time being, for example, until children complete their schooling.
Clear agreements regarding housing costs and maintenance are then important to prevent later conflicts.

Step-by-step plan for an owner-occupied home in a divorce

1. Inventory

Note the ownership ratio, outstanding mortgage, and any savings-linked mortgages or loans.

2. Reference date & appraisal

Determine the valuation date and have the home independently appraised.

3. Choice: sale or buyout

Discuss scenarios: who will stay, what are the financial possibilities, and which bank conditions apply?

4. Formalizing

Record the agreements in a divorce settlement agreement or deed of division via the notary.

5. Execution

Arrange the transfer, deregistration at the Land Registry, adjustment of the mortgage, and settlement of home equity.

Scenarios

Consultation

Many couples arrange the home through mutual consultation, guided by their lawyers. This often prevents legal proceedings.

Mediation

A mediator helps in finding agreements regarding the home, costs, and the moment of sale. The outcome is recorded in a settlement agreement.

Legal proceedings

If consultation is unsuccessful, the court can determine who remains in the home or whether a sale must take place.

International

Is the home located in the Netherlands but one of you lives abroad? In that case, the Dutch court is usually competent and Dutch law applies (Brussels II-ter).

Practical examples

1. Buyout with refinancing
A client was able to buy out the ex-partner thanks to a new mortgage. The notary recorded this in a deed of division; the bank released the departing partner from liability.

2. Sale with residual debt
In a declining housing market, parties sold the home with residual debt. The court ruled that both bore 50% of the debt.

3. Temporary joint ownership
In a case involving young children, the parents agreed that the home would remain undivided for three years. The costs were divided proportionally until a sale was more favorable.