Separation and divorce can present complex issues and messy situations. Besides the obvious emotional impacts, there are also many practical aspects which need to be considered. These include specific arrangements regarding the home that a couple shares. Whether it is rented or owned, in both your names or in one of your names, you may still have rights to live there. Even if you do not own the house or won’t be taking care of the children, you may still have these rights.
Who moves out?
This question is often raised when a relationship has deteriorated to the point where the couple can no longer live under the same roof.
For couples with children, the answer can be a practical one: the one who looks after the children stays, as the children would likely stay.
In times past, it was common that the father was the breadwinner of the family and the mother was expected to stay at home to look after the children When disputes arose and the parents decided to separate, the father would usually be the one moving out because he could afford to do so.
However, nowadays it is common for both parents to have full time jobs. Often, they are assisted by helpers who help look after their children. Both parents spend an equal amount of time with their children and the children are equally attached to them. It would be painful for the children if either parent moved out and the exiting parent was deprived of his or her time with the children.
If the access arrangements of the children cannot be resolved between the parents and it must be determined by the Court, the Court will decide upon reviewing the report of a Social Welfare Officer and/or a Clinical Psychologist. Pending such recommendations, the Court will make an interim order upon reviewing the individual circumstances of the parents. The decision will be solely based on the best interest of the children.
Social Welfare Officers will conduct extensive interviews with the children and the people who are involved in the children’s lives. These people can include other family members, the respective parents who may take part in looking after the children, teachers and helpers. The interviews will be completed before a recommendation is put forward.
Hence, it is important for couples who contemplate divorce to seek legal advice before deciding their next move as it may have a huge effect on future nesting arrangements.
Joint ownership and the law
Whenever a house is owned or rented in both names, both parties have an equal legal right to live in the marital home. Financial arrangements on divorce can include; details of whether the person who remains should buy the others’ share; whether the house will be sold with the proceeds split; or as is often the case, if the person with whom the children reside should be allowed to stay in the property until the children have grown up and leave home, at which point it will be sold and the profits divided.
If the family home is rented in joint names the exiting party may wish to cease his or her responsibility for the rent of the family home, as they would have to arrange and pay for their own accommodation. The expenses of the family may increase substantially, especially in a city like Hong Kong with high accommodation costs. Future arrangements may become an issue when the remaining party relies on the exiting party to pay the rent and the exiting party claims that he or she can no longer afford to maintain the family home, with the increased expenses on housing without any increase in income.
If the couples cannot come to a solution on financial support and it must be resolved by Court proceedings, the Court will look at the financial statements filed by the parties (Form E). This sets out in detail the parties’ assets, liabilities, incomes and expenses, before determining on the level of financial support that one party may have to give to another. The whole process could take years to resolve and the Court may make interim orders pending a final decision. Such orders can be made on a “broad brush” approach, meaning that one party may suffer in the course of the long and complex legal battle.
Access to marital home during separation
When the home is in one persons’ name only, the other party may still be entitled to stay even if the owner disagrees. If the couple are married the spouse, not named as the owner, still has a right to stay in the home and “occupy” it. The legal owner cannot sell it without giving vacant possession of the property to the purchaser upon completion. With a soon to be ex-spouse refusing to move out, the legal owner simply cannot sell until the end of the divorce proceedings.
Split of a matrimonial home
The property will form part of the matrimonial assets that are divided upon divorce, this will be determined by the Court. The remaining party may buy out the title owner and allot the time at which the home can be sold. Once sold, the proceeds would be split among the parties.
In Hong Kong the most common cases are joint tenants with equal shares and a mortgage. The couple own equal shares in the property and so 50/50 would be the starting point for any negotiation, irrespective of who has been responsible for servicing the mortgage throughout the relationship.
It is worth noting that, just because a couple have equal shares this does not mean that the final negotiation of splitting assets will entitle an equal share of any profits. It is simply part of the matrimonial pot of assets to be divided and discussed, which also includes bank balances, investments, savings, MPF and other pension schemes.
Right to occupy the family home
If you are married and your spouse owns the family home in their sole name you may be entitled to a share of the equity, even though your name is not on the deeds. At the very least, you will have matrimonial home rights in the property. This means that you can occupy the property without any challenge.
If you are not married to your partner and you do not own the property in joint names, you may be concerned about whether you can stay there if your relationship breaks down. It very much depends on the financial arrangement between yourself and your partner and whether you can claim a beneficial interest in the property. Private Client lawyers have extensive experience in dealing with Wealth and Estate Planning matters, so you should be allowing them to evaluate your specific circumstances and let them advise you on the best legal solutions.
Risk of the property being sold without consent
If you are worried that your spouse may be trying to sell the property in which you no longer live, you should treat this situation with extreme urgency. It is particularly pressing if you know that the property is registered in your spouse’s sole name or in the name of a third party, such as a holding company or Trust that your partner may have interest in. The property in this case may not necessarily be your family home, it could even be an investment property or holiday home. To prevent your spouse from dealing with the property you may need a restriction, which must be entered with the Land Registry. This will ensure that your written consent must be obtained before your spouse or anyone else sells the property, or otherwise tries to dispose of it. You may also consider seeking an undertaking from your spouse, restricting them of disposing of the property without your consent. Alternatively, an application can be made to Court for urgent injunctive relief under s17 Matrimonial Proceedings and Property Ordinance.
Once you have reached an agreement with your spouse or partner that the property is to be sold any matrimonial home rights, restrictions or notices will need to be removed from the Land Register to allow the transaction to proceed.
Our team at Hugill & Ip has extensive experience in dealing with Private Client and Family issues in Hong Kong – please get in touch with us to find out how we can help.
This article is for information purposes only. Its contents do not constitute legal advice and readers should not regard this article as a substitute for detailed advice in individual instances.