In 2019, Leisha Murphy wrote about reasons why separating spouses consider delaying selling the family home. In an update, Leisha discuses important things to consider if either you or your spouse are considering a “delayed sale.”
In a delayed sale, spouses agree (as part of their separation agreement) to retain ownership of the family home until a pre-determined time in the future, at which point either of them can cause a sale. This does not mean that both spouses will continue to live in the family home, but rather that they will each maintain a one-half interest in the home and share the net sale proceeds when it is eventually sold.
If you are considering a delayed sale, below are some of the key issues you may want to think about:
1. When can the sale be triggered? Some examples include when your children reach a certain age, or three years after your separation agreement is signed.
2. How can the sale be triggered? For example, can one spouse decide or do both have to agree?
3. Can one spouse buy the other’s interest when the sale is triggered? If so, how will the purchase price be determined?
4. Who is responsible for which home-related expenses if only one spouse lives in the home between separation and the eventual sale? Examples of shared expenses might include mortgage payments, property taxes, house insurance, strata fees and major repairs, while the resident spouse might be solely responsible for costs like utilities, internet, minor repairs and maintenance.
5. Does the non-resident spouse receive any sort of compensation for his or her loss of use of the home?
If you are considering a delayed sale, you will want to think about your former spouse as a business partner, not a spouse. For that partnership to succeed, you both need to be on the same page. A detailed agreement can help ensure that your expectations are aligned and reduce the possibility of future misunderstandings between you.