We’ve split up: now what next?
Q: My partner and I have split up after 15 years. We bought our home together five years ago and still have a sizeable mortgage. At the moment, he is staying in the house with our kids and I have moved out. He is keen to stay to make things easier for the children and I agree this is probably a good idea. But we are not sure how to do this, not least because the market is running hot where we live. Things are fairly tense anyway and we need some advice.
A: The end of a relationship is tough on everyone involved. Some couples find it hard enough to divide up their furniture, let alone any joint property. Without wanting to scare you, it’s a really good idea to get legal advice on your rights and responsibilities when it comes to your home.
If you’re not keen to engage a lawyer just yet, your community law centre or Citizens Advice Bureau can be a good place to start. The Ministry of Justice and Community Law also have some useful information online.
You might not feel like presenting a united front, but it will make things a lot easier if you can reach agreement on the next steps. While every situation is different, most separating couples either jointly sell the home or one of them decides to ‘‘buy out’’ the other.
Sometimes they reach an agreement where they continue to co-own the property but just one of them will live in it.
If you both decide to put the property up for sale, any proceeds will be split. Ideally, this will enable you both to clear your share of the joint mortgage and help you start again separately.
If you decide selling is the best option, find a real estate agent you are both comfortable with.
Think about this from the real estate agent’s perspective – even the happiest couples can disagree about how to sell a property, so things can get very tricky for the real estate agent when they are dealing with a couple who don’t want to be together.
The agent you choose has to represent both of you fairly. They must get agreement from both of you (as joint owners) before taking any action. If you can, meet several agents to find one you can both work with.
Ask them to provide you both with a current market appraisal, to give you an indication of the estimated price range your property is in, and present a marketing plan. Remember, too, that while you might want to make life hard for your ex at times, it’s not very smart to do anything that will jeopardise a smooth and successful sale.
The faster you can sell your property, and the greater the price you get for it, the sooner you can move on.
If you decide that your partner is going to stay in the house and you will buy him out, it’s a good idea to get the property valued.
As discussed in previous columns, you can get an idea from online valuations that take into account other sales in your area, but a valuer will provide you with a more detailed appraisal. This will come at a cost, but you may decide it is worth it for the peace of mind. It may also be useful when you are talking to a lender, as a registered valuation can sometimes be required if you are refinancing.
Whatever you agree to do with the property, you both need independent legal advice – and a written agreement that sets out your separate rights and responsibilities.
This protects all parties and stops one partner from lodging a caveat or notice of claim that will prevent the sale of a property. It may also be helpful when applying for finance, as lenders may be wary of unresolved relationship property issues.
It’s always difficult to set your emotions to one side in a property transaction, especially when it involves such high stakes. Keep focused on the end goal and be kind.
❚ Kevin Lampen-Smith is the chief executive of the Real Estate Agents Authority (REAA), the independent government agency that regulates the New Zealand real estate industry. If you have a question about buying or selling property, send it to susan.edmunds@fairfaxmedia.co.nz. For independent advice on buying or selling property, check out www.reaa.govt.nz.