Selling Property Before Divorce in the UK: What You Need to Know

Can You Sell Property Before a Divorce Settlement?

Yes, it is possible to sell a property before achieving a divorce settlement yet various points need consideration during this process. You can only sell property through mutual agreement between both spouses or through a court order. Both parties who are named on the title deed require an agreement for a sale unless a court intervenes to establish different arrangements.

A spouse who does not hold ownership of the property may still claim marital home rights unless both parties agree to the property sale or the court provides different instructions.

Legal Considerations

1. Ownership & Consent

• Both title holders of a jointly owned property need to mutually agree before selling the property.
• A spouse who owns property gains potential legal power over the property when it is used as a family residence.
• A court will make decisions about the fate of disputed property ownership either for sale or keeping the property.

2. Court Intervention

• The Matrimonial Causes Act 1973 allows a spouse seeking to force a sale of joint property to obtain a Property Adjustment Order or Order for Sale.
• The judge will assess financial requirements, childcare needs and housing demands when making decisions.

3. Matrimonial Home Rights

• Living with the legal owner within a property could grant you home rights protection under the Family Law Act 1996.
• The process of Land Registry registration ensures sellers need your approval to purchase the property.

4. Financial Settlement & Assets Division

• Property sales before monetary division can shape the distribution of proceeds obtained from the sale.
• Proceeds will be placed into a specific account to wait for a financial agreement following court approval.

Pros and Cons of Selling Before Divorce Settlement

Pros

• Selling a property reduces the financial burden created by high mortgage payments or substantial maintenance costs.
• The speed of finding new housing becomes possible through an early sale between both parties.
• The property market volatility makes early house sales advantageous for price improvement.

Cons

• Property division becomes more complicated since there will be confusion regarding the distribution of proceeds.
• A challenge from one spouse regarding the property sale can trigger court reimbursement processes.
• The tax office might apply Capital Gains Tax (CGT) to properties that don’t qualify as your home residence.