1. What factors will be considered by the Court in awarding use or possession of the matrimonial home (the main residential home of a couple)?

1. What factors will be considered by the Court in awarding use or possession of the matrimonial home (the main residential home of a couple)?

That would depend very much on the family's needs, resources and all the other aforesaid factors that the Court is required to consider.

Matrimonial home is often the parties' most valuable asset.

The nature of the matrimonial home is one of the material factors to be considered.

i. Rented home

Either one party (usually the party who is responsible for looking after the daily welfare of the children) will remain in the rented home, so as to maintain status quo for the children. As to the responsibility for the payment of rent in such case, it would depend on the facts of each case.

Alternatively, where circumstances warrant, alternative accommodation will be found for both parties.

ii. Quarters provided by an employer of a spouse

If a quarter is provided by one of the parties' employer, the other party will usually have to vacate upon divorce, as he / she is no longer the spouse of the other party.

In such circumstances, the vacating party may have the right to claim for the costs of alternative accommodation from the other party, as it would be his / her substantial "needs".

iii. If the parties own their home

The Court has a wide discretion to order the transfer of matrimonial home, in whoever's name(s) it is held, by way of a property adjustment order, or payment of a lump sum necessitating its sale. The following options are opened:

1. Sale

The property can be sold by agreement.

The net sale proceeds can be split in different combination: i.e. equal shares, agreed shares or a percentage of share decided by the Court as it sees fit.

The particular circumstances of each party's contributions, needs and liabilities will dictate the amount of shares each party would be entitled to e.g. the need to re-house the children or to redeem a mortgage.

2. Transfer
 

Ownership of the property can be transferred from one party to the other either outright or upon payment of a sum of money (while the title in the property remains in the payer).

Generally, if there are children who are going to live with the wife, to maintain status quo, an attempt will be made to preserve the matrimonial home for them rather than for the husband. Of course, this is subject to the facts of each case in particular the parties' resources.

If the Court found that the value of the property being transferred is more than the wife's total entitlement to capital, then for the sake of fairness, the wife is expected to compensate the husband by paying him a lump sum equivalent to the ascertained "gain".

If the wife cannot immediately compensate her husband for the "gain", the property can be transferred into the wife's name subject to the husband's legal charge on the property (in the same way as a mortgage). In this case, the husband can maintain an interest which can be expressed as a lump sum or as a percentage share of the property. His interest can be realized at a later date.

If both parties are unable to discharge the mortgage on the matrimonial home immediately, subject to the approval of the mortgagee, the mortgage will also have to be transferred into the wife's name. In such case, the wife will be responsible for the repayment of the mortgage. If the wife does not have an independent income or stable income, the mortgagee may require the husband to guarantee the repayment of mortgage.

3. Joint ownership
 

If one party wants to reside in the matrimonial home upon divorce, where the circumstances warrant, such as the child is living there and the parties have sufficient financial resources, the matrimonial home can be retained in joint names and have it sold at a later specified date such as when the child has reached a specified age or finished his / her full-time education, whichever is the later.

Upon sale, the net sale proceeds would be divided in equal shares, agreed shares, or a percentage of shares that the Court sees fit.

Unless and until the matrimonial home is sold, the party who lives with the children would be granted exclusive occupation.

4. Where both parties have an interest in the home

There are circumstances whereby the husband is retaining an interest either in the matrimonial home or an alternative accommodation.

This is particularly so where the husband has an ongoing commitment to the repayment of mortgage.

The husband's interest can either be secured by joint ownership, or by a legal charge on the property whereby his interest can be expressed as a lump sum or as a percentage share of the property.

In either situation, the parties had to agree as to when the husband will be able to realize his interest.

The following events are usually the specified time:

• Upon the death, remarriage, or cohabitation of the wife;
• When the child or the youngest child has reached a specified age or completed his or her full-time education; or
• When both parties reached agreement for sale.

However, this type of arrangement is a viable option only if the husband is quite well-off and does not need capital immediately.

There is a risk for the wife is this option is invoked. Although the wife can enjoy exclusive occupation (with children, if any) of the matrimonial home for quite some time, she will have to accommodate herself from her share of the net sale proceeds when the matrimonial home is eventually sold (unless she has other resources).

If her share of the net sale proceeds turns out to be insufficient (to acquire another replacement property), she has no other capital or mortgage potential to resort to.

Also, one should not overlook the fact that whenever both parties have an interest in the matrimonial home, there is a potential for conflict. Thus, If possible, avoid such kind of settlement, as the parties have already suffered enough tension and antipathy upon divorce. They should avoid conflict or costly litigation again.

If it is not feasible, one should try to anticipate potential problems that would arise and make advance provision for their eventuality e.g. payment for interior or external renovation, it is reasonable for each party to contribute to such expenses in accordance with the respective percentage share in the property.