Concept for - How can I protect my properties during divorce?

Properties are often one of the most valuable assets of the family. They may house children or hold sentimental value as a result of being the family home. They could hold monetary value, they could provide an income or may be used as the matrimonial home to house the couple. This is why for many people going through or contemplating divorce protecting properties is a key aim.

Protecting properties option one – Home Rights Notice

Where the legal title of a property is held in one sole spouse’s name, this spouse will have the right to sell, transfer, dispose of and mortgage the property without the other spouse’s knowledge or consent. This of course can be worrying for the other spouse in circumstances such as divorce and separation, as they may have uncertainty about their future and where they will live.

Where the property has been occupied by a couple as the family home, it is possible for the other spouse to register their Home Rights against the property. This is because married couples have an entitlement to live in the matrimonial home (unless there is an order to the contrary). To register Home Rights requires an application to the Land Registry for a notice in their favour, which will appear on the property’s title register. The effect is that a spouse cannot be removed from the property without their consent or an order from the Court. Further, it will restrict the legal title-holding spouse from disposing of the property without the other spouse’s knowledge. The notice will also be visible to third parties seeking to purchase the property.

It is important to note however that home rights can only be applied to matrimonial properties. This means that holiday homes, buy-to-let properties, or properties other than those that the married couple occupy do not apply here.

Protecting properties option two – Unilateral Notice/Restriction 

Properties held in one spouse’s name, other than the matrimonial home, can be protected to a certain extent by registering a Unilateral Notice. This works in the same way as the Home Rights Notice by making an application to the Land Registry, but requires more detail about the other spouse’s interest in the property. Usually the fact that there are ongoing or impending divorce proceedings will provide sufficient grounds for the unilateral notice to be registered. Registering a Unilateral Notice or restriction again puts third parties on notice of the spouse’s interest in the property.

Protecting properties option three – Undertakings

Alternatively, as a spouse without a legal interest in a property of the marriage, you could seek an undertaking from your spouse via their solicitor. Undertakings are legally binding promises that can be enforced if broken. You could ask your spouse not to dispose of or mortgage the properties without your consent during the divorce proceedings. However an undertaking would not be present on the property’s title register. There is therefore a risk that prospective buyers or mortgagees will not be deterred in the same way. There is also no obligation for a spouse to give an undertaking.

The Court’s Powers

Where a spouse is going to deliberately dispose of property prior to financial settlement with the intention of defeating the other spouse’s claims on the property, the Court can take several actions. The Court can grant an injunction to prevent disposal if there is a real risk that the property is going to be disposed of. Alternatively, following disposal the Court may look to ‘add back’ the value of any losses to the marital pot by adjusting the settlement so that the wronged spouse does not suffer the loss of the property. This is only possible where there are sufficient other assets to compensate the wronged party. In some cases, the Court can however undo a property transaction if it has been done to defeat claims, however, prevention is better than cure.

It is best to discuss any potential property disposals with a solicitor from our family team if you think your spouse is preventing them from being considered as part of the overall financial settlement so that appropriate action can be taken to protect your interest in a property as soon as possible.

By using a combination of these courses of action, your interest in property can be protected pending conclusion of the financial settlement in a divorce. It is important that notices are registered at the earliest opportunity to prevent property disposal. Which method is used will depend on your personal circumstances. We therefore suggest that these issues should be addressed in the initial meeting with one of our solicitors.