Divorce and the family home

8th May 2019 Family Law

New outlets reported a somewhat bizarre case involving millionaire banker, Kerim Derhalli, and his ex-wife, Jayne Richardson Derhalli. It appears that Mr and Mrs Derhalli settled the financial aspects of their divorce some years ago. Part of the deal seems to have involved selling the former matrimonial home a substantial property in Kensington, West London. The property, which was in Mr Derhalli’s sole name, remained unsold at the original asking price of £8m for some time and Mr Derhalli requested that Mrs Derhalli make alternative arrangements and leave the property. She refused and Mr Derhalli has now succeeded at the first stage of suing her in the county court for “back rent„ in respect of her use and enjoyment of the property. It has since sold for £6m and there is to be a further hearing to assess just how much she should pay him.

This is very unusual and one party threatening to sue another for “rent„ seldom arises, let alone achieving a county court judgment against them. However, family lawyers encounter a whole host of different problems that can arise in relation to the family home.

We can’t afford to keep it..

Financial disputes on divorce can take years to sort out if complex issues arise or if negotiations take place in an on again off again way. This can really take its toll if a couple owns a home at the very limit of what they can afford. Once the parties are having to fund separate households before their capital has been divided, plus legal fees, the mortgage payments on the family home can become truly unmanageable. What can be done?

  • If you both agree (or the property is in one party’s sole name), approach your mortgage lender to see if it is possible to alter the terms of the mortgage to reduce the monthly payments on an interim basis. You should take independent advice as to whether this is in your wider best interests

  • Consider a mutual agreement to sell even before the financial settlement is concluded. This will only work if you each have affordable alternative accommodation lined up

  • If you are considering moving out, think carefully about whether you might do more harm than good by leaving. If your former partner will have little incentive to leave and/or sell when the time comes, perhaps it is not such a good idea after all. Non-financial considerations will play a huge role in weighing up the pro’s and con’s

  • It is possible to get an interim order for the sale of a property in extreme circumstances. It isn’t the norm, but the court can do it if the situation justifies it

We’ve agreed to sell but my ex is doing everything they can to frustrate the sale..

This is another common problem. We don’t know whether this was the case for the Derhalli family but we do know that this comes up a lot in practice. The period between reaching a final financial order and carrying out all of its terms the implementation period can be a very tough time, in some cases as bad as the original dispute over the terms of the agreement. How can you make things better?

  • From the very beginning of the separation and divorce process, good, business-like communication is essential to avoid things becoming so acrimonious that there is zero goodwill when it comes to bringing financial matters to a conclusion. This is easier said than done and the pain of relationship breakdown can make it very hard for people to make sensible choices and communicate them calmly. Consider mediation, whether to deal with the entire agreement or one particularly difficult aspect

  • If an order for sale has been granted, it is possible to obtain orders for vacant possession to remove someone from a property that is to be sold

  • When an agreement is reached involving the sale of a property, try to work out details that could prove particularly contentious there and then, rather than hoping they will get sorted out down the line. This could include choice of conveyancing solicitor, identity of the estate agent, how the asking price will be determined, and who will be responsible for funding works of maintenance required to get the property “market-ready„

  • Note that if a property is to be transferred into one party’s sole name and the other party has a history of being uncooperative or difficult to get hold of, consider wording the order so that a district judge can sign the transfer paperwork on their behalf. This will save work in future if the necessary documents remain incomplete

The family home is often the parties’ most valuable single asset and it also carries huge emotional significance within a marriage. There are many potential problems that can arise at the point of divorce. Sometimes good communication and a bit of forethought as to who will move out, when and on what terms can go a long way to keep things on track. Couples rarely end up back in court over this but the option is there to deal with the most intractable issues.

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Jenny Arnold is a Partner located in Manchesterin our Family department

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