If you are considering whether to remain joint owners of the marital home until your youngest child turns 18 and/or graduates from high school what are the benefits and risks of the decision? In some
divorces the decision is made by the custodial parent if the children are of an age that the judge thinks the children should not be required to move, provided the home can be afforded by the
The obvious advantage is that if the residential parent can afford the monthly charges for the home it allows the children to remain in their home and disrupts their lives as little as possible. They stay in the same school district, keep the same friends, see their past teachers, remain on the same teams and members of the same clubs and continue their education in the community that the parents picked contemplating a long marriage together. Some parents will jointly make this decision because the children are already in high school and will graduate in a year or two.
Some parents will make the decision based upon what they believe the current value of the home is and what they anticipate it will be worth when it is time to sell in the future. This of course has the risk of what the market conditions will be like in the future and must be balanced against the costs of continued shared ownership.
Many divorce settlement agreements will provide that the house is to be sold in the future based upon the graduation or aging out of the children or the cohabitation of the former spouse. Until the sale of the house, the parents will usually equally share the cost of "necessary capital improvements and repairs". Such repairs are usually defined as HVAC, plumbing, electrical and structural, but not cosmetic or routine maintenance. Structural repairs are the type that are necessary to preserve the value of the residence and that a buyer would reasonably expect to be in good working order. Painting, carpeting, landscape and routine maintenance are usually the sole obligation of the person living in the home.
To limit the payment for routine repairs of structural items, many agreements will provide a deductible of several hundred dollars before the cost must be shared. In other words, the non-resident is not paying for handyman incidental repair expenses. Agreements will often provide for the right to obtain an estimate and access to view the damaged area unless it is an emergency repair.
Clients that are moving out need to consider whether they can continue to afford their half cost of ongoing responsibility to contribute to repairs vs the future hopeful appreciation of the residence. Otherwise, the cost of repairs will cause immediate financial harm due to the size of the additional expenses. If the home does not appreciate enough, the future return on investment will not be there.
Finally, remaining joint owners of the home maintains an economic partnership that no longer exists. Effective communication is important. If you cannot discuss matters or if there is a high level of animosity, it will be hard to remain "business partners" in the residential "investment".
The bottom line is to weigh the options carefully and to give this issue a great deal of thought to avoid future problems.