If you are going through a divorce, real estate may become one of the most disputed parts of your case. The marital home may represent a large share of your net worth. You may also own vacation homes, rental properties or commercial real estate. Those assets can make property division more complicated.
In Massachusetts, courts divide marital property based on what they consider equitable under the circumstances. Real estate can carry both financial and personal value. As a result, disputes about ownership, value and future disposition are common in divorces involving substantial assets.
When both spouses want the marital home
You and your spouse may both want to keep the marital home after the divorce. For some people, the home represents financial security. For others, it reflects years of investment and appreciation. Several issues commonly influence these disputes:
- Calculating the equity in the property
- Determining whether either spouse can refinance
- Comparing the home’s value to other marital assets
- Evaluating each spouse’s ability to cover ownership costs
- Examining whether a buyout is financially feasible
If one spouse keeps the home, that spouse will usually take responsibility for the mortgage, property taxes, insurance and maintenance costs. Those expenses can become an important part of settlement discussions.
Why valuation disputes can delay a settlement
Before real estate can be divided, the parties must determine its value. In some cases, each spouse hires a separate appraiser and receives a different result.
The difference may come from the comparable properties selected, changing market conditions or differing opinions about the property’s condition. Large gaps between valuations can affect the division of other assets because the value of real estate may influence the overall property settlement.
Investment properties can create additional challenges
Investment properties can raise issues that do not arise with a primary residence. Rental homes, vacation properties and commercial buildings may produce income, carry ongoing expenses or require different valuation approaches. These properties can raise questions such as:
- Calculating current market value
- Measuring rental income and cash flow
- Identifying mortgages and other property debt
- Estimating future appreciation
- Determining each spouse’s ownership interest
Income-producing properties may require a broader financial review because their value may extend beyond the real estate itself.
Buyout strategies and property sales
Property disputes sometimes end with one spouse buying out the other’s interest. A buyout may involve refinancing a mortgage, using cash assets or offsetting the property’s value with other marital assets.
In other cases, neither spouse wants to keep the property after the divorce, or neither spouse can afford the costs of ownership. The property may then be sold and the proceeds divided according to a settlement agreement or court order.
The result will depend on the property involved, the amount of equity and the makeup of the marital estate. Different assets can present different challenges during the property division process.