Points To Consider When Parties Wish To Maintain Joint Ownership Of Home 

I prepared this post for my CDREHawaii website, which is directed mainly to attorneys, but it may be helpful to homeowners considering a divorce:

It happens.  For instance, the parties may wish to maintain the family home for a period of time after a child heads off to college, so that there is a familiar and welcoming home to return to during vacations.  Or, perhaps, the parties will be moving away, but need an extended period of time to wrap things up here before leaving.

In some cases, the parties may have already created separate living areas within the home, so the transition is almost unnoticeable.  The big legal difference between living in the same home as a married couple, and living in the same home as divorced parties, is the manner in which title is held.  Divorce terminates the tenancy by the entirety, which usually converts to tenancy in common.  Whether tenancy in common or joint tenancy, each party's interest becomes subject to creditor claims.  Putting the home in trust may appeal to some clients, and may offer additional protections.

Here are some points to consider if you have a client who is considering co-ownership of the family home following divorce:

How is title to be held?  

How long will property be held? 

Both parties should have a continuing obligation to maintain and repair their "apartments".

Should each party have a right to periodically inspect the other party's area?

How should costs such as roof, plumbing and electrical repairs, landscaping be addressed?

What provisions should be made for use of garage, yard?

Are pets allowed and, if so, on what terms?

What rights should the parties have to  allow  third parties to stay overnight/move in?

What are the children’s  rights to occupy and use the property following divorce and before sale?

Consider restrictions on the use of utilities (neither party to increase usage over historic use).

You may want to provide that neither party is to encumber the property in any manner, and each is to fully indemnify the other party (including attorneys fees) in the event an encumbrance is placed on the property.

Consider a prohibition against modification or improvement of  the property without the written consent of the other party.

The agreement should provide that both parties will comply with all HOA requirements, and will indemnify the other party from all costs resulting from failure to comply.

Parties should agree that when they are in agreement to sell, or when the date before which no sale will take place has passed and one party has given the other notice of desire to sell, they will cooperate with each other and the realtor and escrow company they select.

Parties should agree to have their apartments in show ready condition upon ___ hours notice of showing by the realtor, and to maintain the exterior of the property in show ready condition at all times once listed.

Name the realtor, or specify a mechanism for selecting the realtor, in the agreement. 

You may also want to provide that the parties will adopt the list price and any adjustments thereto recommended by their realtor, and will also adopt their realtor's recommendations concerning the marketing and sale of the property.

While it would be ideal to have an agreement that does not require further intervention by the court, the agreement should provide that the court retains jurisdiction to enforce terms of agreement and may order the chief clerk of the court to execute any and all documents necessary to effect the sale of the property in accordance with the terms of the agreement. It should also provide that the court may order a party in breach to vacate the property, after which the party remaining in possession would have the right to lease out the vacated apartment (to the extent permitted by zoning laws) and specify how the net proceeds of the lease should be paid out.

Of course there are many other factors that may come into play in a divorce, but I hope that this list provides a springboard to developing proposals that are appropriate in your cases.

 CDRE Hawaii is available to assist with divorce sales throughout Hawaii.