Tag: Property split

Divorce & Property Values

Posted by Ron Kauffman on

Hong Kong is one of the most expensive cities in the world. According to the Hong Kong Census and Statistics Department, divorce has steadily increased, and is nearly three times higher than in 1991. Is there a connection between real estate prices, divorce and property divisions?

As Bloomberg reports, the usual suspects for Hong Kong’s sky-high property prices are low interest rates, a housing shortage and demand from mainland China. But there’s another unforeseen factor: divorce.

Demand for separations and remarriages have accelerated sharply over the past two decades as the former British colony has deepened its integration with the mainland.

Between 1976 and 1995, cumulative total 84,788. In the subsequent years, through 2015, divorces shot up to 323,298.

Looser travel restrictions between Hong Kong and the mainland after Britain handed the colony back in 1997 have played a role in encouraging Hong Kong residents to find new partners across the border.

Florida Divorce and Real Estate

I’ve written on the role of divorce and real estate before. In many cases, declining house prices make it less likely that a homeowner will get divorced, but more likely that a renter’s marriage will end. Why?

Generally, courts distribute the marital assets and debts between the parties. In dividing the marital assets and debts though, the court must begin with the premise that the distribution should be equal.

Equity in the marital home is sometimes the most valuable asset. However, during periods of market downturns, the equity is a lot less, and home values can sometimes be upside down. When the equity is too low to distribute, or selling a house may mean a loss, people don’t want to sell, and have to stay married.

Researchers also think that the drop in divorce rates probably have something to do with the fact that a drop in the equity in your house traps unhappy couples in their house. However, renters can find two affordable apartments easier.

The Case of Hong Kong

Hong Kong’s housing planners didn’t anticipate the wave of break-ups. The cumulative gross number of new domestic housing units built between 1976 and 1995 reached 1,267,335. In the 19 years afterwards that number dropped to 857,378.

The divorce phenomenon is feeding into a market frenzy that the Hong Kong government has found increasingly tricky to manage. As mortgage lending booms and prices reach records, a mix of rising interest rates, frothy property valuations and the potential for a market collapse are frequently flagged as one of the biggest risks to the economy.

In cases of marriage break ups, both members of a former couple can end up on waiting lists for public housing, with private homes proving unattainable.

Households need 18 years of median income to buy a home, more than anywhere else in the world.

The Bloomberg article is here.

 

Dissipation: Wasting Money in Divorce

Posted by Ron Kauffman on

Mary J. Blige, has filed for divorce from her estranged husband, Martin “Kendu” Isaacs. In court filings, there are allegations that he spent hundreds of thousands of dollars on his girlfriends. How does this impact the property division?

Mary has won nine Grammy Awards, four American Music Awards, and has recorded eight multi-platinum albums. She is the only artist with Grammy Award wins in R&B, Rap, Gospel, and Pop. However, she is now concerned about dirty tricks in divorce.

Dirty Tricks

Some couples divorce in a business-like, and even a friendly way. They recognize that coming to a fair end as quickly as possible allows them to get on with their lives.

However, there is no shortage of dirty tricks in divorce. One of the most common is to “dissipate,” or intentionally squander money so a spouse can’t get a fair share of it in the divorce.

Mary and her husband Martin married back in 2003. The divorce cited irreconcilable differences as the reason for the split. The couple has no children together. Mary is purportedly asking the judge to deny Martin’s ability to get spousal support.

According to TMZ, in recent filings, Martin is accused of having dissipated $420,000 of the parties’ marital funds. Martin was Mary’s manager. So, it could be that much of the money allegedly spent on himself or a girlfriend can be chalked it up as “travel charges.” However, Mary alleges the $420,000 in expenses were not business-related.

Property Division

In Florida divorces, courts distribute the marital assets and liabilities between the parties with the premise that the distribution should be equal, unless there is a justification for an unequal distribution. I’ve written about various aspects of property division before.

Some of the factors to justify an unequal distribution of the property include things like the financial situation the parties. The length of the marriage, whether someone has interrupted their career or an educational opportunity, or how much one spouse contributed to the other’s career or education.

Dissipation and Waste

One of the relevant factors courts look to is whether one of the parties intentionally dissipated, wasted, depleted, or destroyed any of the marital assets after the filing of the petition or within 2 years prior to the filing of the petition.

Spouses could dissipate assets by spending money on girlfriends, as Mary alleges. Other instances of waste have included gambling losses, and drug usage. Some people would rather lose the money outright than split it with their spouses.

Where this kind of marital misconduct results in a depletion or dissipation of marital assets, it can serve as a basis for unequal division of marital property. Alternatively, the misconduct can also be assigned to the spending spouse as part of that spouse’s equitable distribution.

Martin is purportedly asking for more than $110,000 per month in spousal support, which Mary objects to. Mary is quoted as saying: “I am not responsible for supporting [Martin’s] parents and his children from another relationship which he lists as ongoing monthly expenses.”

The TMZ article is here.

 

Property Division & Getting Your Name Off Title

Posted by Ron Kauffman on

Long after your divorce’s property division, you remember that your name is still on the deed and mortgage to your old home. It may be important to remove your name from title in order to buy a new home or get credit.

Getting A Court Order

One way to remove your name from title is to go back to the family law judge, and ask for an order requiring that your name be removed from the deed and mortgage. However, to remove your name from title, your ex-spouse will have to refinance the property.

A controlling issue in these types of cases is whether your spouse has the ability to refinance. If your spouse has bad credit, is unemployed, or gets turned down for a loan, it will be hard to force your ex to do something that can’t be done.

However, if your ex-spouse has the ability to remove your name off the mortgage, but has never bothered to, a court order could work. However, you whenever you file for an order in court, you are going to incur attorney’s fees and costs, and that could get expensive.

I’ve written about real estate and property divisions before. Unless your marital settlement agreement or final divorce decree is clear, there may not be any choice but to run back to court for an order.

However, if your name is still on title, your ex-spouse can’t sell the home unless you sign the deed over to her or a new buyer. Additionally, the home cannot be further mortgaged unless you sign on the mortgage papers too.

Selling the Home

If you and your ex agree to sell the property, the sale will usually require the payoff of the existing mortgage with your name on it. That would take your name off the loan and ownership of the home. The same is true if your ex refinances: a new loan should pay off the old mortgage, and a satisfaction of mortgage will be recorded.

Hidden Problems

There are other problems in a property division in which your name is still on title. In the even that your ex-spouse does not pay the mortgage timely, your own credit will suffer the late notices.

Additionally, if someone is hurt visiting your old home, that person will sue the record title owners for their damages. If your name is on title as an owner, you could be sued. Having liability insurance may be in order, which requires talking to an insurance agent.

My Florida Bar Journal article on property is here.