Protecting your property during and after divorce proceedings

Protecting your property during and after divorce proceedings is discussed in detail in the latest blog post from our Family Law team.

During divorce proceedings, couples are often advised to consider the distribution of their financial assets.

Although it is important that all assets are considered, in most circumstances the most valuable asset held is the family home.

This article will consider and advise the importance of protecting the family home during and after divorce proceedings and how to register a beneficial interest in the property if one spouse is not a legal owner of the home.

When a spouse is not the legal owner of the family home but has resided there, that spouse has the legal right to protect their interest.

Matrimonial Home Rights Restriction

If the family home is held solely in the other spouse’s name and the spouse believes they have a beneficial interest in the property, the spouse could have grounds to apply for a Matrimonial Home Rights Restriction. To do this the spouse can make an application to the Land Registry to register their home rights. It is important to note however that this applies only in relation to the family home and not any other properties that the spouse may own.

Once the spouse has registered their home rights at the Land Registry, the notice will appear on the title to the property ensuring that any purchaser or lender will have to notify the spouse of any intended transactions to be associated with the property. However, this does not prevent the other spouse from an attempt to sell or re-mortgage the property. But the presence of this notice will often be an unattractive option to any purchaser interested in the property.

Unilateral Notice

If in the circumstances a spouse owns multiple properties and the other spouse becomes concerned that they may attempt to re-mortgage or sell these properties prior to the conclusion of any financial settlement, a spouse has the legal right to register a unilateral notice (this does not apply to the former matrimonial home). The spouse will need to provide details about their beneficial interest in the property; usually, by stating that there are ongoing divorce proceedings will be sufficient grounds to make a claim.

A spouse can have the ability to register a unilateral notice without the consent of the other spouse, although they will be notified of the registration of the notice and will therefore have the ability to apply for this notice to be cancelled.

When a spouse makes a registration of a unilateral notice, this will prevent the sale or re-mortgage of the property without notifying the person named in the notice. This enables the other spouse to protect the property throughout the proceedings.

Freezing Order

A spouse may be entitled to what is known as a freezing order. The order is made via a Court application during matrimonial financial proceedings and is a type of injunction. A freezing order may be granted if in the circumstances a spouse reasonably believes that there is a risk that their spouse may sell the property and dispose of the sale proceedings in an attempt to put assets out of their reach during the divorce.

A freezing order gives a spouse the legal right to apply to the Court on the grounds of restraining the other spouse from disposing or dealing with an asset until a specific time or event. For example, until the marriage has been dissolved and a financial remedy order has been made. However, it is important to note that the parties must have commenced divorce and financial remedy proceedings to be entitled to make an application to the Courts for a freezing order.

Often, when an application for a freezing order has been submitted, the other spouses’ legal representatives may recommend offering an undertaking as an alternative to being granted a freezing order. An undertaking is otherwise known as a legally binding professional promise that the other spouse will not sell or re-mortgage the property.

It is important to note that a spouse should register their beneficial interest in the property without delay if the spouse is not named on the title of the property to heighten the chances of success in matrimonial proceedings.