By Chevonne Lin

 

The matrimonial home is undoubtedly one of the most valuable family assets one will own. As a consequence, people will often have a lot of questions and concerns about what might happen to it in the event of a divorce.

 

As you would expect, the law varies depending on the ownership of the property. Normally, if the property is held jointly between the parties, one party has to have the consent of the other party if they want to sell or mortgage the property. However, if there is a party who is not a legal owner of the property, they might be particularly concerned as they might feel that they are in a vulnerable position. Keep reading to find out how the law protects the non-owning spouse in such situations.

 

Matrimonial Home Rights

 

The non-owning spouse is protected under Section 30 of the Family Law Act 1996 (FLA 1996) against eviction from the matrimonial home, which means that they have the right to occupy the family home. Please note that even if the spouse owns an equitable interest (i.e., right to occupy), they are still not a legal owner of the property and are still considered to be “non-owning”.

 

Section 30(2)(a) of the FLA 1996 explicitly states that, “If in occupation, [the non-owning party has] a right not to be evicted or excluded from the dwelling house or any part of it except with the leave of the Court”.

 

It is important to note that such rights terminate on the death of the owning spouse or on the grant of a decree absolute or final order. However, the Court can exercise its powers under Section 33(5) of the FLA 1996 and extend such rights beyond these events.

 

If the non-owning spouse wants to safeguard their interest, they should register their matrimonial home rights so that they bind any subsequent buyers and lenders. Once the notice is registered with HM Land Registry, it will appear on the title register of the property. That will prevent the owning spouse from selling, transferring, or mortgaging the property without the non-owning spouse’s consent.

 

Occupation Orders

 

An occupation order generally gives an excluded person the right to live in the home or it can be used to give a person the right to continue to remain in the home. Whether the non-owning spouse has rights to apply for an occupation order under the FLA 1996 depends on their status at the time of applying.

 

If the non-owning spouse has an existing right to occupy the home, he/she would be able to apply for an occupation order under Section 33 of the FLA 1996. The non-owning spouse may have this right because they have an interest or statutory entitlement (for example, the matrimonial home rights under Section 30 of the FLA mentioned above). The home must also have been the home of the couple.

 

The factors the Court will consider when deciding whether to grant the order are contained in Section 33(6) of the FLA, this includes, (a) the housing needs and housing resources of each of the parties and any child; (b) the financial resources of each of the parties; (c) the likely effect of any order, or of any decision by the Court not to make such an order, on the health, safety or well-being of the parties and any relevant child; and (d) the conduct of the parties in relation to each other and otherwise.

 

The Court will also have to apply the balance of harm test contained in Section 33(7). It states that if the applicant or relevant child is likely to suffer significant harm attributable to the conduct of the respondent if an occupation order is not made, the court shall make such an order. The case of Chalmers v Johns clarified the approach the Court should take when making such orders. The applicant must demonstrate that he/she would suffer significant harm due to the respondent’s conduct before the Court applies the balance of harm test. If the applicant cannot prove he/she will suffer such harm, the Court will determine the case on the basis of the Section 33(6) factors alone.

 

An occupation order under this section can be made for a specific period of time or until the occurrence of a particular event. If the applicant has no existing right to occupy the home and the other party has such a right, whether the applicant can apply for an occupation order depends on whether they are a former spouse or cohabitant. But as we are not considering the rights of couples who are not legally married at the time of application in this article, that is outside our scope of discussion.

 

Preventing Disposals

 

The non-owning spouse can apply for an injunction from the Court to prevent the owning spouse from disposing the property under Section 37(2)(a) of the Matrimonial Causes Act 1973 (MCA 1973). “Property” in this context is defined widely to include houses and any personal properties such as funds in bank accounts, yachts, furniture etc. However, in order to apply for an injunction, the non-owning party must already have made an application for financial relief under the MCA. The Court may grant an injunction if there is concrete evidence to show that the owning party is about to dispose of the property with the intention of defeating the claim for financial relief, or if he/she has the intention to delay or frustrate its enforcement.

 

Setting Aside

 

If the non-owning spouse only knows about the disposition after it has taken place, they can apply for an injunction from the Court to set aside a reviewable disposition under Section 37(2)(b) of the MCA 1937. The Court needs to be satisfied that the owning party has made a reviewable disposition with the intention of reducing the amount of any financial relief which might be granted, or frustrating or impeding the enforcement of any order.

 

A “reviewable disposition” is one that is not made for valuable consideration to a bona fide purchaser. An example of this would be if the owning party gifted and transferred the matrimonial home to his friend, the Court would be able to set this aside as it was not made for valuation consideration.

 

In situations where the reviewable disposition is made after financial proceedings have concluded, if it was made with the intention of frustrating enforcement of an order for financial relief, it could also be set aside under Section 37(2)(c) MCA 1973.

 

If you have any questions or want any advice on this, please don’t hesitate to contact us. Our team of specialist family law solicitors have many years of experience and will be able to give you the help you need.

 

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