Selling the family home on relationship breakdown
When a relationship breaks down usually one of the main assets the parties have to negotiate over is what is to happen to the family home. If the property is in joint names, the parties need to decide whether one will be able to buy the other’s interest or whether the property should be sold and the net sale proceeds divided. If the family home is in one party’s sole name, the other must first prove they have an interest as an added step before discussions are had as to what will happen to the property.
The law treats property rights very differently for unmarried parties than for spouses. There is no such thing as a common law marriage so unmarried parties are required to negotiate using property law, compared to spouses who negotiate under family laws where needs are the dominating factor. However, in both cases, if the parties decide the family home needs to be sold there are various conditions and arrangements which their overall settlement terms should cover. For example, the agreed settlement terms should document when the property will go on the market for sale, what price it will be marketed for, who will have conduct of sale and how the sale proceeds should be used to meet costs in relation to the sale before any balance is divided between the parties.
There are a lot of couples who mistakenly believe that if only one party has full conduct of sale (i.e. they are the only person allowed to give instructions to estate agents or the conveyancing solicitor) they can also sign the contract for sale on behalf of both joint owners. There are times where one party may well be obstructive with the estate agents, refuse to engage with the process or even make a deliberate attempt to make the property appear unsellable.
However, even if the parties have an order from the Court stating that one party has sole conduct sale, that Order does not give the party the right to sign any documentation on behalf of the other party, whether that is the conveyancing solicitor’s terms of engagement, the contract for sale or the transfer deed.
If one of the parties is refusing to sign conveyancing documents, an application needs to be made for an order that the court execute documents in place of that party under section 39 of the Senior Courts Act 1981 (SCA 1981). This is separate from an order providing that one party has conduct of the sale of a property.
In November 2017, as part of his project to standardise orders in family proceedings, Munby P approved and released in Word, a number of standard financial remedy and enforcement orders. Some of the orders have been updated subsequently.
The standard orders include
- Standard order 4.4: Order for execution of a document, which provides for the court to execute conveyancing documents in place of one of the parties who is refusing to engage with the sale process.
- Standard order 4.3: Order for sale (supplemental order dealing with mechanics of sale) which provides for one or both of the parties to have conduct of the sale.
- Standard order 4.5: Order for possession (in place of Form N26), which provides that the respondent give the applicant possession of the property
The use of the standard orders is strongly encouraged, but not mandatory and they may be varied if required. It is therefore important that even when two parties have agreed settlement terms, if one suspects the other may try to obstruct the sale of the property, the agreed settlement terms should be drafted into a formal court order by an experienced family solicitor who can then ensure the appropriate wording is used within the Order to try and prevent any issues further down the line with the sale.
Amanda Erskine is a solicitor in the Family department at Barker Gotelee Solicitors in Suffolk.