Who Keeps The Family Home in a NM Divorce?

One of the most important questions anyone going through or considering a divorce has is “Can I keep my home?”. The fact is your house is not just your home, it is likely your most valuable asset and something you probably have an emotional attachment too, especially if you have children.  It’s understandable that you would want to protect something you worked so hard to achieve. This article will discuss how marital property, like your home, is divided in New Mexico divorce. 

In New Mexico, all property acquired during the marriage is considered community property and must be divided equally. That means if you purchased your home after you were married, you and your spouse share equal ownership. This gets more complicated if one party owned the home before the marriage. If they owned the home outright, it would be considered their sole separate property.  However, if they merely purchased the home a few years prior to the marriage, the parties’ exact interest in the house needs to be calculated based on the length of the marriage relative to the mortgage. 

Given the fact that there is usually equal interest in the house, there is frequently a dispute over who gets to keep it. Just as frequently, this dispute is rendered pointless because neither party is in a position to maintain the home following the divorce. This is typically where the decision process will begin which is an entirely different issue than whether the parties will cooperate in making it happen. 

When determining who gets to keep the marital residence, your attorneys (and eventually your settlement facilitator) will consider the following:

  • Does either party (or both) want to keep the house?
  • Can either party actually afford to keep the house?
  • Does the house need to be sold?

 No matter what the answers to the questions above, the next question will be; Is it possible for the parties to agree on a value for the house?

Why The House Usually Needs to Be Sold

In many cases, the answer to the first two questions above is no. In those cases, the house needs to be sold. In fact, judges in New Mexico typically prefer to finalize all proceedings related to the divorce in the MSA. That means they don’t like to award the house to one party on the condition of refinancing and buying the other party out at a later time. If you agree to let your spouse keep the house, refinance and buy you out two years down the road and they default on the mortgage, your credit will still go down with the ship. That’s why selling the house is often the only option.  Valuation of the home then becomes the challenge. This valuation can be complicated by a number of conditions such as market conditions, equity, improvements and so on. This means that unless one party can afford to take the financial responsibility of the home immediately, the house will need to be sold. In addition, and most difficult to unravel, is the community and separate property interests in the home. This is where the conflict can escalate fairly dramatically.

How Things Get Complicated

Not all martial homes are owned equally. Determining separate and/or community property is usually complex and can complicate the situation. For instance, the down payment could have been made with a gift or inheritance from the family of one of the parties. There may have been improvements over the years made from an inheritance or other separate property acquired over the course of the marriage.
This has to be addressed. In cases with high value and complex ownership issues, it may be necessary to hire an expert or even more than one expert to identify and sort it out properly. It is essential that this is done before the settlement facilitation. However, even then, there may remain disputes that send these cases to trial leaving the judge to decide. This is typically not the best outcome for either of the parties as the fate of the parties, the family, the children and what may be their most valuable asset is turned over to the hands of a judge who has very little knowledge of the situation other than what is presented to them during hearings.

Dividing the Proceeds of the Sale

Whether the parties can reach an agreement or go to trial, ultimately the proceeds of the sale must be divided. The division will be based on the factors mentioned above. It will either be done based upon a stipulation between the two parties (entered as an Order with the court) or by order of the court following a trial.

Whether the Order comes as a result of an agreement between the parties or as a result of the trial, the Order is fully enforceable. Violation of these orders happens with regularity landing the parties back in court.

Many times, one of the parties simply will not abide by the Court Order. Other times, there are outside factors that make it very difficult if not impossible to comply with the Order. For example, market conditions may not be such that the house can be sold without leaving the parties burdened with a deficiency judgment.

Tips For Keeping Your Home

If you are determined to stay in your home, it usually best to work with that in mind from the beginning. Once you have made the decision to file, you should not be the spouse that leaves the home if you intend to live there during the divorce. While not impossible to move back in, it certainly complicates matters and we now have to litigate who gets exclusive use of the marital home and getting the other spouse out of the house. That being said, it is a myth that it is harder to keep the house if you are the party that leaves. It just makes things more complicated in the interim. If you intend to keep the house after the divorce,  you have to be prepared to buy the other party out or compensate them with other assets. You also have to assume financial responsibility immediately after the divorce is finalized and be able to refinance on your own if needed.  

Get The Help You Need

If you are currently going through a divorce or considering it, Genus Law can help. Our Albuquerque Divorce Lawyers offer case strategy sessions where we can discuss your case, and provide you your options with no commitment necessary. If keeping your home is important to you, contact our New Mexico divorce attorneys today and let us help you achieve your divorce, custody or alimony goals. You chat with someone online now, or you can call us at (505)-317-4455.

Anthony Spratley
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Experienced Divorce, Child Custody, and Guardianship Lawyer Serving Albuquerque and Beyond