The family home is often one of the most valuable assets in a California divorce. It can also be one of the most emotionally significant. Deciding what happens to the home may require answering several separate questions, including whether the property is community or separate property, what it is worth, whether either spouse can afford to keep it, and whether one spouse may have a reimbursement claim.

Determining the Character of the Home

Before deciding how a home should be divided, its property characterization may need to be determined.

California divorce cases distinguish between community property and separate property. The analysis can become more complicated when a home was purchased before marriage but mortgage payments, improvements, or other expenses were later paid with community funds.

Likewise, the source of the down payment and other contributions toward the property may become important.

Financial records can therefore play a significant role. Purchase documents, mortgage statements, refinancing records, bank statements, and records showing the source of funds used toward the property may help clarify the parties’ respective interests.

Determining the Property’s Value

If one spouse wants to keep the home, determining its value may be necessary before the parties can evaluate a potential buyout.

A professional real property appraiser may be used when the value is disputed or when an independent valuation would help resolve the issue. The appropriate valuation date and the property’s condition may also matter.

Property owners themselves may sometimes provide an opinion concerning the value of their property. The usefulness of that opinion can depend on the owner’s knowledge and the factual basis supporting the valuation.

Information such as the purchase price, current condition, improvements, previous appraisals, comparable sales, and income and expenses associated with the property may be relevant to the valuation analysis.

Can One Spouse Buy Out the Other?

Even when both spouses agree that one person should keep the home, the practical question is whether that spouse can afford to do so.

A buyout may require sufficient funds or other property to compensate the other spouse for their interest. Refinancing may also become an important practical consideration when both spouses remain obligated on a mortgage.

In some cases, other assets can potentially be considered when dividing the overall community estate.

When neither spouse can realistically buy out the other’s interest or offset that interest against other property, selling the home may become necessary.

Preparing for the Property Division Process

Questions involving the family home are rarely limited to who wants to remain there. Ownership history, financing, property characterization, valuation, reimbursements, and the parties’ overall financial circumstances may all affect the outcome.

Gathering property and financial records early can make it easier to identify the issues that must be addressed before the home can ultimately be divided.