Legal Advice on Divorce and Property Division

Questioner

Is there a possible construction whereby I, as an ex-partner, can obtain full ownership of a home while she continues to live there (temporarily)? As for the more detailed explanation: There was a ruling early this year regarding the divorce. Estate etc. has all been divided amicably. According to the divorce agreement, spousal support has been waived and efforts are being made to find another home. When a divorce is pronounced, the municipality stipulates that there is an additional 80 months of registration time for one year. Unfortunately, the housing associations do not want to cooperate/mediate for the rest and at most offer a small 1-room apartment (while she has to live there with 3 children) because there is a shortage of social housing. The chances are that she will not find another home within a year. And therefore will not be able to find anything after that. I have already inquired in advance at the bank to buy her out and then have her pay rent. (whether or not under the vacancy law or something) The bank does not want to go along with a normal buyout (which is financially easy to achieve) as long as she still lives there. For them, this is simply a tenant, so a risk. The only solution I can see now (without forced relocation) is not to sell the house and continue the mortgage. But since I am the only one paying the mortgage and I can only deduct the interest for 2 years, I will soon be in trouble in more ways than one. To prevent this, I am looking for alternatives. First of all, who can I contact for these kinds of matters? The bank/mortgage provider cannot help me with the content, I cannot afford a lawyer purely for the question and I think the notary is not (yet) the right party. Then the substantive questions: Is it possible for her to relinquish ownership of the property? What does this mean for liability with regard to the mortgage? Are there any provisions to be made? Can the mortgage in this case be partially or fully declared as alimony? I am not allowed to ask for rent for it, otherwise there is a rental construction whereby the bank can immediately claim the entire mortgage. Or is this still seen as a rental structure without any questions about rent and is tenant protection therefore applicable? (which would make the bank annoying) And in that case, should she declare it as free living enjoyment on her tax return? After all, she is no longer the owner, so she cannot claim mortgage interest deduction, I think. Are there any other aspects that apply here that I am completely overlooking? I would like to hear if anyone has any wisdom on this.

Lawyer

Even; the distance of the spousal support is the breaking point here, but you can both waive it for the duration of the period as long as your ex lives in the house, for which I sincerely approve. If you state the mortgage interest and the life insurance (50%) as spousal support, that is deductible. Your ex must then pay income tax on it. You can arrange this by adding an addendum to the agreement that allows for a change after two years of payment of the (deductible) mortgage interest

Questioner

This has now also been included in the agreement for a period of 2 years after the divorce has been pronounced. The only problem is that I pay the entire mortgage. In itself this is not a problem at the moment, as 50% can be stated as interest and 50% as alimony. This changes after the term of 2 years. At least for 'my' part of the interest. It is no longer my main residence. Or am I overlooking a tax rule here that makes it possible? Are there any other things that can be thought of for this? In principle, the current value of the home and savings policy are included in the agreement, with the statement that I will pay for it and that the equity that is built up will now be forfeited to me. In addition, it is stated that the interest that I still pay after 2 years will be included as a regression arrangement when settling the property. So far, everything is neatly laid out on paper. But I want to prevent my ex from having a debt with me because it all took too long. After all, if it is forgiven, the tax authorities will come knocking again regarding gift tax. The intention was/is that she simply has sufficient income and her own home, but work is currently not possible due to circumstances and her own home therefore seems to be becoming a bigger problem. I would like to help, but of course the intention is not for me to get into financial trouble or for her to build up a debt.

Lawyer

The part that relates to the obligations of your ex but that you pay can be considered as spousal support, there is the requirement that you then state this well and clearly in a covenant or supplement to it. You can then settle or not, depending on the debt you can also agree on a fixed amount. There is freedom of contract that divorcing people often forget. If you now change the agreements for the temporary situation and condition that your ex finds a suitable home, there is also no question of waiver. How will you arrange the sale of the house later? After all, you can also agree to sell the house and share the surplus value. It is true that your ex cannot end up in social housing if she has more than 25,000, but she may rent temporarily. If she has equity, that should not be a problem.

Questioner

Should a supplement to the covenant be made through the court, or is it sufficient to put the agreements on paper and ratify them by signing them? There is no question of any equity in the home at the moment. In principle, the house is still underwater. The value in the covenant that was included, however, was set slightly higher so that when the divorce is pronounced on her side, there is no question of a residual debt on paper and when sold, this will expire to me, positive or negative. Then there was no need to settle any further between them. (No gifts or the like.) So in that respect everything is neatly arranged. Even the fact that finding another home will take longer is partly anticipated. But that was done more from a prevention of abuse than a longer term solution. If the search period lasts longer than about 5 years (which it looks like if she can't find anything) then the regress arrangement will cause a problem. Half of the value of the policy has now been awarded, but this will be gone after about 3 years if it is not seen as alimony. The equity in the home increases (logically) much less quickly than the negative balance that she is going to build up. Now I can adjust that temporarily as an addendum so that her part of the interest is still considered alimony. Then I get a part back and she can declare it as income. (which will then be deducted from her social assistance benefit, as long as she cannot work) However, the policy is also paid for in full by me. If I also say that 50% of this is alimony, then logically 50% of the value build-up of this should also be for her, right? Something I would not find fair. (And free living pleasure and a large piggy bank filled by someone else is overkill) In addition, the other non-alimony part (both the interest and the policy) cannot be declared, because I no longer live there. But I also do not receive rent for it or anything. However, it is also not realistic that I will bear the full burden for 2 homes. I can't buy another house until the joint house is sold. But I can't rent either, because I fall into the private sector and can't get rent subsidy. So I'm a bit torn. Either I saddle her with a debt she can never pay, or I saddle myself with a millstone around my neck that will probably get me into big trouble. It really does seem as if everything in divorce law and tax law is geared towards screwing each other over as much as possible. Does anyone happen to know of any banks/mortgage providers who would go along with a solution of buying out and then letting them move in 'for free'? (So then the rent would count as alimony) Or does anyone know of a creative construction within the law that makes it possible to help my ex, without having to rely too much on other things?

Lawyer

Yes, that 50% is no longer deductible and must go to box 3, so if you still have assets that must be declared, then the debt is offset against that. Furthermore, you must also reason that if you remain co-owner for a certain period of time, you will also benefit from an improving market and vice versa. So it is difficult to say how you will really be doing at the end of the ride. On the other hand, the divorce will go more smoothly and that is nice if there are children. What the value of that is is completely impossible to predict.