Posts Tagged ‘Dividing the House’

California Divorce Blog–Dividing the House

September 17, 2016

In California, it is common for a house to be the largest asset owned by a divorcing couple. I am often asked how the equity in the house is divided. Is one party allowed to stay in the house and retain ownership? What if the house was owned prior to marriage? Real Estate, also known as Real Property, can present multiple complicating factors which must be carefully analyzed before you proceed with a divorce case.

We start with the concept of community property and separate property. In general, community property is all property acquired during the marriage. Separate property is all property acquired by a party before marriage and after the date of separation (gifts and inherited property are also separate property regardless when acquired). Therefore, if the house was purchased during marriage then the house is by definition Community Property.

We then look to the source of funds used for the down payment and monthly mortgage payments. If the house was purchased during marriage and the down payment was from community property money then the house is likely Community Property and the equity should be divided 50/50. If the down payment was from a separate property source, then the party who supplied the separate property down payment should be reimbursed for the down payment the the remaining equity split 50/50 as community property.

If the house was owned prior to marriage and is separate property, it is still possible for the community to acquire a community property interest based upon the monthly mortgage payments being paid from community property income. In my experience, this typically does not amount to a large amount of money because the community acquires an interest in the home based upon the reduction of principal (not interest) paid. This amount is then reduced to a 50% interest for each party.

Please remember that other issues can determine who owns the house, including, but not limited to, how title is held, whether an interest was gifted from one spouse to another, the ability of one spouse to trace funds, violations of fiduciary duties owed between spouses and other factors. This issue alone is often complex and should therefore be analyzed very carefully.

Please call Attorney Keith F. Simpson today to discuss your divorce case at (310) 297-9090. Attorney Keith F. Simpson is a Divorce Lawyer in Manhattan Beach, California. You may also visit the website at to review further divorce information.