For some families the summer holidays herald the annual return to their cottage by the sea, or Normandy gîte. Holiday homes, here and abroad, are no longer reserved for the super-rich. Enterprising middle income investors have, over the past decade in particular, acquired seaside homes, overseas properties and caravans to provide both investment income and capital growth while offering “free” accommodation for the family’s summer holiday, some even regarding “The Lobster Pot” as their pension pot. For happy families owning a seaside retreat can seem a great idea.
But for couples in the midst of divorce their ‘dream home’ can become a toxic legacy of their marriage as they question: Who should keep it? Who should maintain it? Does either of us even want it? Should it be sold and, given the volatility of the worldwide property market, can it be sold without making a substantial loss thereby eroding the precious matrimonial pot? One example in recent years involved a Spanish villa which fell £100,000 in value to £240,000 with £190,000 still to pay on the mortgage. Although equity remained the parties feared they would never sell it. Neither wanted it.
Wrangles over overseas houses are becoming increasingly commonplace with the party “lumbered” with the cottage in France for example seeking to later vary an order for a financial remedy when the bargain they brokered on divorce is no longer as attractive as it once seemed. In most cases the courts are predictably unforgiving.
Such issues are complex enough where the asset is readily identified and available to the parties, but consider the cases where there is a need to protect the asset from dissipation. Section 37 of the Matrimonial Causes Act 1973 operates to provide injunctive relief for parties who suspect assets have gone or might go awry. There is no difficulty using s.37 to secure foreign property as it attaches to a person (usually one of the parties) and not to the property itself. No undertakings as to damages are required but a guilty intention must be shown of the one party to put the asset out of the reach of the other.
If you would like to discuss any aspect of family law and property ownership including owning holiday homes or overseas property please contact our Family law solicitors on 01782 205000 or firstname.lastname@example.org