Real Estate and Divorce: Who Gets the House?
For most Colorado couples, the family home is their most significant asset and their greatest source of concern during a divorce. Because Colorado follows the principle of Equitable Distribution, there is no automatic 50/50 split. Instead, the court aims for a division that is “fair and equitable” based on the specific circumstances of the marriage.
1. Marital vs. Separate Property
Before a house can be divided, the court must determine its legal character:
- Separate Property: Generally includes real estate owned prior to the marriage, or property acquired via inheritance or third-party gift. Usually, separate property is not subject to division.
- The “Appreciation” Catch: In Colorado, if your separate home increased in value during the marriage, that increase in equity is considered marital property and may be subject to division.
- Marital Property: Any home purchased during the marriage is presumed to be marital property, regardless of whose name is on the deed or the mortgage.
2. How the Court Decides
If parents cannot reach an agreement through mediation, a judge will consider several factors to determine the home’s fate:
- The Children’s Best Interests: Courts often prefer to keep the “custodial” or primary residential parent in the home to maintain stability for the children.
- Financial Feasibility: Can one spouse realistically afford the mortgage, taxes, and maintenance on a single income? The court will rarely award a home to a party who cannot demonstrate the ability to refinance and remove the other spouse’s name from the debt.
- Offsetting Assets: If one spouse keeps the home, the other must typically be “bought out” with other marital assets, such as retirement accounts or cash savings.
3. Common Outcomes for the Family Home
| Outcome | How it Works | Best For |
|---|---|---|
| The Buyout | One spouse refinances the mortgage and pays the other their share of the equity. | Situations where one party has the income to qualify for a solo loan. |
| The Forced Sale | The home is sold on the open market, and the net proceeds are split equitably. | When neither party can afford the home alone or neither wants to remain. |
| Deferred Sale | One parent stays in the home until the youngest child graduates, then it is sold. | High-stability needs for children; requires high trust between ex-spouses. |
The Bottom Line
Under C.R.S. § 14-10-113, the court has broad discretion. Whether you are seeking to stay in your home or ensure you receive your fair share of the equity, you need a strategy that accounts for current market valuations and future refinancing requirements.
Schedule a consultation with our Colorado Springs lawyers today by calling us at (719) 626-4661.