Selling or Keeping the Marital Home During a Maryland Divorce
In a Maryland divorce, the marital home is subject to equitable distribution. You generally have three main options: one spouse buys out the other's equity, you sell the property and split the proceeds, or you ask the court to order a forced partition sale if you cannot agree.
For most couples in Baltimore, Bethesda, Frederick, and Rockville, the marital home is both their most valuable financial asset and their deepest emotional anchor. When facing a divorce in Maryland, deciding who gets to keep the house-or whether to sell it entirely-is often the most heavily debated issue. Maryland is an 'equitable distribution' state, meaning the court will divide marital property fairly, though not necessarily equally. Navigating the real estate market, managing underwater mortgages, and executing quitclaim deeds require careful legal and financial planning. To ensure your real estate assets are protected, it is highly advisable to search our directory for an experienced Maryland divorce attorney.
Step-by-Step Process for Dividing Real Estate in Maryland
Because real estate is tied to legally binding mortgage contracts and county deeds, dividing it during a divorce requires strict adherence to legal procedures. Here is how the process generally unfolds.
Step 1: Determining Marital vs. Non-Marital Property
First, you must establish if the home is actually marital property. Under Md. Code Ann., Fam. Law § 8-201, marital property is defined as any property acquired during the marriage, regardless of whose name is on the title. If one spouse owned the house prior to the marriage and never added the other spouse to the deed or used marital funds to pay the mortgage, it might be classified as non-marital property and shielded from division.
Step 2: Valuing the Property and Filing Forms
You must determine the exact current value of the home, usually by hiring a professional real estate appraiser. Once the value and the remaining mortgage balance are known, you calculate the home's equity. You will list this information on Form CC-DR-033, Maryland, Circuit Court, Joint Statement of Parties Concerning Marital and Non-Marital Property, which is a mandatory filing for contested property cases in Maryland courts.
Step 3: Negotiating a Buyout or a Sale
Spouses typically negotiate an agreement where one spouse 'buys out' the other's share of the equity by trading other marital assets (like retirement accounts or cash) or refinancing the mortgage. If a buyout is impossible, the spouses can agree to list the house on the open market, sell it, pay off the mortgage, and divide the net proceeds.
Step 4: Updating the Deed and Mortgage
If one spouse keeps the home, they must remove the departing spouse's financial liability through refinancing or a formal mortgage assumption. Under Md. Code Ann., Fin. Inst. § 11-522, lenders of conventional home mortgages must permit a qualified borrower to assume the loan and purchase the co-borrower's interest in connection with a decree of absolute divorce. Simultaneously, the departing spouse will sign a quitclaim deed to transfer their ownership rights entirely to the retaining spouse, which must be recorded with the local county land records office.
Buying Out a Spouse and Dealing with Underwater Mortgages
A buyout is ideal for providing stability, especially for young children remaining in the home. However, to execute a buyout, the retaining spouse must be able to qualify on a single income for either a mortgage assumption under Md. Code Ann., Fin. Inst. § 11-522 or a complete refinance. If the home is 'underwater'-meaning you owe more on the mortgage than the property is currently worth-the division becomes more complicated. In such cases, neither spouse walks away with cash. Instead, they share a negative asset. You may have to negotiate a short sale with the bank, or one spouse may agree to take on the underwater property in exchange for receiving a larger share of other debt-free marital assets.
Forced Partition Sales
What happens if you want to sell the house, but your ex-spouse refuses to move out or sign a listing agreement? Under Md. Code Ann., Real Prop. § 14-701 et seq., a co-owner of a property can petition the court for a partition sale. In a divorce context, under Md. Code Ann., Fam. Law § 8-202(b)(2), the court has specific statutory authority to order a partition or a sale in lieu of partition for property owned by both spouses. If the judge at the Montgomery County Circuit Court, Rockville or the Frederick County Circuit Court, Frederick decides that the property cannot be physically divided and one spouse cannot afford a fair buyout, the court will order a trustee to forcefully sell the home and distribute the equitable shares of the proceeds.
Rental Properties and Out-of-State Vacation Homes
Maryland couples frequently own investment properties in Baltimore or vacation homes in neighboring states like Delaware or Pennsylvania. Rental properties are evaluated for their current market value as well as the passive income they generate. Out-of-state real estate adds jurisdictional complexity. While a Maryland judge at the Baltimore City Circuit Court, Baltimore can determine the financial value of the out-of-state property for the purpose of a Md. Code Ann., Fam. Law § 8-205 monetary award, they technically cannot change the physical title of a property located outside Maryland. Spouses must cooperate to execute out-of-state deeds, or the court will force the value equivalent through other Maryland assets.
How Much Does it Cost in Maryland?
If you file an initial Form CC-DR-020, Maryland, Circuit Court, Complaint for Absolute Divorce, the standard court fee is roughly $165. A professional real estate appraisal generally costs between $400 and $700. If you have to transfer the deed, county recordation fees vary but typically cost a few hundred dollars. Legal representation for an uncontested divorce involving a simple property settlement agreement can cost $2,500 to $5,000. If the real estate division becomes highly contested and requires a partition action or a full trial, attorney fees can easily range from $10,000 to $20,000.
How Long Does the Process Take?
If you and your spouse agree on who keeps the house and how to divide the equity, a mutual consent divorce can be finalized in roughly 60 to 90 days. If the house must be sold, the timeline relies heavily on the local real estate market; the court will usually grant the divorce and order the sale, which might take 3 to 6 months to close. A heavily contested divorce requiring a forced partition order by a judge can drag on for 12 to 18 months.
Frequently Asked Questions (FAQ)
Who gets to live in the house during the divorce?
Either spouse has the right to live in the home until a court order says otherwise. However, a judge can grant a 'Use and Possession' order, allowing the custodial parent to stay in the family home with the minor children for up to three years after the divorce before the house is sold or bought out.
What is a quitclaim deed?
A quitclaim deed is a legal document used to quickly transfer whatever ownership interest one person has in a property to another person. It does not, however, remove the departing spouse's name from the mortgage obligation.
If my spouse gets the house, am I free from the mortgage?
No. Even if the divorce decree awards the house to your spouse, your name remains on the mortgage loan until your spouse actively assumes the mortgage under Md. Code Ann., Fin. Inst. § 11-522 or refinances the loan into their sole name. Until the lender formally releases you, you remain legally responsible for missed payments.
Does it matter whose name is on the deed?
If the house was bought during the marriage, it is generally considered marital property subject to division, regardless of whether only one spouse's name is on the official deed.
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