Who Keeps the House in a Rhode Island Divorce? Buying Out, Selling, or Co-Owning

For most couples, the family home is their largest financial asset and holds the most emotional value. Deciding what happens to the house is often the hardest part of a divorce. In Rhode Island, property division is based on 'equitable distribution.' This means the judge will decide what is fair based on factors like the length of the marriage, each spouse's financial contribution, and who has primary custody of the children. It is highly important to understand your legal options for the marital home before making an emotional decision.

Step-by-Step Process in Rhode Island

Whether you live in Providence, Cranston, or Pawtucket, the mechanics of dealing with real estate in a divorce follow a specific legal path. Your attorney will usually file Form FC-56, Rhode Island, Family Court, Complaint for Divorce to initiate the process, and the house will be one of the primary assets listed for division.

Step 1: Calculating Home Equity Accurately

Before you can divide the house, you must know exactly what it is worth. Do not rely on internet estimates. You should hire a licensed real estate appraiser to determine the fair market value. Once you have the value, subtract the remaining mortgage balance. For example, if the house appraises for $400,000 and you owe $250,000, your total marital equity is $150,000. Under R.I. Gen. Laws § 15-5-16.1, this $150,000 is what the court will divide equitably.

Step 2: The Mechanics of a Spouse Buyout and Refinancing

If you want to keep the house, you generally have to 'buy out' your spouse's share of the equity. If the equity is $150,000 and the split is 50/50, you owe your ex $75,000. Most people do not have this in cash, so the keeping spouse must refinance the mortgage. Refinancing pays off the old joint mortgage, pays out the ex-spouse's $75,000, and leaves the house entirely in the keeping spouse's name. After refinancing, the exiting spouse must sign a Quitclaim Deed to remove their name from the property title.

Step 3: Deferred Sale Agreements (Exclusive Use)

Sometimes, it is not financially possible to buy out a spouse, but selling immediately would harm the children. In these cases, the Providence/Bristol County Family Court, Providence or the Kent County Family Court, Warwick may approve a 'deferred sale.' This allows the parent with primary custody to stay in the home for a set period-usually until the youngest child graduates from high school. After that trigger event, the house is sold, and the proceeds are split.

Step 4: Handling Underwater Mortgages

If you owe more on the house than it is currently worth, the home is 'underwater' (it has negative equity). In this scenario, there are no profits to split. You and your spouse must decide whether to continue co-owning it, bring money to the closing table to sell it, or let it go into foreclosure. A skilled divorce lawyer can help negotiate a settlement that protects your credit score during this difficult process.

Step 5: Reaching an Agreement

The Rhode Island Supreme Court precedent in Ruffel v. Ruffel, 900 A.2d 1178 (RI Supreme Court 2006) shows that courts prefer spouses to reach a fair agreement on their own. If you cannot agree, a judge will force the sale of the home and divide the proceeds according to the law.

How Much Does it Cost in Rhode Island?

Dealing with real estate in a divorce involves several professional fees beyond just your lawyer.

How Long Does the Process Take?

If both spouses agree to sell the house, it can be listed immediately, and the process takes as long as a normal real estate transaction (usually 2 to 4 months). If one spouse is buying out the other, the refinancing process usually takes 30 to 60 days. However, if the couple is fighting over the house in court, the divorce litigation can drag on for a year or more before a judge finally issues an order to sell.

Frequently Asked Questions (FAQ)