"Having a place to go is a home, having someone to love is family, having both is a blessing."
Dutch proverb
Romantic proverbs are all very well, however, when the love in a relationship is gone and a breakup or divorce is in sight, your home is often on the line too. Under those circumstances, a more accurate saying may be, "There is no gentle way down".
Given that one in three marriages ends in divorce, and other relationships are at an even higher risk, it may be wise to keep the eventuality of separation in mind when buying a house.
For dual earners, the need to sell the house in case of a break-up nowadays seems more or less inevitable, as neither individual may be able to afford the mortgage repayments alone.
With this in mind, having a good understanding of your own earning capacity before buying a house can pay off later, and not only in a financial sense.
Of the 156.000 house sales in the Netherlands in 2014, a sizeable percentage can be attributed to couples separating. Of the number of houses sold under foreclosure last year, 65 per cent were the result of a break-up.
As a family lawyer and mediator I am well aware that an arrangement concerning the marital dwelling is almost always one of the main challenges spouses must deal with in a divorce situation.
I always take time to inform clients about the consequences they are facing such as:
› changes in ownership of the marital dwelling
› economic ownership
› deferred payments
› taxes and/or package deals
Sometimes the property has increased in value, but there are also occasions when it has unfortunately decreased.
For expat clients it is necessary to know which matrimonial law applies to their situation. I point out that sometimes it is more favourable for the parties to change their marriage contract in view of the upcoming divorce or to draw one up if they don’t have one yet!
Sometimes the most important - or only - thing a notary has to do is to make a deed regarding the choice of applicable matrimonial law in order to create a win-win situation. Mediation or collaborative divorce can offer the best conditions for achieving such an arrangement.
However, if legal advice is required in a divorce case where, for instance, the spouses live in the Netherlands in a house they own together, but divorce proceedings have been initiated in the UK, then there are more challenges than merely deciding which matrimonial law applies.
One of my Netherlands-based clients, who was facing divorce proceedings in the UK, needed to request the UK court to rule on the finances, as all efforts to reach an out-of-court settlement had proven useless.
After a wait of several months, a Financial Dispute Resolution hearing was held, whereby the judge gave his opinion based on what he would rule if the case was final hearing.
This statement was enough of a basis for both parties to reach an agreement. This way of dealing with a divorce stand-off is not uncommon in the UK.
Consequently, UK nationals with property in the Netherlands, whose divorce is already pending in the UK and in which Dutch lawyers are also involved, must take requirements from both countries into consideration.
The parties, and their Dutch and British lawyers, must accept the advice of UK judges in combination with standard Dutch calculations and formulas for (lump sum) spousal alimony - and the taxation thereof.
This will help both parties come to an out-of-court financial settlement sooner rather than later, thereby minimising the risk of further escalation.
As a family lawyer and mediator I also advise clients who wish to buy a new house after their divorce. As their paying capacity is likely to be influenced by tax law, at least during the first two years after marriage, I would like to highlight two regulations for expats who pay tax in the Netherlands and who therefore might qualify for a tax deduction on the mortgage interest.
First there is the echtscheidingsregeling, in which the spouse who has left the marital home, but is still paying mortgage interest due to a divorce covenant, can deduct the mortgage interest for a period of two years after moving out - but only for the part he or she still owns.
Then there is the bijleenregeling, which states that, if a new house and a new mortgage are to be obtained, the payment you received for your (partial ownership of the) old home must be used towards purchasing the new home, at least from a tax point of view.
As your post-divorce paying capacity might not be 100 per cent clear when buying a new house, an extra clause in the purchase contract is advisable, stating that the sale is subject to the condition that a mortgage loan will be possible, taking into account the alimony due or received pursuant to the divorce covenant or the upcoming court order.
As a family lawyer I always try to empower my clients by helping them see divorce as a transfer from married life to a life after marriage. I would therefore like to end with the ancient Greek aphorism: panta rhei, "everything flows"
After all, once you have settled a divorce and sold your (share of the) house, you will also find a new home in which you can build your new life.