NSW Separation - Husband Giving Me House as a Gift?

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2 October 2015
My husband and I are going through a separation and he wants to give me the house. I am not on the title nor on the home loan, how does he go about "gifting" it to me and what are the costs involved, etc? I was going to reach out to a solicitor but found out it's going to cost me at least $400ph!! Being single with two very small children is not an option at the moment.

Tim W

LawConnect (LawTap) Verified
28 April 2014
Is the house paid for, or is there a mortgage on it?

Tim W

LawConnect (LawTap) Verified
28 April 2014
OK. So does "giving you the house" also involve "giving" you the mortgage payments?

Tim W

LawConnect (LawTap) Verified
28 April 2014
Yes he's just handing it over and I'll be the soul owner
Short reply:

Ok, so you do understand that you could well be taking on the whole of the mortgage?
That he is proposing to just walk away from the loan (bit cheeky to think the lender will automatically and without question accept that arrangement....) is not something he can just do by a purported gift.

Long and detailed reply:
  1. Get a properly drafted property settlement.

  2. Be crystal clear about what you are getting - which could be both the house and the debt.
    Can you afford to service the loan all by yourself?

  3. Note that the title documents and the loan documents are separate things.
    The borrower(s) and the titleholder(s) might be different.

  4. The big issue for you is the loan. The transfer of the title is not the bag of spiders here.

  5. The borrower(s) have contracted with the bank (or whoever) to pay back, over time,
    the amount you have borrowed (and assorted other costs and fees, including, of course, interest.

    In return, the borrower has granted the lender certain rights over the home in the event that you don't make those payment. You often hear this called "having a security".
    This particular security is called a "mortgage" (yes, there are other kinds of securities,
    that have other names, but that's not relevant right here right now).

  6. Ignore, for a minute, whose name(s) are on the title documents, and ask yourself - who is/are the borrower(s)?
    For example, it might be just him, or just you. Or, it might be you and your estranged husband jointly.
    Or, there may be other people involved (such as in-laws). Get your loan documents out and have a look.

  7. It's the borrower(s) who has (or have) the contractual obligation to pay back the loan.
    And that's the case pretty much regardless of who lives where, and pretty much regardless whose names are on the title documents.
    A borrower can't just walk away from the loan without the agreement of the lender.

  8. Other things to consider:
  • Talk to the bank (or whatever) and let them know what's happening.
    You are hardly the first person to be in this boat, and as a general thing, banks etc
    would much rather re-arrange things a bit than have to deal with a home loan in default.
    In any event, it's probably a term of the loan contract that the borrowers have to
    notify the lender of any material change in serviceability.
    And certainly of any proposal by one borrower to try and get out of the loan.

  • Keep an eye on your non-mortgage personal debt (credit cards etc).
    Try and keep any consumer loans (eg car) under control.
    And talk to your credit providers early if things get tight.
    The last thing you need is personal bankruptcy making things more complex.

  • Work out if there are any others with interests in the house
    (such as if it is also security on a business loan, or if there is an unregistered interest,
    such as if parents put money into it to help you out).

Seek formal advice from a lawyer who knows their way around the Family Law jurisdiction.
In Family Law, working out what a fair share of an asset is can be more complex
than bald money and mathematical amounts expressed in dollars.
And much more complex than a purported gift.
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