Why divorcing spouses cannot stake claim on in-laws’ homes

Couples who use a parents’ property as their matrimonial homes cannot stake claims over it because they are self-evidently not the owners.

The rationale is the same as setting up a matrimonial home in a rented house – the fact that a married couple lived there does not affect the landlord’s rights over his or her real estate.

The rights of couples who live in a parents’ home arose in an important ruling by the Appellate Division of the High Court, which found that an estranged former daughter-in-law had no claims over her former in-laws’ $5 million house.

What made the case unusual was that the wealthy patriarch had gifted the property to his wife and two sons more than a decade before one of the sons married.

The couple lived in the house for about three years before they fell out and filed for divorce.

The wife then staked a claim to a one-third share of the home, a stake then valued at over $1.7 million. The lower court allowed her to include her ex-husband’s share of the home in the matrimonial pool, but this ruling was reversed on appeal.

The Appeals Court found that because the husband was already a part owner long before the marriage, his stake would be deemed as a pre-marital asset that would not be up for sharing.

And since the wife did not do anything extra that would justify her claim, the court added that mere residence and a part interest in the home would not be sufficient to turn the property into the couple’s “matrimonial home”.

This was especially so when the actual “master and mistress” of the bungalow were the patriarch and his wife, who allowed their son and his wife to live there.

They also paid most of the household expenses, including renovation work done for the benefit of the newly-weds.

The outcome might have been different if the estranged spouse was the one who had paid for most of the bills, such as in the following case.

Claim on an inherited home

A woman inherited from her late mother two adjacent houses that were worth over $6 million in total. If she had kept these houses to herself, no one could have a share in the properties.

Unfortunately, she used both houses as matrimonial homes after she and her then husband sold off their own property.

One of the houses was in a dilapidated state when they moved in and they had to use the sale proceeds from their previous home to renovate it.

The other house was given to the wife a few years later to provide more personal space for their family, especially when their two children were growing up.

The husband, who was the sole breadwinner, spent a substantial sum to renovate and merge the two houses into a single, large matrimonial home.

More money was spent later to build a common kitchen and dining area in the second house and convert the kitchen in the first house to study rooms.

Although the houses were originally gifted to the wife solely, she chose to use them as the matrimonial home. Moreover, the husband had substantially improved the properties during the marriage.

As a result, the High Court found that the two houses were clearly the couple’s matrimonial home and should be counted in their asset pool.

The court ruled that the couple’s contribution was in the ratio of 60 to 40 in the wife’s favour, so the husband could stake claim to 40 per cent of the home, which amounted to $2.4 million.

As the couple had cash and other assets worth $2.7 million, the husband’s collective share was $3.5 million while his ex-wife kept the remaining $5.2 million.

While no one plans for a divorce when getting married, it pays for couples to understand their rights so that they don’t feel they are shortchanged when things go wrong.

Tan Ooi Boon is the Invest Editor of The Straits Times

Source: The Straits Times © SPH Media Limited. Permission required for reproduction.

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