Dividing Real Estate in Virginia During Divorce: A Beginner’s Guide

This topic is part of Property Division in Fairfax and Loudoun.

In this article

1. First: Is the Home Marital, Separate, or Both?
2. Retitling the Home Into Both Names
3. Rental and Investment Property
4. Second: What Is the Home Worth?
5. Third: What the Court Can Do With the Home
6. While the Divorce Is Pending
7. The Buyout in Practice
8. Speak With a Property Division Attorney

For many Northern Virginia families, the house is the largest asset in the marriage and the hardest one to divide. One spouse wants to keep it for the children. The other needs the equity to start over. Neither may be able to carry the mortgage alone. Rental and investment properties raise the same questions, often with more money at stake. How a Virginia court treats real estate in a divorce depends on three questions, in order: whose property it is, what it is worth, and what the court can do with it.

I am Jason A. Weis, an attorney with Curran Moher Weis in Fairfax. I represent spouses in Fairfax, Loudoun, and elsewhere in Northern Virginia in divorces where the residence, and often a portfolio of other real estate, is in dispute.

First: Is the Home Marital, Separate, or Both?

Property acquired by either spouse during the marriage and before the last separation is presumed to be marital, and the spouse who claims otherwise must rebut that presumption. Va. Code § 20-107.3(A); Lambert v. Lambert, 6 Va. App. 94 (1988). A home bought during the marriage with marital earnings is ordinarily marital property, regardless of whose name is on the deed.

The harder cases involve separate money. A spouse may have owned the house before the marriage, used an inheritance or premarital savings for the down payment, or paid down the mortgage with funds from a separate source. In those cases the home may be part marital and part separate. A spouse claiming a separate share must identify that share and trace it directly to a separate source by a preponderance of the evidence; if the tracing fails, the share is treated as marital. Rahbaran v. Rahbaran, 26 Va. App. 195 (1997). Tracing does not require that the separate funds were kept in their own account. A separate deposit that passed briefly through a joint account can still be traced to the purchase it funded. Holden v. Holden, 31 Va. App. 24 (1999).

The chain of proof has limits. Where separate money was rolled through a series of home purchases and commingled accounts over many years, and the records cannot show its path through each step, the claim fails and the home is marital in its entirety. Barker v. Barker, 27 Va. App. 519 (1998). Closing statements, deposit records, and account statements from each transaction are what decide these claims, and they are much easier to collect before a case begins than after.

Retitling the Home Into Both Names

A spouse who owned the home before the marriage and later deeded it into both names faces a specific rule. Separate property retitled in the parties’ joint names is deemed transmuted to marital property, but it keeps its original classification to the extent it is retraceable by a preponderance of the evidence and was not a gift. Va. Code § 20-107.3(A)(3)(f). No presumption of a gift arises from the retitling itself; the spouse claiming a gift must prove it by clear and convincing evidence. Utsch v. Utsch, 266 Va. 124 (2003). The deed matters. In Utsch, a deed captioned as a deed of gift, reciting love and affection as consideration and claiming the recordation-tax exemption for gifts, was itself sufficient proof that the transfer was a gift. Before advising either spouse on a retitled home, I obtain the recorded deed.

Rental and Investment Property

The same classification rules apply to rental and investment real estate. One further rule matters more here: an increase in the value of separate property during the marriage is marital only to the extent that marital property or the personal efforts of either spouse contributed to it, and personal efforts count only if they were significant and resulted in substantial appreciation. Va. Code § 20-107.3(A)(3)(a). The spouse claiming a marital share bears the initial burden of proving the contribution and the increase. A premarital rental property that one spouse managed, improved, or refinanced with marital funds during the marriage may therefore carry a marital component even though the property itself remains separate. For larger portfolios, see High-Asset Divorce in Virginia.

Second: What Is the Home Worth?

Unless the court orders otherwise, property is valued as of the date of the evidentiary hearing on valuation. A party may ask the court, for good cause, to use a different valuation date, but the motion must be made no less than 21 days before that hearing. Va. Code § 20-107.3(A).

In a contested case, value is proven through a qualified appraiser who can testify to the method and the comparable sales. Online automated estimates are not a substitute. Where the spouses’ appraisals differ, the court decides which is more credible, and the appraiser’s assumptions about condition, improvements, and the effective date of the report often decide that question. Mortgage balances, home equity lines, and the cost of sale also bear on how much equity there is to divide.

Third: What the Court Can Do With the Home

For jointly owned marital property, the court has three main options under Va. Code § 20-107.3(C):

• Divide or transfer it. The court may divide or transfer jointly owned marital property, or order its division or transfer.
• Allow a buyout. The court may permit either party to purchase the other’s interest and direct how the proceeds are allocated, provided the purchasing party agrees to assume the debt secured by the property.
• Order a sale. The court may order the home sold, by private sale by the parties, through an agent the court directs, or by public sale, without a separate partition suit.

The court may also grant a monetary award to balance the overall division, payable in a lump sum or over time, and the paying spouse may satisfy it by conveying property with the court’s approval. Va. Code § 20-107.3(D). For how the home fits into the division of the rest of the estate, see property division in Fairfax and Loudoun.

While the Divorce Is Pending

Before the final hearing, the court may award one spouse exclusive use and possession of the family residence, order a party to pay secured or unsecured debts incurred jointly or by either party, and enter orders to preserve the estate so it is available to satisfy the final decree. Va. Code § 20-103. Who lives in the house and who pays the mortgage during the case can shape the outcome, both practically and in the court’s view of each spouse’s contributions. Those arrangements should be made deliberately, and in writing, early.

The Buyout in Practice

Most cases are resolved by agreement. Spouses can agree to sell, to a buyout, or, less often, to continue owning the home together for a defined period, for example until the youngest child finishes school. A continued co-ownership arrangement needs especially careful drafting, because it ties the former spouses together financially for years. A buyout is the most common way one spouse keeps the home. A buyout provision should address, at a minimum:

• the value used and how the departing spouse’s share of the equity is calculated;
• a deadline for the retaining spouse to refinance and remove the other spouse from the mortgage, and what happens if the refinance is not approved, which is usually a listing and sale on stated terms;
• who pays the mortgage, taxes, insurance, and repairs until the refinance closes;
• when the deed is signed and delivered, and by whom it is prepared; and
• how any credit for a separate contribution or post-separation payments is handled.

The refinance is where many buyouts fail. A lender will look at the retaining spouse’s own income and credit. Support income may count toward qualifying, but only on the lender’s terms, and a self-employed spouse may face additional documentation requirements. A provision that assumes a refinance will be approved, without a fallback, invites a second lawsuit. Tax consequences of a sale or transfer should be reviewed with a tax adviser before the agreement is signed. See separation and property settlement agreements.

Speak With a Property Division Attorney

If the marital home or other real estate is at issue in your divorce in Fairfax, Loudoun, or elsewhere in Northern Virginia, call me at (571) 328-5020 or request a consultation.

This article provides general information about Virginia law and is not legal advice. Contacting me does not create an attorney-client relationship.

This article provides general information about Virginia law and is not legal advice. Reading it does not create an attorney-client relationship. The application of the law depends on the specific facts of each case.