Most people assume a divorcing couple has only two choices when it comes to the family home: one spouse buys out the other, or the house gets sold and the proceeds are split. But there is a third path that more couples are exploring, especially with today’s mortgage rates making it harder to refinance into a single income — continuing to jointly own the home after the divorce is final.
A Hawaii court will not order this arrangement in a contested case. Judges are required to equitably divide marital property, and that generally means that the asset is sold and proceeds distributed or an asset ends up with one owner. But when both parties agree, continued co-ownership can be built into the Marital Settlement Agreement and can work well, particularly when children are involved or the local real estate market makes a quick sale unappealing.
Before agreeing to stay on title together, here are the points I encourage my clients to think through carefully.
Why Couples Choose to Stay Co-Owners
There are usually one or more of these reasons behind the decision:
- Stability for the kids. Keeping children in the same home and school district during and after the divorce can ease an already difficult transition.
- Market timing. If home values or interest rates are working against a sale right now, waiting a year or two — or waiting until the kids finish school — may result in a better outcome for both parties.
- Refinancing isn’t realistic. On one income, especially in a high-cost market like Hawaii, neither spouse may qualify to refinance the mortgage solely in their own name.
- Capturing future appreciation. Co-owners can both benefit if the property continues to appreciate, rather than one spouse cashing out early.
The Risks You’re Taking On
Co-ownership after divorce isn’t free of downsides, and clients should go in with clear eyes about what they’re agreeing to.
You remain financially tied to your ex. If your name stays on the mortgage, a missed payment by your co-owner shows up on your credit report too — regardless of what your settlement agreement says about who is responsible. Lenders don’t recognize divorce decrees; they recognize the note you signed.
Ongoing decisions require ongoing cooperation. Who pays for a new roof? Who decides if the tenant moves out? Disagreements over maintenance, repairs, and use of the property can resurface old conflict at exactly the moment both parties are trying to move on.
Ending the arrangement later can be its own legal project. If one party wants out in three years and the other doesn’t, you may be right back in a negotiation — or litigation — over how to unwind the co-ownership.
Tax and title consequences follow you. Capital gains exclusions, mortgage interest deductions, and property tax treatment can all be affected by how title is held and how long each party remains an owner. This is an area where your divorce attorney should be working alongside a CPA or tax advisor.
What Belongs in the Agreement
If co-ownership is the right call for your situation, the settlement agreement needs to do far more than say “the parties will continue to own the home jointly.” At a minimum, it should address:
- How title will be held — joint tenancy or tenancy in common, and what happens to each party’s share on death.
- Who lives in the home, and whether that party pays the other rent or a credit toward their equity share.
- How expenses are split — mortgage, property tax, insurance, and maintenance — and what happens if one party stops paying.
- A clear decision-making process for repairs, improvements, and any refinancing.
- A defined exit strategy — a trigger date, a triggering event (remarriage, a child graduating, one party wanting to sell), and the mechanics of a buyout or sale when that day comes.
- A dispute resolution process so a disagreement over the house doesn’t automatically mean a return to court.
I strongly recommend that any co-ownership arrangement be documented in a standalone operating agreement, attached to and incorporated into the Marital Settlement Agreement, so both the intent and the mechanics are legally enforceable — not just assumed.
A Hawaii-Specific Consideration
For couples in Hawaii, real estate values and limited inventory can make the decision to hold onto a shared property more attractive than it might be elsewhere — but they also raise the stakes if the arrangement goes wrong. As both a family law attorney and a Certified Divorce Real Estate Expert (CDRE), I work with divorcing clients on both sides of this decision: structuring an agreement that protects both parties if co-ownership makes sense, or managing a neutral, well-documented sale process when it doesn’t.
Talk to an Attorney Before You Decide
Continued joint ownership after divorce can be a smart, practical solution — but only when it’s built on a carefully drafted agreement rather than good intentions. If you and your former spouse are considering keeping the house, it’s worth a conversation before your settlement is finalized, not after.
Judy S. Howard, Esq. is a Hawaii family law attorney based in Waimea, focusing on divorce and pre- and postnuptial agreements. She is also a Certified Divorce Real Estate Expert (CDRE), helping divorcing couples navigate real estate decisions with clarity and neutrality.
The information provided in this blog post is for general informational purposes only and does not constitute legal advice. Reading this post does not create an attorney-client relationship between you and Judy S. Howard. Laws vary by jurisdiction and change over time, and the application of law to any particular situation requires individual legal analysis. If you need legal advice, please consult a licensed attorney directly.