California is a community property state, which means that any property acquired during the marriage is equally owned by the parties. In other words, each spouse has a 50% ownership interest in community property, with equal rights of management and control…but subject to intraspousal fiduciary obligations. (Family Code §§721(b), 1100 et seq.). As soon as a couple makes the decision to separate and move forward with a divorce, the BIG questions is, “who will continue to live in the house?” If the couple is unable to reach an agreement, the court can assign the temporary possession of the Family Residence to one spouse.
During the pendency of a marital dissolution proceeding, a court may make orders ex parte or on noticed motion that affect the temporary use, possession, and control of the parties’ real or personal property, including determining the payment of liens or encumbrances. (Family Code §6324). If a couple is unable to mutually agree on who may continue to live in the Family Residence and who will move out, or if issues arise with a current living arrangement, a court order may be necessary to resolve the issue of use, possession and control.
However, with this privilege comes great responsibility. In cases where a spouse is given temporary use and occupancy of their family residence, they have a fiduciary duty to preserve and maintain the property. There are cases where the California courts held the failure of the spouse with temporary occupancy and responsibility to maintain the mortgage payments breached their fiduciary duty in deliberately failing to pay the mortgage and refusing to put the property up for sale. The consequences for breaching one’s fiduciary duty are serious, including an award of the lost equity and attorney fees to the non-breaching spouse. (Family Code §1100(g), (h)).