Maryland Divorce With a House — Your Options (2026)

The family home is typically the largest marital asset in a Maryland divorce. Maryland courts have several tools — including the unique Use and Possession Order — that affect how the home is handled.

Is the Home Marital Property?

Purchased during the marriage with marital funds: Marital property — subject to equitable division.

Owned before the marriage by one spouse: Separate property — generally protected from division. However, if marital income was used to pay the mortgage, any appreciation or equity attributable to those payments may become a marital interest.

Inherited home: Separate property — excluded from marital estate.

Both names on the deed (but one party owned before): Does not automatically convert to marital property, but can be a factor.

The Use and Possession Order (Unique to Maryland)

Maryland courts have the authority to grant a Use and Possession Order — allowing the custodial parent and minor children to continue residing in the family home for up to 3 years after the Judgment of Absolute Divorce, even if the home is owned by (or equally owned by) the other spouse.

Key features:

• Available only when the home is the family home and there are minor children
• The occupying spouse may be required to pay fair rental value to the other spouse
• Mortgage, taxes, and insurance allocation are specified in the order
• The non-occupying spouse's credit may still be at risk if they remain on the mortgage — which is why refinancing provisions are critical

If you are the non-custodial parent and fear a Use and Possession Order keeping you from selling: address this explicitly in your Settlement Agreement.

Option 1 — One Spouse Keeps the Home

Settlement Agreement must include:

• Full address and legal description
• Agreed fair market value (appraisal, comparable sales, or agreed figure)
• Equity calculation: agreed value – mortgage payoff = total equity
• Each spouse's share of equity (equitable — note no 50/50 presumption)
• Buyout method: cash, offset against retirement or other assets, or deferred
• Mandatory refinancing deadline — keeping spouse refinances into their name alone within a set period (typically 60–90 days after Judgment)
• Fallback: If refinancing fails, home is listed for sale
• Who pays mortgage, taxes, insurance, HOA, and maintenance until refinancing
• Deed transfer: Leaving spouse signs Special Warranty Deed after refinancing → record at county land records

Recording the Deed in Maryland

Maryland counties record real estate at the land records office — located at the Circuit Court for most counties.

After refinancing:

1. Prepare a Special Warranty Deed (standard for divorce transfers in Maryland)
2. Leaving spouse signs and notarizes
3. Record at the land records office in the county where the property is located
4. Pay recording fees ($40–$100)
5. Transfer tax exemption: Transfers between spouses incident to a divorce are typically exempt from Maryland transfer taxes — confirm with the land records clerk

Option 2 — Sell and Split Proceeds

Settlement Agreement must include:

• Each spouse's percentage of net proceeds (equitable — not necessarily 50/50)
• Listing timeline (within X days of the Judgment)
• Agent selection and listing price method
• Who pays carrying costs during listing
• Who occupies and whether occupancy compensation applies
• Price reduction trigger and frequency
• Consequences if one party refuses to cooperate with sale

Option 3 — Deferred Sale

Settlement Agreement must include:

• Duration of deferral (specific end date or event)
• Who pays all carrying costs during deferral
• Occupancy compensation provisions
• Major repair authorization and payment
• Sale process and proceeds split at end of deferral
• Mortgage default provisions

Separate Property Home — What to Document

If the home is separate property (owned before marriage or inherited):

• Document the pre-marital ownership with the original deed
• Document any mortgage balance at the date of marriage
• Track all mortgage payments made from marital income (these can create a marital interest in appreciation)
• Address the home explicitly in the Settlement Agreement to confirm it stays with the original owner and the other spouse waives any claim

Last reviewed: March 2026 | Use and Possession Order available up to 3 years for custodial parent | Special Warranty Deed recorded at county land records | Transfer tax exemption for divorce transfers

Last reviewed: March 2026 · Verify current fees and forms with your local court before filing.