Foreclosure and divorce: What happens to the house?

Introduction

A divorce not only brings emotional challenges but often also financial ones. Especially when joint property is involved, the question arises: What happens to the house? In Switzerland, under certain circumstances, forced auction can occur - for example, if the parties cannot agree on the sale or division of the property.

Unlike a traditional debt enforcement, the auction in divorce cases is not based on debts to creditors but on the legal dissolution of joint ownership. The procedure offers a legally regulated way to clarify ownership relations and fairly divide the proceeds.

Legal Background in Switzerland

The basis for forced auctions in the context of a divorce is the Civil Code (ZGB) in conjunction with the Federal Act on Debt Enforcement and Bankruptcy (SchKG). When two divorced spouses jointly own a house, it is usually registered as joint ownership in the land register.

If the parties cannot agree on an amicable solution - that is, sale, payout, or takeover - the court can, at the request of one party, order a partition auction. This is carried out by the relevant debt enforcement office of the canton, e.g., in the Canton of Zurich (ZH) or Bern (BE), and is publicly announced.

Partition Auction vs. Traditional Forced Auction

A partition auction is not legally considered a debt enforcement in the strict sense but rather a judicial realization of joint property. This means:

• There is no debt to third parties; the sale is solely for the division of assets.
• Both parties are entitled to their share of the sale proceeds, after deducting any mortgages.
• The procedure can only be initiated by a judicial decision or at the request of a joint owner.

This distinction is significant as it shows that the auction is not necessarily a sign of financial hardship - but rather an organized, legally secured solution in case of disagreement.

The Process of a Partition Auction

The procedure follows a clear sequence regulated by the SchKG and cantonal regulations. The process is managed by the debt enforcement office of the respective location - for example, in Lucerne (LU), Vaud (VD), or Ticino (TI) - and proceeds in several steps:

1. Application: One of the joint owners applies to the court for the dissolution of joint ownership through a public auction.
2. Valuation: The property is appraised by experts or the office. This appraisal forms the basis for the starting bid.
3. Publication: The auction is announced in the cantonal official gazette or on platforms such as LocalAuction.ch.
4. Auction Date: On the specified date, the property is auctioned publicly. Bidders must identify themselves and possibly provide a security deposit.
5. Award and Distribution: After the award, the proceeds - after deducting any mortgages or enforcement costs - are divided between the parties.

“The partition auction is not a defeat but a solution - it enables both parties to assert their claims legally and transparently.”

Financial and Tax Consequences

The sale proceeds are divided after deducting mortgage debts, procedural costs, and any fees. Tax aspects must be considered, particularly the property gains tax, which varies by canton. In Aargau (AG) and Basel-Landschaft (BL), for example, different regulations apply regarding holding period and self-use.

A common misconception: Even if a property is auctioned below the estimated market value, the award price is considered the tax-relevant sale value. Therefore, it is advisable to have the process professionally accompanied - legally and tax-wise.

How to Avoid Forced Auctions?

In many cases, a partition auction can be prevented by early agreement. The most common alternatives are:

• Payout: One party takes over the property and pays the other half of the market value.
• Agreement Sale: The property is sold jointly, often resulting in a higher price than at auction.
• Temporary Use: One party temporarily remains in the house while the other is compensated through rent or participation in later sales.

However, these solutions require mutual trust and clear communication - an aspect often missing in emotionally charged situations. If no agreement can be reached, the auction remains the legally cleanest way.

Role of LocalAuction.ch in the Process

LocalAuction.ch is the central platform to make official real estate auctions in Switzerland transparent and accessible. It not only shows all ongoing procedures but also provides insights into market values, documents, and location information. This way, interested parties can make informed decisions early on.

For couples, lawyers, and investors, this transparency creates a fair basis: All parties see the same information, the same deadlines, and have the same opportunities - a significant improvement over previous, hard-to-access procedures.

Conclusion

A divorce does not necessarily have to lead to financial or emotional loss. The partition auction offers a legally regulated, fair way to dissolve joint property when no agreement can be reached. It creates clarity, protects the interests of both sides, and ensures that the proceeds are distributed objectively.

With modern platforms like LocalAuction.ch, this process is today clearer, more structured, and more efficient than ever before. Thus, the forced auction - when understood correctly - becomes an instrument of justice, not of conflict.

---

LocalAuction.ch - The platform for official real estate auctions in Switzerland. Transparent. Efficient. Legally compliant.