Colorado Divorce Decisions blog
Keeping the house for the kids: how a deferred sale works in Colorado
It is legal, it is common, and it is where the most arguments happen later. Here is everything the decree has to say.
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Colorado’s property statute lets the court award the family home, or the right to live in it for a reasonable period, to the parent the children live with most of the time. Couples use it to keep the kids in place until a trigger: graduation, a set number of years, remarriage, or a date. Both usually stay on title and on the loan, so every term has to be written down.
What the decree must say
- Who pays the mortgage, taxes, insurance, HOA and repairs over a set amount, and whether those are credited back at sale.
- How principal paid after the decree and improvements are credited.
- The exact trigger and what happens if it is disputed.
- Who picks the agent, how the price is set, the reduction schedule, and how proceeds are split.
Tax protection for the spouse who leaves
If the decree lets the in-spouse use the home as their main home, the IRS counts that as the out-spouse’s use, preserving their $250,000 exclusion at the eventual sale.
The credit exposure
The joint mortgage stays on the leaving spouse’s credit. Lenders can exclude it from their debt ratio only if the other borrower has paid it for 12 documented months with no lates. One 30-day late hits both reports.
Is it the right call?
Run the numbers on carrying the house for the deferral period, and the numbers on what the leaving spouse can buy with a $350,000 contingent liability on their report. Sometimes the honest answer is to sell now and rent near the school. Keep the house.
Plain-language education from a Colorado real estate group, not legal, tax or financial advice. Numbers are as of September 2026. Disclaimer.
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Divorce Decisions™: Colorado divorce workshops and education. Real estate services provided by The Kenna Group at Keller Williams DTC. Not legal, tax, lending or financial advice.