Selling Property While Going Through a Divorce: When One Spouse is Uncooperative
Property held in the name of only one spouse may still be considered marital property and be subject to martial division following separation or divorce. This news was not welcomed by a seller I was advising when he learned that because of this, his uncooperative spouse’s cooperation would be required for him to sell his property before their divorce is final unless he had a court order divesting her marital interest. The seller was especially unhappy since the property was purchased before marriage, the title was only in his name, and he had already entered into a contract to sell the property. The seller signed a contract to sell the property without the joinder of his spouse under the misunderstanding that his soon-to-be ex-spouse did not have to join in the contract.
In this particular case the parties (1) were separated, and (2) an Equitable Distribution Order had been entered giving “control” of the property to the title-owning spouse, and (3) the non-title owning spouse was not interested in assisting in the sale of the property.
After reviewing the details of the transaction, the title insurance company required the joinder of both spouses in the conveyance if it was to occur before the divorce was final. Otherwise, the marital interest of his wife had to be addressed on the title in some way. One option when the non-title-holding spouse is uncooperative is to seek an appropriate court order in which the court itself enters an order containing specific conveyance language transferring/releasing all interest in the subject property to the spouse attempting to sell the property.
In addition to the delay that occurred, the potential purchaser cried foul as the seller had contracted to sell the property for which they alone could not contract to sell. The buyer had invested dollars in preparing the purchase the property for appraisals, home inspections and other expenses for which they expected reimbursement. The terms of the contract controlled regarding damages/rights of the parties, but the truth is that the delay and frustration may have been avoided completely had the seller, title-owning spouse consulted a real estate attorney before contracting to sell their home. The old saying of an “ounce of prevention is worth a pound of cure” comes to mind in this case.
If you - or your client, if you are a real estate agent - are facing a similar situation, please consider contacting an experienced team of real property lawyers. The call may be helpful in avoiding delays and conflicts that these types of potential title problems cause.
Published by Wendy Hughes on December 1, 2016