Divorce and Your Home: A Title Company Perspective

Love is fleeting and sometimes ends. But the love of your home goes on and on as long as you have a mortgage. In my short time practicing divorce law there is much to consider, most notably would be the effect on any children from the marriage.  And every step should be taken to minimize any effect on them. Other things to consider would be redrawing wills, trusts, and/or any business or partnership agreements. Divorces are complex and emotionally taxing.

But today we are going to focus on the aspects regarding your property. After all, you both signed a mortgage that is going to last longer than your marriage and you are both title holders.

The first thing to note is that once you file for divorce your home will be placed under what’s called a “preliminary injunction.” The soon to be ex-husband and wife will be restricted from, transferring, encumbering, concealing, selling or otherwise disposing of the property of either or both of the parties, except in the usual course of business or for the necessities of life, without the written consent of the parties or the permission of the court.  We often get requests to sell property during a divorce proceeding.  But in order to do that we would need a letter from each attorney representing the parties and if they can’t agree we would need a court order. Obtaining that order could be a significant delay to any potential sale.  And of course it is an added expense.

The next thing to note is that the Judge in the divorce case will be dividing up the property one way or another. Often one spouse will be awarded the property. In that case title can pass to that spouse a couple of different ways. This is where it can get confusing.  Sometimes a Judge will state that a deed shall be signed from one spouse to the other. Great. But now the title company is saddled with tracking down the ex-spouse who may not really want to sign. This can be a hassle and a delay, even though it was a court order to sign the deed. We’ve had some spouses give us a really hard time even though they were required to sign it.

A Judge does have another option; he can “award” the property to one spouse or another.   In the title company world we like to see a nice clear statement that the property is awarded to one party or the other. Then the party that was awarded the property can ask for an Abstract of Divorce Decree from the clerk of the court. That Abstract will have the party’s names, the date of the judgment, a description of the real estate and it will repeat that same clear statement of the new ownership of the property.  That document, that abstract of divorce decree can be recorded in the registry of deeds and functions as a deed!  No quitclaim deed from the ex-spouse is needed.  This can be especially helpful in contentious divorces or even where one of the spouses simply can’t be found.

Lastly, the court may instruct one party or the other to make a payment of money to the spouse that was not awarded the property. Furthermore, once you remove someone from the title to the property you will have to refinance the property.  That will enable you to remove the new non-owner ex-spouse from the mortgage and title. It will also enable you to raise some funds to make any necessary payment.

Please note, if you do make some sort of payment, get some sort of receipt in writing or make a copy of any cashed check. You may need to provide proof of that payment at some later date to make sure you complied with the divorce judgment. Tracking down that kind of proof at some later date can add a costly delay to any transaction you may be trying to accomplish.

You may be breaking up with your spouse and there is a LOT to consider. But keeping an eye on a few simple things when it comes to your property can save a lot of headache later on.

As always if you have questions or would like to pick my brain on this or any other real estate issue please feel free to call me.  My office number is 207-899-4900.   We are based in Maine with four offices around the state and are here to help.

Matthew J. McDonald, Esq.

matthew@cumberlandtitle.com

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