Buying Someone Else’s Marital Home 1

What are the questions I get from the client who doesn’t want a divorce, but wants, instead, to buy a house from someone getting divorced?

Question 1: Seller Is Not Yet Divorced; Can I Still Buy the Home?

“The seller thought he was divorced, but we find out, at the closing, that he is not.” Or “The seller is still married, in the middle of his divorce. He owns a home in his own name that I want to buy. His estranged spouse is holding my purchase hostage, asking her husband for concessions in the divorce. Can I buy this house without the court’s permission?

If the home is just his (perhaps it’s premarital?), you might be able to get his spouse on board by offering her something (money?) on the side to go along with the deal. But if you can’t accomplish that, then, at least in Florida, no sale can take place and there is nothing you can do until the court rules that the home is premarital and his alone.

If she agrees, then a stipulation and court order are still needed.

If the home is in both their names, then, even on its face, he has no right to sell it, and there is nothing you can do (unless, again, you get his wife on board) until the court awards it to him in the divorce.

Question 2: The Former Spouse Can’t be Found to Clear Title Defects.

Missing Spouse

Another common issue is the missing spouse or former spouse who’s disappeared. If so, clearing any title defects can be time-consuming and delay your closing.

In almost all real estate sales, title issues arise that complicate the transaction. They must be resolved before clear title to the home can be transferred to a new owner.

Does the seller have the legal right to sell the property? Is the home’s title free of “clouds” or “defects” — such as judgments, liens or bankruptcies — that would prevent the seller from transferring “marketable” title to the buyer? How can you be sure?

No matter how small the problem, any title issue must be resolved in order to marketable title to a buyer. Title companies compile the results of their search into a report for the buyer, seller, realtor, lender, and attorney involved. In addition to the missing former spouse, here are some of the other issues that arise.

Mechanic’s Liens

Mechanic’s liens are placed against property that a general contractor — or anyone who provides services to improve the property — files before starting work. The lien ensures that the contractor is paid. Such liens are common and should be released when the contractor is paid.

If the contractor neglects to file a “satisfaction” of his lien and it remains on the property’s title, or if the lien is contested, this is a problem. The title company must determine whether the lien was filed properly and recorded in the public records, and whether notice was given in accordance with state law. Most such liens expire if not acted upon in the prescribed amount of time. While they can usually be resolved, the process can be time-consuming — for example, if the contractor, like the missing former spouse, has left the area or cannot be found — and could delay your closing.

Bankruptcy

Bankruptcies are another source of potential title issues. A seller might have bought a house while single, and then married someone with a recent bankruptcy. The title company might need to ensure not only that the new spouse had signed off on the deed, but that the bankruptcy case had been discharged. If not, you would have to petition the court to release the property from the bankruptcy process.

Child Support Lien

Another common title defect arises when a divorced spouse either forgets or doesn’t remove a lien for child support — even though the debtor may have paid the support decades ago. A child could inherit and want to sell his father’s house, but if his mother liened the home for past due support and neglected to sign a “release of judgment” when Dad paid her, the lack of clear title could still prevent the sale.

Spousal Support or Delinquent Taxes

Liens for past-due spousal support or delinquent taxes are likewise common. The American Land Title Association recently found that fraud and forgery issues between spouses have recently become more prevalent and must be resolved before a property can change hands. A typical spousal fraud issue could be that a spouse signs the other spouse’s signature on a document to either eliminate an interest or add someone else to the title. It’s similar to when a spouse signs a joint tax return for both spouses — and one spouse is not aware of what he or she is now “responsible” for.

If the seller is unaware that a lien or other encumbrance has attached to the property, it can take time to resolve the problem. The seller may have inherited the property from a trust and be unaware that one of the beneficiaries or co-owners now lives overseas and cannot be found. The co-owner’s signature would be necessary to transfer the title, and if the owner can’t be located, the legal steps to remedy the problem could take months.

If you and your spouse-to-be can agree on how to resolve your financial issues before you divorce, you are one step ahead of most others in avoiding the financial and emotional stresses that arise in the divorce process… and later. And if you want to ensure that you take all steps necessary to recognize your status as a single person again, reach out to Joryn Jenkins at Joryn@OpenPalmLaw.com or find her at OpenPalmLaw, where we are changing the way the world gets divorced!

Learn more about collaborative divorce. Follow Open Palm Law.

Need advice now? Contact Joryn!

About this week’s author, Joryn Jenkins.

Joryn, attorney and Open Palm Founder, began her own firm here in Tampa after a 14-year career in law, two of which she served as a professor of law at Stetson University. She is a recipient of the prestigious A. Sherman Christensen Award, an honor bestowed in the United States Supreme Court upon those who have provided exceptional leadership in the American Inns of Court Movement. For more information on Joryn’s professional experience, take a look at her resume.

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