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Sally, Joe, Bill, Bob Barker and Mark Cuban! Plus Joint Title Post-Divorce

Post Divorce Issues

Have you ever had a case where the parties deferred the sale of the real property, or they remained on title together after the divorce was over? 

 

If you have had a case where the parties did sell after the divorce was final or they chose to remain in title to the property after the divorce was final, your clients may encounter further headaches down the road. 

 

As an example, we are going to talk about Sally and Joe who filed for divorce in 2008 and it was finalized the same year without selling the property. Sally remained in the home and Joe moved away. Now lets see two scenarios for remaining on title post divorce. 

 

First example: in 2015 Sally tells Joe she must move to Ohio to take care of her mother. Joe wants to sell the house but Sally really wants to lease it to her former co-worker, a down on her luck, single mother. Reluctantly Joe agrees with Sally to lease the home to the former co-worker instead of selling. The lease was executed in 2015 and that same year the former co-worker hosted a birthday party at the house. Someone slips and falls into the pool receiving serious injuries. 

 

Second example: In 2020, twelve years after the divorce was finalized, Sally and her new spouse Bill enter into a contract to sell the home to Bob Barker (the Game Show Host!) The title company prepares the file and sends over a preliminary title report to Sally and Bill. It reflects that Sally and Joe are the owners of the property. Bill knows nothing about Joe or that he was even married to Sally. Bill demands to know why Joe is listed on the title. Sally tells him that is her ex-husband and now Sally wants to know why she has to sell the house with Joe’s cooperation. Sally hasn’t spoken to Joe in 12 years! The story gets more hairy if there is a dispute over the proceeds from the sale. And that is another email for another day!

 

So, what does this have to do with a divorce case? 

 

When title is not severed, liability is still hanging in the balance. 

 

  • What if the landlord, in the first example above, is sued for injuries caused? How might an action brought against parties who were not on the same page about the lease in the first place play out? 
  • What if the party who was not awarded the house wasn’t aware that their ex-spouse’s homeowners insurance had lapsed? 
  • What if there wasn’t an umbrella policy and the Plaintiff was awarded a judgment that cripples the parties financially? 
  • In the second example, what if Joe does not want to cooperate with the sale after the divorce and Bob Barker finds out? Joe could cause a lawsuit to be brought by Bob against Sally and Joe for breach of contract by the sellers. 
  • In the second example, what if Sally and Joe are already under contract to purchase their new dream home from Mark Cuban! Mr. Cuban then finds out that their contract with Bob Barker might not close because Sally’s ex-husband isn’t cooperating with the sale. Mr. Cuban is now angry at Sally and Bill who cannot close on the sale of his home so he can move on down the road.  What does anyone do in this situation?

 

At the very least, both Sally and Joe would have to spend significant time and money to fight any of these scenarios in court, maybe even Bill. At the worst, this lawsuit could financially and psychologically ruin them. 

 

While these are fictitious stories and names are only used to throw in humor. In real life these types of scenarios happen often. Thus, holding title to real property comes with liability. The scenarios are endless. 

 

So when you have a case where the property is not sold and title is held jointly, I suggest ensuring the parties record a new deed — or at the very least, disclose the risks involved if they do not severe title prior to divorce.

 

As always, please feel free to reach out to me with any questions about the real property matters in your case.

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