Challenges can arise during real estate transactions involving divorced couples. These challenges can include issues with obtaining a deed from an ex-spouse and addressing judgments and liens associated with the property. It is recommended to obtain documentation related to any divorces early in the transaction process to address these issues in advance.
Video Transcript
Divorces. Shockingly you might not be aware of that some divorces–don't go–well, they just don't go well. So when they don't go well and later we find in the title that the property is still owned by husband and wife even though they've been divorced the person who may have been awarded the property in the divorce comes to us saying no wait a minute. I already have that property and then we have to explain we need to get a deed from your ex-spouse, which can be a little challenging because we have no idea what they may have been fighting about over the last couple years. So if they've been fighting about the orange spatula for a while and now all of a sudden, I've got to get a deed from now, it doesn't always go well.
Exactly… typically communication isn't what it was. Sometimes we run into what we call extortion payments right where the others the X spouse is required to sign the deed over to the other spouse and the Judgment of divorce says you have to do this, but they won't because they use it as some point of leverage.
So you bring up a good point. Okay, you're divorced only when the judge has signed off on the judgment of divorce. Almost divorced is divorced, right? So I'm separated. You're still married. I haven't seen that blankety blank in five years. Probably still married. Okay, but it's not until that judgment's been signed and then we're looking for a couple things in that judgment, right? We're looking for a judgment lien. So, we're looking for something the judgment that says that maybe the ex-wife gets the property, but the ex-husband still owes $10,000 and that 10,000 dollars is a lien on the property. So that's one thing that we're looking for and what if there was one we're going to require that the lien gets paid at the closing from the proceeds of the sale of the house or get a discharge.
Right—if it has been paying right and one of the challenges is when they set that amount made me have been a few years ago. The property may have been worth more money. And now all of a sudden there was supposed to be equity and there isn't. Well that 10,000 lien still has to get paid unless the other spouse agrees that it doesn't have to get paid.
Yeah and then ownership. Ownership transfer, because a lot of times the divorce decree says the wife will end up with the property for example, but there's no follow-up deed post-divorce to clear it up in the chain of title. I know it drives us and other agents nuts and lenders but that's the other thing that we run into all the time is we have to get a deed or talk about filing the judgment and divorce in lieu of a deed. So sometimes an attorney will include a provision in the judgment of divorce that says if one of the parties doesn't cooperate you can record the judgment of divorce in place of the deed, which a lot of people obviously don't like to do because it's got a lot of other things in it, so they don't want that necessarily part of the property records. So another thing to get way ahead of in a transaction is if there's a divorce, get the documentation to the parties or let's examine them and let's work through those issues as much as we can in advance.
