Avoiding Litigation. The Married Seller Edition.

 

This has been an incredible selling market. Real estate professionals are signing up their sellers, listing the property, and procuring offers in contract in short time periods. Time is of the essence, but it is important to make sure that you dot your “I’s and cross your “T’s” when it comes to not only the purchase and sale agreement but also the listing agreement. Why is this important? Because in Florida, a real estate transaction may implode by a buyer’s agent’s or seller’s agent’s failure to require that the seller’s spouse participate in the signing of the prerequisite sale documents.

Florida has strong constitutional protections concerning a spouse devising the homestead property away from the other spouse and any minor children. If a seller is the only party on the title to homestead the property, the other spouse’s signature will be required on the deed to transfer or convey the property. Additionally, some title underwriters may require the spouse to sign off on the sale of non-homestead property because the property may become or still is homestead property. For example, if a divorce proceeding is initiated, and one spouse moves to another residence. Just because one spouse currently lives at another residence does not mean the homestead property lost its homestead status! Another situation is when a spouse no longer desires to sell the property or otherwise cooperate with the sale. If the seller’s spouse has no liability on the sale documents (i.e., the Contract) why would the spouse cooperate? If a seller’s spouse will not participate to spite the selling spouse, a buyer under the contract could claim the seller’s inability to procure the spouse’s signature as a title defect, and then may elect to cancel the contract and walk away. Or the buyer may hold the seller in default of the sales contract and proceed with contractual dispute resolution procedures. Potentially, litigation could be filed and expose each party to liability for prevailing attorney’s fees and costs.

As realtors and brokers, you want to assist your respective clients and help them avoid thousands of dollars in litigation expense. You also do not want to spend time and money on a transaction listing a seller’s property for sale only to find out the seller is unable to convey marketable title to the buyer. Furthermore, brokers and agents do not want to lose out on an earned commission. So what is the safest way to avoid unnecessary disputes and potential litigation? One simple question is all you need to ask a seller: are you married? If the seller is married, then request that the spouse be added to the listing agreement, and take it one step further and add the seller’s spouse to the purchase and sale contract. This will not guarantee a seller’s spouse’s cooperation, but will at least financially incentivize all interested parties to sign at closing.

If you do not include a seller’s spouse in the listing agreement or the purchase agreement to real property which is titled only in one spouse’s name, you do run the risk that all of your hard work may dissipate in a lover’s quarrel or divorce. Note this is a complicated matter, and this blog is only a simplified and short synopsis. If you have any further questions about the foregoing, we strongly urge you to consult with your local real estate attorney.

 

Sincerely,

Michael Schuchat, Esq. mschuchat@berlinpatten.com
Berlin Patten Ebling, PLLC

This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.

All rights reserved. This copyrighted material may not be re-published without permission. Links are encouraged.

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