It’s Not Over Until It’s Really Over…Selling Real Estate After A Divorce

As you all know, real estate professionals constantly wear an abundance of different “hats.” Working in the real estate world demands that real estate professionals have at least a minimal understanding of a variety of topics including, but not limited to, family law, wills, trusts and estates. Even with divorce rates slightly declining, it is important for real estate agents to have a basic comprehension of how divorce can affect a real estate closing.

From a closing agent’s perspective, a title search is conducted immediately after a contract is received. Upon receipt of the title commitment, there are typically two requirements from the title underwriter that signal there are divorced sellers that own the property:

    1. “Review and record a certified copy of the divorce decree and property settlement agreement, if any. Further requirements may be necessary upon the review thereof.”
    2. “Compliance with the terms and provisions of the Property Settlement Agreement between Divorced Party 1 and Divorced Party 2, as it relates to the property herein.”

Upon seeing such requirements, the closing agent will reach out to the sellers to put them on notice to begin to retrieve their divorce paperwork. But, as agents, what can you do to prepare your divorced sellers to ensure a smooth closing and avoid the need for a closing extension?

    1. Have a conversation with your seller(s) about the current ownership of the home. Title may still be vested in both of the ex-spouses names. If that is the case, both parties will have to execute the warranty deed. Not all ex-spouses have open (or friendly) communications, so if title to the property is still vested in both of their names, it might be a good idea to inform your client right away that the ex-spouse will also need to sign.
    2. Have the seller(s) pull out all documents from their divorce. A closing agent will always need to review and comply with the provisions of the Martial Settlement Agreement (the “MSA”).

a. Sometimes, the terms of the MSA have not been fully complied with and additional steps may need to be taken. For example, the MSA might call for one ex-spouse to quit claim the property to the other ex-spouse by a certain date. If there is no record of a quit claim deed having been executed and recorded, one will still need to be executed and an updated title search conducted. When a husband and wife own a property together as tenants by the entirety, they benefit from enhanced creditor protection that is lost when the tenancy by the entirety is dissolved by the divorce, and they then own the property as unmarried individuals.

b. Even if the terms of the MSA have been complied with in regards to transferring title, very frequently an ex-spouse is still owed proceeds from the sale. A majority of the time, MSA’s are pretty straightforward with how proceeds are to be disbursed. However, there are situations where a MSA is highly complicated and intricate. For example, a MSA might call for the production of receipts of for utilities, insurance, and HOA payments, with such payments being subtracted from any rental payments that one ex-spouse might have made. Both ex-spouses will need to sign a written disbursement authorization, agreeing to the split of the proceeds prior to closing. As you can imagine, this takes time; if the sellers know they have an intricate MSA, it would be wise to initiate the process as soon as the contract has been executed.

c. Lastly, it’s possible that a divorce proceeding might have been filed in Sarasota County, but the property is located in Manatee County (or some other county). In order to be compliant with the MSA and the title commitment, a certified copy of the final judgment of dissolution of marriage will need to be recorded in the county where the property is located.

If you are working with a seller that is a) in the process of getting divorced, or b) who has recently been divorced, or c) who you know has been divorced for some time, it is important to begin preparing them and the closing agent as soon as possible for the chance that additional tasks might be required in such transactions. As always, if you have any questions about how divorce can affect a real estate closing, please contact one of the attorneys at Berlin Patten Ebling, or consult with your local real estate attorney.

Sincerely,

Berlin Patten Ebling, PLLC

Article Authored by Malloy Moretti, Esq., mmoretti@berlinpatten.com

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.

www.berlinpatten.com

SARASOTA

3700 South Tamiami Trail, Suite 200, Sarasota, FL 34239   P (941) 954-9991  F (941) 954-9992

VENICE

247 Tamiami Trail South, Suite 201, Venice, FL 34285  P (941) 955-9991  F (941) 484-9992

LAKEWOOD RANCH

8433 Enterprise Circle, Suite 100, Lakewood Ranch, FL 34202   P (941) 907-9022  F (941) 907-9024

TAMPA

442 West Kennedy Boulevard, Suite 312, Tampa, FL 33606  P (813) 467-7500  F (813) 251-1662

Did you find this real estate law content useful, but need actual legal council?

Speak to a real estate attorney!

, , , , , , , ,

Don’t Get Burned By Solar Panels (Or Other Leased Items)

More and more homes are running off the power of the sun these days. Renewable energy has become a trending topic and solar panels are beginning to become prevalent in the state of Florida due to positive environmental impacts and the potential to reduce large A/C bills. Selling a house with solar panels comes with…

Be Thankful You Don’t Receive a Fowl Title Objection Notice

It seems almost obvious, only a plucked turkey would buy property without having a title search conducted to determine if a Thanksgiving feast is in the making, that is to say “title is clear”, or if there are title defects that would render the property unmarketable. This right is provided under the terms and provisions…

When Is It Critical To Review Your Estate Plan, and Why?

Just like other important life tasks, your estate plan deserves your time and attention. It’s important that you work with us to review your estate plan at least once a year. Think of this as your estate plan’s annual physical exam, and remember-prevention is the best cure. An annual exam isn’t necessarily the only time…

Color Of Authority To Sign Listing Agreements & Contracts

A contract (which, for purposes of this Blog shall focus on Listing Agreements and Residential Contracts For Sale and Purchase), is only as good as the authority of the Seller and/or Buyer to sign them. Many times, I receive calls from agents asking who has authority to sign the Listing Agreement, and then the Contract…

Insurance Considerations as Hurricane Dorian Approaches

As Florida braces for the possible threat of Hurricane Dorian, we encourage you to take all necessary precautions to ready your loved ones and homes for potential impact. If you are purchasing property, or representing a buyer of a property, that is set to close in the near future, we urge you to contact your…

No Leaks, No Damages, No Problems!

  Congratulations!  Your client entered into a new Standard FARBAR Contract on the purchase of a single family home in Sarasota.  The only contingencies are inspections and marketable title. Your client immediately hires a professional home inspector to conduct their home inspection.  During the Inspection Period the home inspector provides a “clean” report only notating…

The Repair Escrow Agreement: Having Your Cake and Eating It Too

In Florida, more likely than not a buyer will identify his or her requests for repairs early in a real property transaction and prior to closing pursuant to the standard FAR/BAR contractual provisions with little fanfare. Nonetheless, as in life and in realty, there are unforeseen circumstances where a closing extension would be difficult and…

“Options? We All Got ‘Em, We All Want ‘Em, What Do We Do With Them?”

We see option contracts for real estate purchases frequently, and we run into problems with those contracts just as frequently. In this blog we’ll go over what option contracts are, what they require to be effective, and we’ll identify some common pitfalls. An option contract is a promise by the owner of property to sell…

New Construction, Review Before You Execute

  New construction agreements can be extremely complicated and it is important that the buyer have a thorough understanding of the contract and terms prior to executing.  The construction agreements provided by developers are typically one sided and do very little to protect the buyer/owner in the event that an issue should arise.  It is…
Real Estate Firm

Your Condo Purchase-Treat It As An Investment

Condominium purchases by their nature involve property rights that are more complicated than typical single family lots or properties.  We have written several blog articles relating to investigations that buyers and their realtors should undertake prior to their purchase (links are included at the end of this blog). It is said that ownership of real…

Check Out My Title While BPE Resolves It!

One of the most frequent questions we receive from realtors involves the status of title to the property. The answer to the question “how is title” can be a source of great anxiety or a source of great relief. As a result, most people involved in any real estate transaction want the answer to that…

Not Quite Sure When A Contingency Ends? Read This!

We are fortunate to have holidays and weekends to provide us with time for relaxation, fun times with friends and family, and time away from work to recharge. Legal holidays and weekends follow a different rule for contract contingency deadlines. Throughout this week and into the weekend, while most of us will be celebrating the…

Balancing a Closing with Summer Vacation

During the summer when everyone is jet-setting on vacation, and year round as part time residents move in and out of Florida, we experience an increasing amount of closings where one or both parties cannot be physically present on the day of closing.  As this is a common occurrence, there are many ways to accomplish…

Breaking News! “RON” Remote Online Notarization is coming to Florida

  The much-anticipated remote online notarization (“RON”), is set to arrive in Florida as of January 1, 2020. Florida will join the ranks of twenty-three other states that have either passed or have pending bills that allow online notaries to perform notarizations anywhere in the world (Alabama, Florida, Idaho, Illinois, Indiana, Kentucky, Michigan, Minnesota, Mississippi,…

Hurricane Season: The Good, The Bad and Still Closing

Often, parties seeking to buy and sell real property only concern themselves with Florida’s Selling Season and do not take into consideration the other season – Hurricane Season.  Florida’s Hurricane Season is kicking off and now that Hurricane Irma is approximately two-years in the rearview mirror, Berlin Patten Ebling would like to remind our buyers…

Look Before You Leap…Into A New Listing!

Real estate transactions can often be quite complicated and confusing for even the most savvy of Sellers and their agents. You would think that the most basic and straightforward step in the process would be determining who are the owners and who has the authority to convey the property and sign related paperwork, such as…

LOOK BOTH WAYS BEFORE YOU WALK AWAY FROM A DEAL

While it may not happen often, on occasion we have experienced situations where one of the parties “walks” from the transaction.  In this instance, the buyer or seller is often left in a difficult position and wondering what remedies they may have against the breaching party, if any.  A well drafted contract will typically set-forth…

Foreign Buyers & Sellers-Speaking Their Language

In Florida we are fortunate to have many foreign buyers and sellers of real estate. Sometimes they show up on a realtor’s threshold and are ready to purchase a property to use as an investment, or a vacation home, or a reason to remove their money from their home country, or to house their children…

“Up a Stream without a Paddle-Closing without Title Insurance”

The immense value of title insurance has been well documented. Generally speaking, title insurance provides three somewhat distinct, yet significant coverage’s: Fatal title defects that could cause one to lose their property altogether, such as fraud, forgeries, inheritance issues, or execution/signing issues; Defects that could require the expenditure of significant amounts of money to cure…

Six Things You Need to Know about Buying Rental Properties (#2 will surprise you)

When a Buyer is purchasing a residential rental property such as a multi-unit building, they often have many questions about their rights as the new building owner and landlord.  The Buyer may also wonder whether the standard FR/BAR real estate contract is the appropriate contract for them and what protections it affords them.  Below is…

Getting Up Close and Personal (Property)

When real estate agents are out and about showing homes, those homes are usually staged, lived in, and/or full of furniture, appliances, etc. So when agents get the property under contract, what exactly is conveyed with it? The “As Is” and Standard Florida Realtors/Florida Bar contracts are useful tools and have been drafted by attorneys…

Consequences of Recording a Notice of Commencement

The Florida Construction Lien Statute (commonly referred to as the “mechanics’ lien law”), can be found in Chapter 713 of the Florida Statutes, Part 1. For purposes of this blog, the focus will be on this section of the statute dealing with Notices of Commencement.  First, what is a Notice of Commencement? For brevity, Notice…

DON’T BE CAUGHT WITH YOUR PANTS DOWN

Have you ever represented a Buyer that literally waits to the last second to inform you, via email, that they want to terminate a contract?  As a Realtor, what are your obligations?  Generally speaking your obligation (as Selling Agent) is to deliver the written notice of termination (or signed Release and Termination) to the Listing…
Homestead laws

To Wed or Not to Wed – Who Needs to Sign?

As most of us know, Florida law affords spouses significant protections, particularly when it comes to homestead. Homestead laws are fantastic and somewhat easy to follow when spouses are living in marital bliss, as our beloved Jamie Ebling will be doing from and after August 30, 2017. It is then that Jamie will be married…

Why Should the Seller Pick the Closing Agent and Pay for the Owner Title Policy?

In Florida, the choice of whether the buyer or seller should designate the closing agent and pay for the owner policy is a completely negotiable item.  The common standard in our region is for the buyer to pick and pay of the owner title policy (and lender policy if applicable).  Obviously, an accurate title search…
Divorce and its Effect on Your Real Estate Closing

Divorce and its Effect on Your Real Estate Closing

Your buyer or seller’s divorce or pending divorce can create potential issues in an otherwise smooth real estate transaction.  Below are a few examples to watch out for. 1)         Seller A purchased a property prior to getting married to Seller B.  They then both lived in the property and it became their homestead. It is…

Look Out for Double Dipping Closing Agents!

Some closing agents are getting greedy and charging closing fees to both, the buyer and the seller. Unlike title insurance premiums, closing fees are not set by the Florida Department of Insurance, so closing fees vary depending upon the closing agent and the transaction’s complexity. Closing fees are charged by closing agents to cover the…

Flood Insurance Reform Act of 2012

In 2012, Congress passed the Biggert-Waters Flood Insurance Reform Act of 2012 (“Act”) which requires FEMA, as well as other agencies, to change the way the National Flood Insurance Programs (“NFIP”) is run. The Act was designed to reduce the NFIP’s growing debt. Key provisions of the legislation require the NFIP to raise rates to…

Don’t Forget the Open Permit Search!

For financial reasons most parties do not perform an Open Permit search (which would include expired permits) until after the inspection period has expired.  This is a common mistake that generally leads to the buyers inability to object to an open permit issue at a later date.  The new FARBAR-2 Residential Contract for Purchase and…

CRSP-12 and CRSP-12 Addendums Debut

Originally Published: 8/10/2012 Effective August 20, 2012, the FAR-9 Contract will be replaced with the Contract for Residential Sale and Purchase (CRSP-12). In addition, the Comprehensive Addendum (FARA-10) will be replaced with the CRSP-12 addenda. Please see the attached link to the summary list of the changes between the FAR-9 Contract and the CRSP-12 Contract.…

IMPORTANCE OF OBTAINING NEW SURVEYS AND HAVING THEM REVIEWED IN ACCORDANCE WITH THE FLORIDA REALTORS/FLORIDA BAR CONTRACT

Originally Published: 6/8/2012 The following are excerpts of a more comprehensive article previously published by Julie A. Horstkamp, Esquire, Berlin Patten, PLLC, Member of Sarasota Association of Realtors/Sarasota County Bar Association Joint Committee, and Chair of the Florida Realtors/Florida Bar Joint Committee. We receive a number of questions regarding the survey provision under the Florida…
Menu