FAQ: When the Divorce Decree Conflicts With the Deed

Many couples own homes together. If they ever decide to separate, they need to know what to do with their co-ownership. They could simply sell the home to solve that issue. But after a legal separation or divorce, one of the two people may want or need to stay in the home. If the deed doesn’t reflect that new, solo status of the resident homeowner, things can get a little confusing.

Here is a Frequently Asked Questions list dealing with deeds and decrees — and a brief comment for each question.

Q. If my home’s deed is in my name and my spouse has never been named on it, I have the right to just sell the property, right? 

A. In most states it is not so simple. Even if you bought the home before you got married, your marriage is relevant to how you dispose of your assets now. You’ll usually need your ex-spouse’s consent to close a sale. This is done through signing a waiver of any interest in the property’s value. If your ex won’t sign the waiver during divorce proceedings, your attorney can petition the court to order a property sale.

A. In other words, my name being on the deed doesn’t trump the divorce decree?

That’s right. Spouses gain “equitable interests” in each other’s assets. Your attorney will review your deed and your mortgage documents to plan out the steps you’ll take to arrive at a fair and legal division of assets that’s acceptable to the court.

Q. So a court could also compel me to sell a home that’s deeded in my name?

A. Yes. Your name may be on the deed, but a court has authority to change your deed. If, during a divorce case, the parties can’t agree on how to divide the value of their property, a court can “split the baby” by ordering a sale and a fair division of proceeds.

Q. Will the lender remove a person who moves out of the home from the mortgage automatically?

A. No. Rarely does a loan agreement direct a lender to release a co-borrower in the case of a change in life circumstances. Mortgage companies get no benefit out of freeing a debtor from the debt. Co-borrowing homeowners remain responsible for the loan — even if one leaves the home. So, the general rule is not to sign away a deed to a home without getting released from the debt. If you’re directed to sign the deed over for the purpose of completing a home sale or a refinancing, follow your lawyer’s guidance before signing.    

Q. If I’m still on the mortgage and the home goes into foreclosure, how can I be legally responsible? We’re divorced!

A. To a lender, the status of your relationship doesn’t matter. The lender just needs to get the loan repaid. If you are named on the mortgage documents as borrower or co-borrower, you are responsible for the loan. Your credit is on the line.

Q. My ex should be able to repay the loan. Can I compel my ex to pay?

A. Maybe. First, protect your credit rating and act to avert a foreclosure. This depends on the lender getting repaid on time. Call your mortgage company if you need to negotiate an agreement. If you are considering taking legal action to get your ex to pay, consult with your lawyer for guidance informed by state law.

Q. The divorce decree says I get the home. Is this automatic?

A. No. Your ex has to actually sign over the deed. A divorce decree itself is not a deed transfer. It simply states how the parties must divide their property.

Q. How do I get my ex to sign the quitclaim deed as the divorce decree has directed?

A. Does your court decree or settlement agreement instruct your ex to sign a quitclaim? If so, your lawyer can ask for a court order to compel your ex to sign the deed. Concerned that your ex won’t sign the deed as the court directed? Speak with your attorney. Hold your ex in contempt of court. As a last resort a court may issue a court order in lieu of the quitclaim.

Q. When we separated, my ex refinanced. While I’m not responsible for the mortgage, my name is still on the deed. When my ex wants to transfer the deed, what then?

A. You say you’re not responsible for the mortgage repayments. But if you’re on the deed. If your ex stops repaying the loan, the lender could foreclose on the home and  have it auctioned off at a discount. So you do have a financial stake in this — one that might be better resolved now than later.

And if your ex were to pass away, you might wind up wrangling with the family over probate. (This depends on how the deed is vested.) In any case, does it make sense for your ex to pay a mortgage on a home without full ownership rights? You might want to speak with your lawyer about negotiating with your ex and separating your assets.

Q. Can a lender take my name off if the loan is assumable?

A. If you have an FHA mortgage or some other form of assumable loan, you may be able to have it assumed by whoever keeps the home. Under such an arrangement, your ex could keep the loan just as it is, with all its current terms in place. To find out how this works with a given loan, borrowers should speak with their mortgage consultants. Ask about fees and whether the party who leaves can be released from the loan.

Q. Can couples who remain on speaking terms split up the property by themselves?

A. Yes. To change an existing deed, the parties need to create a new deed. Any deed holder may prepare a quitclaim deed and transfer their property interests. They put the world on notice of the transfer by recording the deed in the county where the home is. But there are important reasons for both parties to consult with their own attorneys and receive legal guidance.

Protect Your Interests

Experienced divorce attorneys have seen many mistakes. They can help clients take the proper steps, one by one. Doing everything in the right order sidesteps the pitfalls, and protects your interests.

Note: We offer this article to help readers ask good questions, and to encourage well-planned deed decisions. But this is not legal advice. Remember: No website can substitute for consulting a lawyer for case-specific guidance under both state law, and how the law relates to your own situation. Meeting with your own attorney is the way to discern your rights, responsibilities, and possible courses of action.