By: T.R. Smith, Esq.
Divorce can complicate nearly every aspect of life, especially when it comes to real estate. In Florida, when one or both spouses are involved in a real estate transaction during or even after a divorce, special legal and financial considerations come into play. Understanding these implications is crucial for avoiding delays and disputes.
Selling the Marital Home
If the divorcing couple agrees (or is ordered by the court) to sell the marital home, they must coordinate with each other, their attorneys, the real estate agent, and the closing agent. In most cases, both spouses must sign the real estate broker’s listing agreement, the purchase contract, and the closing documents to sell the home. Therefore, cooperation by both spouses is necessary for a smooth transaction.
Real Estate During a Pending Divorce
One of the most problematic scenarios arises when one spouse attempts to buy or sell real estate while a divorce is still pending. Under Florida law, filing for divorce does not automatically sever property rights. Until a final judgment is entered, both parties may retain a legal interest in any property acquired during the marriage.
Even when the couple’s primary residence is titled in only one spouse’s name, the other spouse likely holds a homestead interest under Florida law, giving them legal rights and protections against the property being conveyed without their signature. As a result, Florida law requires both spouses to sign the deed at closing to ensure clear title is conveyed to the buyer. If one spouse attempts to sell the primary residence without the consent or knowledge of the other, the transaction could later be invalidated.
In addition, if one spouse wants to purchase a new home with a loan before the divorce is finalized, the other spouse must sign the mortgage at closing to satisfy Florida’s homestead laws. The non-titled spouse is not obligated to sign the promissory note or repay the loan, but their signature is required on the mortgage to convey a valid security interest to the lender.
Other Considerations
Title Issues: Divorces often result in the parties signing a marital settlement agreement. If the settlement agreement contains provisions affecting real property, a non-titled ex-spouse may be required to sign an affidavit to clear title issues, even if that ex-spouse conveyed their interest to the other many years ago.
Timing: Divorce can delay real estate transactions due to disagreements during the course of the transaction. It is important that both spouses sign the real estate sales contract so that both are obligated to perform at closing.
Financial Impact: If an ex-spouse remains on the mortgage post-divorce, they may be liable if payments are missed, which can affect their credit and future borrowing ability.
Final Thoughts
Divorce and real estate are a complicated mix under Florida law. Anyone involved in a divorce-related property transaction should consult a real estate attorney to handle the closing and related paperwork. While emotions may run high, sound legal advice and clear communication can help ensure a smooth transaction during a difficult time. For additional information, contact your trusted real estate attorney.
