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Life after divorce (part two)
Transferring real estate
If your
agreement states that you or
your spouse will become the sole
owner of property you currently
own together -- such as a house,
rental property, cottage, other
buildings, or land -- then one
of you will need to transfer his
or her interest in the property
to the other. If you're the one
who's keeping the house, for
example, your ex needs to give
you a signed copy of the deed to
the house. If you don't know
where the deed to the house is,
check with your lawyer, a title
company, or the recorder of
deeds in the county courthouse
where the property is located.
If you are assuming the mortgage
along with the house, you'll
need to give your ex a deed of
trust to secure your assumption
of the mortgage loan. If there
are still mortgage payments due
on the house, you will be liable
for the debt -- even if your
decree calls for your former
spouse to pay it off.
Conversely,
if your spouse keeps the house,
assumes the mortgage, and then
defaults on the loan, the lender
can come after you for payment
-- despite what your judgment
says. So if your ex is keeping
property that you used to own
together, and you haven't
finalized your agreement yet,
consider adding a "hold
harmless" provision to your
agreement; this will give you
the right to sue your ex for any
money you have to pay to cover
his or her default.
Selling the
house may be your best option if
it's your only real marital
asset, if it's too big for you
to live in or maintain alone, or
if it holds too many unhappy
memories. That way, you'll both
probably get to leave the
marriage with some money in your
pockets, and you won't have to
worry about being on the hook if
your ex later defaults on the
mortgage.
If your ex
is going to keep the house but
pay you a certain amount of
money over a set time period --
say $50,000 over five years --
you may want to secure the money
with an asset. This is what a
bank would probably do, and
there's nothing to stop you from
doing it, too. In the example
listed above, you would secure
the debt by placing a $50,000
lien against the house (record
this lien at the county
courthouse where the property is
located). This means that your
ex can't sell, borrow against,
or transfer the house without
paying you first. It also means
that you can foreclose on your
ex and sell the house if you
have to. (If you and your ex are
still connected to each other by
your children, foreclosure
really is a last resort since it
will certainly exhaust any
goodwill remaining in your
relationship.)
Foreclosure
and subsequent sale can work to
your advantage if there's
sufficient equity in the house
to pay off the mortgage, cover
the costs of having a trustee or
sheriff sell the house, and
hopefully repay some or all of
the money your ex owes you.
Here's a
list of some of the documents
you may need when it comes time
to transfer property:
-
Title.
This document outlines the
right to ownership of the
land. The evidence of the
ownership is commonly shown
in documents such as: a
Certificate of Title; an
Abstract of Title with a
lawyer's opinion; Title
Insurance; a Torrens
Registration Certificate; or
a Deed for the property). If
you can't find your proof of
ownership, ask your lawyer
or the recorder of deeds at
the local county courthouse
for a copy.
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Title
Insurance.
This policy insures the
owner or the mortgagee
against loss by reason of
defects in the title to a
parcel of real estate (other
than defects, encumbrances,
and matters specifically
excluded by the policy). The
title company or your lawyer
has a copy.
-
Mortgage.
This is a conditional
transfer or pledge of real
estate as security for a
loan. Ask your lender for
this.
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Appraisal.
Provides the estimated value
of the property. Ask the
appraiser or your lender.
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Lien.
Gives the property value and
the amount of the debt
secured by the property.
Information about liens can
be obtained from the lender,
your lawyer, the title
company, and the recorder of
deeds.
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Homeowner's Insurance
Policy.
Lists the value of the
property and personal
property -- everything from
computers to bicycles to
appliances to artwork. Ask
your insurance company for a
detailed copy, and make sure
to let them know about
changes to the policy (e.g.,
your ex and all his/her
property are deleted, etc.)
as soon as possible.
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Affidavit of Title.
You
may need to make a written
statement, acknowledged by a
Notary Public, in which you
identify yourself and
indicate your marital
status; certify that no
defects have occurred in the
Title since the examination
on the date of the
contracts; and certify that
you are in possession of the
property (if applicable).
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