Earlier this month, I made a presentation to a group of local real estate agents about some of the legal issues surrounding real estate transactions involved with divorces. What follows is the final third of a set of notes I wrote for the presentation handout, offered here because the information is as important for the owners as for the agents. Part 1 can be found here, and Part 2 can be found here.
IV. Post-Judgment Transactions:
A. The Dissolution Judgment is your friend. Once the judgment is finalized, if sale of property is ordered, that will fast-track the process and reduce disputes. I would obtain a copy of the final judgment (previously certified by the court) and provide a copy to the title company for their review to make sure they have no issues upon closing.
B. Make sure the judgment clearly sets out the rules and procedures to get the property sold. I would not be shy about requesting from the attorneys a draft of the judgment to review and comment upon. After all, if the property is ordered sold, there need to be ample guidelines on how to get it done. This should specifically address not only repairs, but how to respond to offers, where there need to be price adjustments, and how to otherwise make sure the property stays competitive.
V. Collateral Issues:
A. Liens: It is common for there to be attorney fee liens or other professional liens attached to the property. This is not a problem so long as you know exactly what liens are involved and make sure the lienholders are prepared with updated account balances at the time of closing.
B. Marital Debt/Support Arrearages: It is also very common for parties to agree that certain marital debts will be paid out of escrow upon sale of the home. Again, this is not terribly complicated so long as you know from the judgment or other sources what is going to be paid. Sometimes the parties agree that one party will pay the other back child or spousal support once the house sells. It is essential that the exact arrearage amounts are disclosed and agreed upon prior to closing. In addition, the party receiving payment will need to acknowledge receipt by signing a Partial Satisfaction or Full Satisfaction of Judgment at the time of closing.