Multiple Choice Question:
This question somewhat qualifies as Valentine’s Day themed, given that it involves a couple who were once in love. Unfortunately, however, the husband and wife are currently divorced. They still hold title to a home together as 50-50 owners. The ex-husband wants to hire me as his listing agent to sell his 50% interest in the home. Is that something I can do? Pick the best answer:
B. Yes, if the couple holds title together as tenants in common, but not if they hold title as joint tenants or community property.
C. Yes, but it’s probably a bad idea.
Answer: The ex-husband can sell his 50% interest in the property without his ex-wife’s consent. It doesn’t matter if the couple holds title together as joint tenants, tenants in common, or community property. Hence, Answers B and D are wrong. Of course, if the ex-couple holds title together as joint tenants or community property, the ex-husband’s transfer of his 50% interest to, for example, Bob Buyer, will, as a matter of law, result in the ex-wife and Bob Buyer holding title together 50-50 as tenants in common (with no right of survivorship).
As between the remaining two answers, A and C, Answer C is the best answer. Virtually no one in the open market will want to buy a 50% interest in a home to own together with someone they don’t know. Anyone interested in that purchase is likely to: (1) offer a heavily discounted price as compared to 50% of the property’s fair market value; and (2) require a co-ownership agreement with the ex-wife who will probably refuse to sign such an agreement.
What you may offer to do in this situation is act on the ex-husband’s behalf in discussing this matter with the ex-wife. Perhaps you can convince her to sell with him. This may be a viable option if the 2 of them have an amicable relationship. Perhaps the ex-husband is willing to offer her more than her 50% fair share of the sales proceeds as an extra incentive to sell.
Another option for the ex-husband in this predicament is to suggest that his ex-wife buys him out, perhaps by refinancing the home if needed and possible. Another possibility is for the 2 of them to go to mediation together. Otherwise, the ex-husband’s last resort is to go to court to file a partition action and obtain a court order ordering a buy-out or sale of the property.
-Thank you to Yennis Wong (Pasadena Office) for suggesting this week’s legal tip.
-Happy Valentine’s Day to all you lovebirds!
Copyright© 2019 Berkshire Hathaway HomeServices California Properties (BHHSCP). All rights reserved. Any unauthorized reproduction or use of this material is strictly prohibited. This information is believed to be accurate as of February 11, 2019. It is not intended as a substitute for legal advice in individual situations, and is not intended to nor does it create a standard of care for real estate professionals.
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