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A divorce agreement or judgment may establish the parties’ obligations, but carrying them out requires coordination among the owners, their matrimonial attorneys, the real estate attorney or attorneys, and their broker.
Who makes the decisions?
Before the property is listed, the professionals handling the sale should understand what the divorce documents say about selecting a broker, setting the asking price, accepting an offer, and reducing the price if the property doesn’t sell.
Who handles the legal work? Each spouse should have their own real estate attorney.
Even when former spouses agree to sell, their interests may diverge over the price, closing date, repairs, reimbursement of expenses, or distribution of the proceeds. An issue that initially appears routine can quickly become a dispute.
For that reason, I recommend that each spouse retain their own real estate attorney. One attorney can take the lead in negotiating the contract and coordinating the closing, while the other reviews the documents, monitors the transaction, and protects their client’s interests.
The work need not be duplicated, but each spouse should have someone looking out specifically for them. Both real estate attorneys should also coordinate with their respective clients’ matrimonial counsel to ensure that the sale carries out the divorce agreement and that any disagreements are addressed before they threaten the closing.
Who pays and who gets reimbursed?
“Divide the proceeds” can sound straightforward until someone asks:
- Who receives credit for mortgage payments made after the divorce?
- Who pays for repairs needed to complete the sale?
- How are unpaid maintenance, common charges, or assessments allocated?
- Are any other payments between the former spouses due from the sale proceeds?
The answers depend on the governing documents and circumstances. The proposed distribution should be worked out well before closing, with supporting records for any claimed credits.
Closing day is a poor time to discover that the sellers disagree about where the money should go.
What if one person refuses to cooperate?
A broker cannot resolve a legal dispute between former spouses, and the real estate attorney cannot assume authority to sign for an unwilling owner. If cooperation breaks down, matrimonial counsel may need to seek enforcement or other appropriate court relief. New York litigation has involved precisely these problems, including allegations that a spouse refused to cooperate with brokers or execute a sale contract.
Selling a home after divorce is often the final step in separating two financial lives. Reviewing the divorce documents, assigning responsibilities, and addressing potential disagreements before a buyer is found can help keep that final step from becoming another prolonged dispute.
If you, a client, or someone you know is preparing to sell a home following a divorce, I welcome an introduction.
With more than 40 years of New York real estate experience, I can help coordinate the transaction with matrimonial counsel and identify issues before they delay the closing.
Best Regards,
Keith
Schuman & Associates LLC
"Because Experience Matters."
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