Quick Answer
Yes. Divorce decrees, judgments, property settlements, support obligations, and deeds executed during divorce can affect ownership and title to real estate. These matters can create title issues that must be addressed before a property can be sold or refinanced.
Divorce and real estate intersect in complex ways. Understanding how divorce-related matters can affect title is important for anyone buying, selling, or refinancing property after a divorce.
Example
Bob and Mary divorced in 2018. The divorce decree awarded the house to Mary. However, the deed was never updated. The county records still show Bob and Mary as joint owners. Five years later, Mary wants to sell the house. The title search shows Bob is still on the title. Mary needs a deed from Bob (or a court order if Bob cannot or will not sign) before she can convey clear title to a buyer.
Other Possible Issues
Divorce can create several other title complications:
- Former spouse on the deed: As in the example above, the deed still shows the former spouse as an owner.
- Former spouse on the mortgage: Even if the divorce decree assigns the mortgage responsibility to one spouse, the other spouse may still be contractually liable to the lender.
- Judgment lien from the divorce: A divorce judgment may include a monetary award that, if recorded, can create a lien against the property.
- Equalization lien: The divorce court may have awarded one spouse a lien against the property to equalize the property division.
- Spousal support lien: Unpaid spousal support can create a lien against the obligor's real estate under applicable law.
- Missing deed: The divorce decree required one spouse to sign a deed, but the deed was never prepared, signed, or recorded.
- Settlement requirements: The divorce decree may include specific requirements for selling or refinancing the property that have not been followed.
IMPORTANT
A divorce decree that assigns mortgage responsibility to one spouse does not release the other spouse from contractual liability to the lender. The lender is not a party to the divorce. Both spouses may remain liable on the loan unless the lender agrees to a release or the loan is refinanced.
FAQs
What documents does the title company need after a divorce?
The title company typically needs the divorce decree, property settlement agreement, and any deeds or QCDs that were executed pursuant to the divorce. Review our article on documents needed to open a title order.
Can I sell property awarded to me in the divorce if my ex-spouse won't sign?
If the divorce decree awarded you the property but your ex-spouse is still on the deed, you typically need either a signed deed from your ex-spouse or a court order confirming the transfer. A divorce decree alone may not be sufficient to change title records. Consult a real estate attorney for advice specific to your situation.
Does title insurance cover divorce-related title problems?
An owner's title insurance policy may cover certain divorce-related title issues that were not known at the time of purchase, but matters that are known or should have been discovered are generally excluded. Always discuss your specific situation with your title company.