It is not uncommon for only one spouse to be on the title of a house, whether it was purchased before marriage or during a refinance. However, this can cause problems during a divorce case requiring the home to be sold. Even if the non-titled spouse has equity interest in the property, they are not a legal owner and therefore have no authority over any aspect of the listing or purchase agreement. REALTORS®, escrow and title companies, and all other entities involved in a real estate transaction only recognize the person on title.
This means that the non-titled spouse has no say over the list price, choice of brokerage, length of listing, commission paid, marketing, open houses, lockbox, or even the sign in the front yard. They also have no control over offers, counteroffers, repairs, length of escrow, closing costs paid to buyers, or the choice of buyer. The Realtor is not obligated to take instructions from or communicate with the non-titled spouse or their attorney. Essentially, their role in the transaction is similar to that of a tenant.
The biggest issue for the non-titled spouse is that they have no control over the distribution of proceeds from the sale. A lis pendens does not give the non-titled spouse any authority. It only serves as a red flag for the closing officer to release it. By the time the lis pendens is addressed, the contractual terms of the real estate transaction have already been agreed upon.
If you are the non titled party and the house is to be sold during a divorce case, you may want to consider appointing a Certified Divorce Real Estate Expert(CDRE®) and include a clause in the agreement that requires the CDRE® to communicate equally with both parties. If there is a disagreement, the CDRE® should notify the respective counsel before any documents are executed. If you have further questions about options as a non-titled spouse, give one of our CDREs® a call. 813-TAKE-AIM(813-825-3246)
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