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My husbands ex-wife is on the deed to his house. We have ...

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My husbands ex-wife is on the deed to his house. We have ALL the financial responsibility of it. She tried to buy it but financially is not able at this time. Our tenant will be moving out soon & we will not be able to afford it without that income. We have the opportunity to sell it now for the loan payoff but she refuses to sign the deed unless we make $25,000. Do we have the right to force her to sell at loan value since she cannot buy it? If so, what step should we take next?
Submitted: 6 years ago.
Category: Legal
Expert:  truthfinder replied 6 years ago.

You will need to file suit in civil court to get a judge to rule on the matter. Since she is on the deed she is entitled to 50% of the income it brings at the sell; that is all. The home should be sold at a fair market value so that each party gets the share they have in the home out of it. If she is refusing to sign over the home to a new owner, then a judge can force her to do that or come up with the money to buy out your husband's share of the home. Really her only legal options are:

  1. Sign a Quit Claim deed to the house for 50% of the sell price
  2. Buy out your husband's 50% of the home at fair market value

If taken to court it will be left up to the judge to decide what price the home may be sold at. The best option would be to use the appraisal value based on the property tax for the home and sell it at that amount and give her the 50% she is entitled to in exchange for her signing the Quit Claim deed to release her claim on the home.

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Customer: replied 6 years ago.
That is part of the problem. The tax value on the home is approximately $102,000. To pay it off it will take approximately $100,000 leaving us about $2,000 to split. She will not agree to this and she can't buy it for her ownself. We have been offered $100,000 for it and really cannot afford to keep it up. I guess our only other option is to foreclose. If we do this will the credit bureau accept an explanation of what happened?
Expert:  truthfinder replied 6 years ago.
Then your only other option is to take her to court, but that is going to be costly. She is not going to get what she wants out of this and in fact, you can sue her for the court costs you incur trying to settle this dispute. She is only entitled to 50% of the profit from the sell, that is it. If she wants more then she will have to prove to a court that she is entitled to it by way of the house being worth more or her having an agreement with your husband that she would get $25,000 upon the sell of the home. If she can not prove either of those things she will have to settle for half of whatever the property sells for minus the payoff; if you take her to court she will be losing even more money if the judge orders her to pay your court costs. To file a civil claim contact the clerk of court where she lives to get the necessary paperwork to file or contact a Real Estate Attorney in your area. I do not suggest allowing it to go into foreclosure as you would be out even more money because the home would be sold for a fraction of what it is worth and you would be out the home as well as owe whatever else is left on the loan after the bank sells it. Say you owe the $100,000 on the home but the bank sells it for $60,000, then he is liable to pay the other $40,000 in addition to being out the home. Of course if it does go into foreclosure, she and your husband will both be liable for the debt.
Customer: replied 6 years ago.
Even though her name is XXXXX XXXXX the loans, she would be partially responsible for the debt if it foreclosed? How long does it normally take to go through civil court? We will probably miss this opportunity to sell if we wait a long period of time. She does not have any proof, there was never an agreement. She told him how much she wanted to make off of it last week when we tried to put a contract on the house. The house is currently being rented but we are about to lose our tenant because all of this. We are financially tied right now. We really want to save his credit but we can't wait 6mos. to a year for this thing to settle if it takes that long.
Expert:  truthfinder replied 6 years ago.
If her name is XXXXX XXXXX deed then just as she is allowed 50% of any income brought in by the sell of the home, she is also responsible for 50% of the debt on the home. As long as her name is XXXXX XXXXX deed, she is responsible just as he is. As far as how long it will take, that is unforeseen as it will depend on how quickly you file the paperwork, when she is served, whether or not she files an answer to the court or allows a default judgment to be rendered....I won't lie, it can be an lengthy process. Perhaps if she is aware that if she does not agree to the sell of the home now, that she will face having to pay more than she will ever get out of it when it is foreclosed on, she will change her mind and be more willing to allow the sell and settle for getting $1000 rather than having to possible pay $40,000 or more and have her credit ruined. The other option would be to try and find a new tenant while the case is pending...some people are looking for a short term lease and you can simply notify the new tenant of the situation and that you are not sure how long it will be able to be rented.
Expert:  truthfinder replied 6 years ago.
Did you need further assistance?
Customer: replied 6 years ago.
Do you have any general idea about how much it may cost for court?
Expert:  truthfinder replied 6 years ago.

Go HERE for more information and HERE are the costs.

 

**If you found my answer helpful please remember to click the ACCEPT button so that I may receive credit for my work. Thank you!

 

 

Expert:  Dan replied 6 years ago.

I have a different perspective on this matter. I do agree, though, that it is likely that your only remedy will be achieved by going to court.

Unless your husband and his ex can take this matter back to family court where they were divorced for further direction by the court, this is not going to be easily resolved.

It is highly unusual that his ex would have had her name on the deed, but that a lender allowed your husband alone to take out a loan secured by the full property value. It wouldn't surprise me if she were a signatory to the loan as well, or that she at least agreed to allow her interest in the property to be mortgage on that loan (essentially became a guarantor of the loan).

When two parties own real estate and one wants to sell but the other refuses, your sole remedy typically is to file what is called a "partition action". This is a lawsuit which asks the court to order a property divided into parts, if possible, so that each side may go their own way with their own property, and if that it not possible than the courts are to order the property sold (actually at a public sale, like a foreclosure sale, which substantially reduces everyone's profit potential). In some jurisdictions, but not all, there is an in between step where the court can give each party the option to buy out the other (at a price as determined by an appraiser who works for the court, so the price will be deemed to be fair under present market conditions). If the parties won't agree to that, then it moves to the court-ordered sale mode.

The key point for you to understand from this process is that your remedy lies in the court system, and there is no possible way for you to accomplish that quickly. That means that your best course of action probably lies with finding a new tenant, and working on resolvering these legal issues over time when your backs aren't against the wall.

It is impossible to know from the facts provided what actual interest the ex-wife is supposed to have in the property. I am presuming that the ex-wife's interest arose as a result of a divorce proceeding, and so it is possible that under the divorce decree it dictated whether she has an equity interest, or whether her name was being left on title to secure some payment she was to receive as a part of the divorce settlement, etc. If her name remaining on the title to the real estate was for the purpose of assuring her right to receive some other settlement payment out of the divorce, then that obligation would survive this real estate matter. If on the other hand her name is XXXXX XXXXX title to the real estate because she is meant to receive 1/2 the equity when the property sells, then what equity she has depends on market conditions, which means that it could have gone up but it certainly can also go down. Unless it was a condition of the divorce that she receive at least $25,000 out of the sale of house, there should be no legal significance to that figure.

Lacking any other evidence, one would presume from title alone that she is a 50% owner (hopefully as a tenant in common) to the property. In normal situations, a 50% owner of property is entitled to 1/2 of profits from a property, and is responsible for 1/2 of obligations. If this matter is taken back before the divorce court, or before circuit court due to filing a partition action, then there will be a mechanism to present accounting for what has transpired and arguments for how you each feel that the proceeds should be divided.

The long and short is that despite the ex-wife's refusal to cooperate, you can force her hand. But it will likely cost you a trip to court way or another to accomplish that, which is not going to get resolved quickly.

And letting the property go to foreclosure may be a disastrous move, especially if your husband has any obligations to his ex under the divorce decree. If the ex is truly not on the loan, the negative consequences of the foreclosure will fall primarily on you, the loss will fall on you, the ex may or may not still have rights to compensation from your ex. I just don't see much merit other than ease in taking this route. 

I hope this has been helpful. Let me know if you have any followup questions. If none, please remember to click on the ACCEPT link so that I may receive credit for working on this topic with you. (I'd greatly appreciate it!)

Thank you,

Dan

--------------

The information provided is general in nature only and should not be construed as legal advice or to create an attorney-client relationship. You should always consult with a lawyer in your state.

PS: If an answer appears to you to have been very helpful, or to have taken above average expertise and/or research, or if the answer shows an above average amount of time and dedication devoted to your issue, a bonus is nice way to say "Thank you". Thanks!

Expert:  truthfinder replied 6 years ago.

So, as you can see from what the other expert noted, his perspective is not really different from what I had mentioned before. Going to court is going to be the only way to "force" her to allow you to sell at the price you are getting now unless she is willing to lose out on any possible income from the sell at all.

As Dan also agreed with me, it is probably best to find a new tenant until the issue is resolved and do all you can to avoid foreclosure.

Hopefully with the additional information in agreement to what I had already stated you can see and weigh what your options are.

Expert:  Dan replied 6 years ago.

For purposes of clarification (if I wasn't clear the first time), if you take this to court via a partition action (which may be your sole legal option) and you are unable to work things out between yourselves, you lose all control over the price that the property sells at in a public auction. That is a key concept to understand. You will not "force her to allow you to sell at the price you are getting now". You simply hand all control over regarding that matter to whomever shows up to bid at the public auction. In your case, it is functionally similar to going into foreclosure because of the amount that is owed on the loan.

In this case, I suggest that you look at the possibility of filing a partition action as a legal game of playing 'Chicken'. If you file, it will be for the purpose of saying: "See, I can force your hand because the court can and will order the property sold of you don't agree to cooperate!" The risk is that she doesn't duck or fold, and you end up having to go through to the auction stage. It's a high risk game, with legal costs associated with it, and you have very little equity to play with.

It sounds like this matter has not unfolded wisely dating back to the time of the divorce. It will probably not be easily unsorted. There is very little equity to work with, and you don't have deep pockets to waste on legal maneuvers. Unless there is an option to seek redress via the family court, your traditional real estate options are not going to be particularly helpful to you because of the numbers.

Renting it out again buys you time, but it doesn't solve anything. This is a case your best options rest with negotiating some solution. The divorce situation may make that difficult, but there are no good options here.

I wish I had other options that I could present, but I just don't see much else to direct you to. Good luck to you!

If you find this information useful and are inclined to ACCEPT, please accept on one of Truthfinder's responses. I am offering my advice only for the purpose of providing you additional insight and the benefit on my experience, and to be sure that you understand the actual legal issues and financial consequences you face should you be inclined to take the court route that Truthfinder discussed.

Dan



--------------

The information provided is general in nature only and should not be construed as legal advice or to create an attorney-client relationship. You should always consult with a lawyer in your state.

PS: If an answer appears to you to have been very helpful, or to have taken above average expertise and/or research, or if the answer shows an above average amount of time and dedication devoted to your issue, a bonus is nice way to say "Thank you". Thanks!

Expert:  truthfinder replied 6 years ago.

Lori,

Please let me know if you need further assistance. Were you able to open the files for the court costs you asked for in your last response?

I wish you the best of luck & look forward to working with you again!

Customer: replied 6 years ago.
Sorry it took so long to get back with you, we have a demanding 11 month old at home. I really appreciate your responses and help. I was talking about it with my husband and we have another question. If we take her to court is it possible for the judge to order us to pay her any profit after fair market value and sign over the house to us? For example if the value is $102,000 and we still owe $100,000 can the judge order us to pay her $1,000 and then we have ownership? Or would we have to wait and sell the house to someone else?
Customer: replied 6 years ago.
She does not have any kind of agreement with the house. She drew up the separation papers and gave him "possession and exclusive use" of the house and he is to be responsible for the loans and taxes. It says nothing about any kind of amount she is owed, and no kind of deal for anything else. Because he has "possession" is the whole hang up about this thing. It was never addressed by the divorce attorney.
Expert:  truthfinder replied 6 years ago.

I completely understand...I remember those days very well!

Yes, that is a possibility if you simply file a civil action against her to have the judge order her to relinquish her claim to the property in exchange for half of the profits from the sell by you and your husband. I do not believe you will want to do the partition action as that would involve the court taking control of the sell and everyone would lose a lot of money this way as it is similar to foreclosure sales.

It seems that this all then goes back to what the divorce decree lacked; whether or not she was allowed anything other than her 50% ownership of the home. If you take this to court and ask the judge to decide, then it will be out of your control and totally up to the court. They will auction the house off to get the most they can from it in a sale much like they would at foreclosure. What that means is that you and your husband could suffer a huge financial loss and she may wind up with nothing as well. It depends on what you ask for. It may be more worthy of your time and energy to file for a modification hearing of the divorce decree or an appeal depending on how long ago it was ordered. He may or may not be allowed to appeal the decree, but it may be worth trying. If your husband can get the judge to give him "custody" of the home for the purpose of satisfying the loan by sell then she could be ordered to relinquish her claim to the property by signing a Quit Claim in exchange for half of whatever the sell brings after the loan is paid off. This may give you a better chance at ending this and keeping the home in his control rather than the courts (this gives him a better chance at getting more money from its sell). The best option I believe is if she and your husband can come to an understanding and an agreement can be made that she will accept the $1,000 to sign the Quit Claim or forfeit any money that she may or may not have gotten. By taking this back to the divorce court will allow him to fight for sole ownership in exchange for the $1000 as you mentioned and the freedom to sell the home and get out from under the loan.

Unfortunately this is not going to have a good outcome due to the lack of the divorce attorney's attention to this matter during the divorce; she should have never been allowed to keep her name on the deed. You may want to read HERE on distribution of property as well as HERE & HERE on the partition action.

My best suggestion due to the time limits placed on you for the sell would be to sit down and draw up an agreement that state she will get half of whatever the home brings in from the sell AFTER the loan is satisfied in exchange for her signing the QUit Claim deed OR she can forfeit her claim to that money and be in jeopardy of losing any and all possible money from the sell by going to court and allowing the court to sell the home and she will also be sued for the court costs and attorney fees incurred by that process. By giving her the option to:

  1. Buy out your husband's share of the home and take over all responsibility for it including the loan payments and any future debts
  2. Sign a Quit Claim deed for $1,000 which is 50% of the proceeds from the sell of the home after satisfying the loan
  3. Go to court, have the court sell the home, get no money from the sell, and be responsible for the court costs and attorney fees and be forced to give up all rights to the home

Perhaps if she sees the options in writing she will realize that it is $1,000 or nothing. If she still refuses then I suggest contacting a real estate attorney in your area to handle this for you and add those costs into your judgment requests at the hearing.

Customer: replied 6 years ago.
We were thinking of getting a court order for her sign over the deed for whatever the fee (say $1000) and we keep the house rather than sell it. We are considering the possibilty of refinancing and signing a new lease with our current tenant, hoping this will encourage her to stay. Is this a possibility or do you think the court will make us sell? We know his ex will not agree to this, it will have to be done through the court but can they order her signature if we pay her 50% of fair market value minus the current loan amount and we maintain ownership?
Expert:  truthfinder replied 6 years ago.

The problem with her being a 50% owner is that if she wants to sell the home then the court will force the sell, even though this will lessen your chances of getting the fair market price for it and she will get nothing as the loan must be paid off first. The only option it seems for you to keep the home and get her to sign off would be to agree to her terms, the $25,000. However, if you simply continue with how things are now, allowing the tenant to remain in the home and refinancing it, you will not be forced to sell the home unless SHE takes the issue to court and demands the sell. What she is not understanding is that since there is little to no equity in the home and since the loan is so large, she is not going to be able to get anywhere near $25,000 from the sell of the home. If you wish to keep the home then it is probably best to keep this out of court because if it goes before the court and she states she wants the home sold, then the court will take control of that sell and it will be auctioned off to the highest bidder which could bring less money than the house is worth and then they would be responsible for what is left on the loan.

The partition action, as mentioned previously, would be the action you would want to take with the court should you decide to sell (read more HERE) or you can petition the family court that ordered the divorce decree to allow the decree to be altered and her name removed for the 50% of the fair market price minus the loan amount.

I have to be honest and say that your best option here would be to find a new tenant for the home or try to keep the tenant you have in the home while you try to refinance the loan and come to an understanding with the ex for a amount of money or take it to family court to try and have them remove her name as an amendment to the divorce decree which should have read that her name was to be removed when she gave him "possession and exclusive use" of the property. There really is not a right, simple solution to this issue and I wish I could tell you with definite certainty which option would work best for you; but the situation is complicated and there is so simple solution. If you wish to go through with the sell or take her to court otherwise, I HIGHLY suggest retaining legal counsel in your area. If you can find an attorney that works on a contingency that may be best as you can ask for any judgment to include your court costs and attorney fees. It just seem that the most obvious way to NOT lose money here would be to keep the tenant (or a new tenant) in the house while working on an agreement with the ex-wife outside of court.

 

Customer: replied 6 years ago.
Thank you for your help.
Expert:  truthfinder replied 6 years ago.
You are very welcome! I wish you both the best of luck! God bless!

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