Ex-spouse worried about his financial interest in house

Posted3/18/2022 6:00 AM

Q: My wife and I were divorced about eight years ago. I have since moved to another state. Part of our agreement was that she would sell our house on or before our youngest child graduates high school. When that happens, I get half the net proceeds.

Although my youngest won't graduate high school for a few more years, I am getting pieces of information that seem to indicate she is getting ready to sell now. We do not communicate so asking her what is going on would be fruitless. How can I protect my interest in the property should she sell? As part of the divorce, I gave her a quitclaim deed so she could refinance and obtain a lower interest rate so I am no longer on the title to the property.


A: Your best level of protection was remaining in title. That way, she could not legally sell without obtaining your signature on the closing documents. As it appears that ship has sailed, let's review what other protections you have or can create.

One level of protection is that if she sells and runs with the cash, she has (I presume from your question) violated a material provision of the judgment entered in your divorce. You could then file a motion in the court where the judgment was entered, requesting she be held in contempt of court for violating terms of the judgment. Judges take these violations seriously and the judge in your case could enter significant sanctions against your ex.

Of course, none of this will help you if she takes the cash and disappears. So, I offer two additional thoughts.

One, as seller, she will be required to produce a title commitment and ultimately an owners title policy for the benefit of the purchaser. One of the title company's duties is to determine if there are any liens recorded against the property. This requires a title search, which also includes a name search of all interested parties. It is likely the name search will uncover your divorce, as the judgment is of public record. Presuming the divorce is discovered, the title company will likely wish to review the settlement agreement to determine who is entitled to what. The title company's worst nightmare is to pay your ex all the proceeds, she disappears, you find out and then sue the title company for your half share.

Again, however, you are depending on other parties to do the right thing. Your best insurance against this transaction occurring without your knowledge is to record a Memorandum of your divorce against the property. This is a short statement memorializing the divorce and your interest in the property that is then recorded with the county recorder. The title company will see the Memorandum and will likely take steps to ensure your interest is protected, ultimately also protecting themselves.

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Q. I purchased a property a couple years ago using Articles of Agreement. I have a couple more years before I have to pay the balance of the purchase price to the seller. I did not have an attorney when I did this, so I am concerned that this will all go down as expected when I am finally able to obtain financing and complete my purchase. My biggest concern is that the seller is hardly ever in town and when it comes time to cash him out, will I be able to find him. Any thoughts on how I can make sure I can finalize this when the time comes?

A. Yes, set this up so you don't need the seller when the time comes. If the seller's attorney is still around, contact him/her and ask (presuming this has not already been done) that the closing documents be executed and notarized now, to be held until you are ready to cash out. There is no reason for the seller to object to this. Just make sure the party you designate to hold the documents will be around when you are ready to complete the transaction.

• Send your questions to attorney Tom Resnick, 910 E. Oak St., Lake in the Hills, IL 60156, by email to tom@thomasresnicklaw.com or call (847) 359-8983.

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