If you are going through a divorce, you may be wondering when you can sell your home or if you can be forced to sell your home as part of the litigation. This article will explain the circumstances under which a house is sold during a divorce and under what circumstances a home can be sold before the divorce process is finalized.
We will also detail what could happen to marital real estate after the parties’ reach a final settlement agreement or the Court enters a final divorce decree.
Can I Sell My House During My Divorce If My Spouse Agrees?
Sometimes both parties to a divorce action will agree amongst themselves or with their family law attorneys to sell the marital home before the divorce is finalized. If both members of a divorcing couple agree to the home’s sale, generally speaking, they can sell the home before the divorce concludes.
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However, to protect both parties’ legal rights and interests, it is advisable for the agreement regarding the marital home to be reduced to writing. As a best practice, the agreement should also be signed by both parties and their attorneys to manifest their consent to the marital property’s sale.
Once an agreement to sell the home is made, the parties should jointly select a real estate agent and possibly, a real estate attorney to guide them through the transaction. The parties should also jointly agree on the list price, the buyer, and other provisions of the sale agreement.
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Lastly, the parties may want to mutually agree on how to split the proceeds from the sale of the marital home, after payment of any outstanding mortgage liability, home equity loans, and closing costs. Since any proceeds from the home’s sale are considered marital funds, the parties should consult with their attorneys concerning an equitable division.
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Prior to agreeing on a split of marital funds before the final divorce, the parties may want to consider other aspects of the divorce litigation, such as alimony as well as other marital assets and liabilities.
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Sometimes, equity in a marital residence can be used to offset other items in a divorce proceeding. For example, if one spouse decides to take over the entirety of the marital credit card debt, they may get a larger share of the proceeds from the marital home’s sale to offset their taking on this additional marital debt.
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Therefore, if the parties come to an agreement on how marital funds from the home’s sale are to be divided, they should consider other marital assets and liabilities as well as any alimony or support payments that may be owed.
If the parties cannot agree amongst themselves or between counsel on an equitable division of funds from the home’s sale, they should generally keep the funds in escrow until their divorce case concludes.
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Keeping the funds in escrow avoids either spouse dissipating these monies and can help ensure the marital estate is kept intact until a final Court Order or agreement can be reached.
When does Child Support End in New Jersey?
In limited circumstances, the Family Court may compel the parties to sell a home before divorce proceedings conclude.
In New Jersey, the major appellate decision concerning this issue is Randazzo v. Randazzo. In that case, the parties had multiple pieces of marital real estate; however, the litigation turned primarily on a Florida property, which was sold prior to the divorce.
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There was some evidence that the Defendant (Husband) consented to the sale of the property but later reneged on this agreement.
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In any event, the New Jersey Supreme Court ruled that regardless of Husband’s consent or lack thereof, the trial court had discretion to order the property’s sale prior to the Final Judgment of Divorce. The State Supreme Court also held that the trial court could order distribution of the property’s sale proceeds if it served the parties’ best interests.
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Here, though the parties had multiple pieces of marital real estate, they could not afford to meet their financial obligations on these properties. There were tax liens on other properties beyond the Florida residence. In addition, both parties appeared to agree that there was not enough money from their business to pay off the liabilities associated with these properties.
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Because of these facts, the Court found that a pendente lite or pre-divorce sale of the Florida property was warranted to protect the parties’ financial interests.
As you can see from this decision and the particular facts of the case, the Court is only likely to order the sale of marital real estate in special cases. In other words, the circumstances must warrant the asset’s pre-divorce distribution, and not every New Jersey divorce case will result in a Court Order for the sale of marital property before the divorce is finalized.
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Though the remedy is available, the Court usually limits the pendente lite sale of marital real estate to exceptional cases.
In Pennsylvania, it is also possible for the Court to order the sale of marital real estate before a divorce is final via one party’s petition for special relief.
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Under Rule 1920.34, at any time after a complaint in divorce is filed, the Court can hear a petition by one party to: (1) issue preliminary or special injunctions necessary to prevent the removal, disposition, alienation or encumbering of real or personal property in accordance with Rule 1531(a), (c), (d) and (e); or (2) order the seizure or attachment of real or personal property; or (3) grant other appropriate relief.
However, again, even under this Rule, there must be special circumstances justifying the relief being sought. So, if one party is requesting a sale of the marital house during the divorce, they must communicate why the special circumstances of this divorce warrant a pre-judgment sale of marital property.
Again, not every Pennsylvania divorce case will result in a pre-divorce sale of marital real estate and the Court will usually limit pendente lite distribution of marital assets to special cases.
Can the Court Force Me to Sell My House Before My Divorce is Final?
Divorce and Selling Your House Once the Proceedings Are Finalized
Once the parties reach a Property Settlement Agreement or the divorce is otherwise finalized by Court Order, a sale of marital real estate may occur.
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Commonly, the divorcing couple will decide to sell the marital residence if neither can afford to maintain it on their own. Besides selling the home, one party can “buy out” the other party’s share of the equity in the residence.
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In general, the parties will agree on a distribution of the proceeds from the sale of marital property. This agreement will usually be written down in a Marital Settlement Agreement or Property Settlement Agreement and will become part of the final divorce decree.
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If the parties do not agree on settlement terms, the divorce Court will decide how to divide the proceeds from a home’s sale between the parties.
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In equitable distribution states like Pennsylvania and New Jersey, how the proceeds from the home’s sale will be distributed depends on a weighing of the equitable distribution factors. In Pennsylvania, these factors are outlined in 23 Pa. C.S. §3502 while in New Jersey, they are detailed in N.J.S.A. 2A:34-23.1.
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For more information on asset division and equitable distribution in divorce, please click here.
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Schedule a Free Consultation with a Divorce Lawyer Near You
Addressing the issue of marital real estate can be complicated. Having a strategic litigator in your corner can help you decide when, how, and if your home should be sold during a divorce or after your divorce is finalized.
We invite you to schedule a free consultation with our Philadelphia and South Jersey divorce attorney to discuss these issues and get the legal guidance you need in your divorce case.
