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Selling Property During a Divorce

Posted Tuesday, January 13, 2015

In most states, when one spouse to a marriage files for a divorce, an automatic stay results. That stay prohibits either party from disposing of any property in any way other than ordinary living expenses without order of court or agreement by the other spouse. It operates to maintain the status quo during the pendency of the proceedings while the court decides how to divide the parties' property. If a state doesn't have an automatic stay, a court is going to frown on any unilateral disposition of property without its permission or the consent of the other spouse.

Judges ordinarily encourage and appreciate settlement of any issues that the parties are able to resolve. If a case is going to be resolved on a piecemeal basis though, the court wants to be made aware of that fact at one time or another through one means or another. Whether it involves a marital home, a vacation home or vacant land, if one of the parties to a divorce wants to sell property during the pendency of the divorce, either the other party or the court must agree to it.

There are three ways to sell real estate during a divorce. First, the parties simply show up at closing with their attorneys. They sign off on all closing documents and net proceeds are divided pursuant to agreement. That agreement is reflected by their approval of closing documents. That's the simplest way. The second way involves minimal intervention of the court. By agreement of the parties, a routine order is presented to a judge for approval that permits the parties to sell the real estate. Net proceeds from the sale are either distributed pursuant to that order, or proceeds are retained in trust until such time as the court determines how to distribute them. The final and most difficult and expensive alternative applies when one of the parties doesn't consent to the sale. Pursuant to notice and motion, a hearing is held. Issues the court then might decide on include whether the property should be sold, who it should be sold to, how much it should be sold for, and how the net proceeds of the sale should be distributed.

If indeed you want to sell property during a divorce, it can be as easy or difficult as your spouse wants it to be. It can certainly be done. Judges encourage and appreciate the cooperation of the parties.