Divorces and Deeds (An Update to Previous Post)

by | Sep 6, 2018 | Legal Tips

In February 2017 I posted the article below about a real estate agent who was disciplined in part because she failed to get a divorced spouse to sign the listing agreement when that former spouse was still a record owner of a property that she was listing. Recently, we had a closing “DFT” because the divorced spouse was not included on the listing agreement or sales contract. Once the title work was completed and it was discovered two people owned the property, we asked the seller on the contract if his partner/spouse was going to attend closing. We then discovered that the two were divorced and not on good terms. The two could not come to a resolution on splitting the proceeds and the divorce decree was silent as to whom was to receive the funds. Thus, the closing fell through leaving the buyer without the home.

When meeting with a potential listing client it is essential that real estate agents determine who is the record owner of the property. Pulling a copy of the deed as mentioned in the post below is one good way.  Another tip would be to ask the person you are meeting with if anyone else has ever owned the house with them. If they say an ex-spouse, you need to inquire whether or not a deed was signed conveying the ex-spouse’s interest.  Contacting a closing attorney for advice would be best.

As I stated in an October 16 post entitled “Divorces and Deeds,” “the Divorce Decree does not transfer the title. It is a directive of the court that still requires the affirmative action of delivering an executed deed.” See, https://www.blaircato.com/divorces-and-deeds/.

Here is the post from February 2016. 

Did All Owners Sign the Listing Agreement?

Ensuring that all owners of record sign the listing agreement is imperative. The Matter of Martinez (SC REL Case No. 2014-412) illustrates the peril of failing to follow the statute and proper procedure.

Martinez was a duly licensed real estate agent located in Charleston, South Carolina. Her real estate license lapsed on June 30. She eventually renewed her license on August 16.

On July 7, while her license was lapsed, Martinez listed her brother’s marital house for sale. Her brother was going through a very contentious divorce at the time. Unfortunately, Martinez failed to have the listing agreement executed by all owners of record. First, Martinez failed to have the ex-wife execute the listing agreement even though she was an owner of record. Secondly, Martinez’s brother failed to sign the listing agreement. However, Martinez claimed that she had received his permission to sign the agreement on his behalf.

When the ex-wife discovered the marital house was listed for sale she notified Martinez that she did not give her permission to list the property and wanted her to cease immediately. Martinez continued to market the property despite the ex-wife’s appeal. In fact, she continued to market the property until she received a “Cease and Desist” letter from the ex-wife’s attorney. Due to Martinez’s action the ex-wife filed a grievance with the South Carolina Real Estate Commission.

The Commission held that Martinez violated SC Code §40-57-135(D)(4)(g) by failing to obtain a listing agreement in writing with the signature of all the parties.  As a result of her actions Martinez was publicly reprimanded, fined $1,000 and required to attend a 30-hour post-licensing course.

When listing property it is imperative that you do a bit of research concerning the ownership of the property. Ownership information can easily be found at the Register of Deeds Office as well as on many county websites. Without doing this, there is no way to ensure that all parties execute the listing agreement. Your failure to follow the law could mean you end up wasting your efforts and find yourself in a lawsuit or grievance. Keep in mind that at closing, all owners must sign the deed to convey the entire interest in the property. If an ex-spouse is unaware the property is listed, it is unlikely the ex-spouse will sign the deed once a signed contract is presented. The same is true for estates and family property.

Lastly, when dealing with a divorcing couple, regardless of the status of the divorce, always make sure that all owners of record sign the listing agreement. Neither the Divorce Order nor any amount of cajoling from the divorce attorney changes the record title.  The quickest way to a grievance is to violate the rights of an ex-spouse!

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