Divorce and Real Estate

Real property refers to land and anything attached to the land, like houses, buildings, and fixtures.

Mobile homes are not considered real property unless they are permanently attached to the land. In that case, only the land itself would be classified as real property.

Before dividing real property in a divorce, you need to determine whether the property is separate or community property.

• Separate Property: Property you or your spouse owned before the marriage, or received during the marriage as a gift or inheritance. It can also include property bought with separate funds. For example, if you used gifted money to buy a house, that house would still be considered separate property.
• Community Property: Property bought during the marriage using income earned during the marriage.

Read Community Property to learn more about the differences.

If both spouses received property as a gift or inheritance during the marriage, it remains separate property, with both spouses being co-owners, each holding a half-interest.

Even if only one spouse’s name is on the deed, any property bought during the marriage is presumed to be community property, unless it was bought with separate property funds. The spouse claiming it as separate property must prove it in court.

If the real property was separate property but refinanced during the marriage, it remains separate property. However, if both spouses’ names are on the refinancing documents, it might be argued that the property was partially gifted to the other spouse.

• Separate property: The court cannot award separate property to the other spouse. However, the spouse claiming it must provide clear and convincing evidence proving it’s separate property.

• Community property: Real property that’s community property will need to be divided. This often involves selling the property and splitting the proceeds or having one spouse keep the property while compensating the other for their share. If the parties cannot agree, the judge may order the sale of the property or award it to one spouse.

• One spouse stays in the home: The spouse may agree to keep the house and take on the debt.

• Division of equity: One spouse may keep the house and give the other half of the equity, or other assets may be used to offset the value of the house.

• Court orders: If the spouses cannot agree, the judge may order the house sold or awarded to one party.

If you move out during the divorce, you do not give up your rights to the marital home. However, the court may take this into account when dividing property.

If the judge orders or the parties agree to sell the house, both parties must sign the necessary closing documents. The divorce decree should include a detailed legal description of the house and the timeline for completing the sale.

The final divorce decree should specify which spouse receives the house and who is responsible for the associated expenses. The spouse not receiving the house must sign a Special Warranty Deed transferring their interest to the other spouse. This deed must be filed with the County Clerk’s Office.

To remove your name from the mortgage after divorce, the spouse keeping the house must refinance the loan. The final decree should specify how long they have to refinance. Since a court cannot force a bank to issue a loan, the decree can help enforce the requirement if necessary.

It’s a good idea for both parties to sign a Deed of Trust to Secure Assumption, which ensures that the spouse responsible for the mortgage continues to pay it until the refinance is completed.