Divorce And Real Estate Issues Under Florida Law

By Author: Michael Costantino
Total Articles: 2
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In a divorce, if jointly titled property is involved, there will be a determination made as to what will be done with the house. The house can be sold and then the profits split between both people getting divorced, one person can offer to let the other one have it, or the other party will buy out the ex spouse. It will depend upon how the divorce is settled to determine this decision. It is definitely better when things are worked out easily, but sometimes that is not possible and the couple will have to seek the help from an attorney or court system. There are three parts to the disposition of a house inside a divorce. Initially, there's the deed which signifies legal title on the house. The property can either be sold or one party can quit-claim deed the property to the other. The quit-claim deed has the effect of removing one spouse from the title so that the house is legally owned by only the other. Unfortunately, a quit-claim deed is not the end of this problem.Most marital houses are titled in both names. Additionally, the mortgage is in both names as well. There are 2 parts to a mortgage. The 1st is the promissory ...
... note and the second is the security instrument which is commonly called the mortgage. A joint mortgage can cause problems in the divorce proceeding and for years to come.It is very important have a basic understanding of real property law to see the way it can cause issues in a divorce case. A promissory note is simply a promise to pay a particular sum of money. The mortgage gives the bank the ability to repossess the collateral, which in this case is the house, in the event the payments are not made in a timely fashion. If a promissory note is in both spouses name, it does not matter which spouses name is on the deed. The promissory note reflects the debt and if both names are on the promissory note, both parties will remain liable on the debt regardless of whether or not a spouses name is no longer on the deed. As an example , a husband and wife purchase a house. Both parties sign the promissory note. 10 years later, the husband quit-claims his interest in the marital residence to his wife as part of a divorce settlement agreement. 2 years after the divorce, the now ex-wife defaults on the loan payments. The Husband continues to be liable to the bank for the payments on the house even though his name has not been on the deed for two years. The husband is unaware of the default until he checks his credit and finds that, his otherwise perfect credit score, is now somewhere in the 500's. It is because his name was never removed from the promissory note.So how do you remove your name from the promissory note? The bad news is that you can't simply have your name removed by virtue of divorce. The easiest way to have your name removed from the promissory note would be to pay off the note. The best way to effectuate this is to have a "buy out" clause in the divorce settlement agreement. A buy out clause states that the spouse who maintains possession of the house must refinance the property within a specific time frame or sell the residence. The new promissory note for the residence is only in the name of the spouse refinancing the property and accordingly, the spouse who transfered his interest in the property no longer has any liability.Michael J. Costantino is a Florida Divorce Attorney with offices in Broward and Palm Beach Counties. For more information or to schedule an appointment, please call (954)623-6445 or click on the following link to visit our website: Broward County Divorce Attorney.