There are many instances where only one party is on title to the house. I am seeing this more and more, and it can present a pretty significant problem in a divorce case.

While a non-titled spouse may have an equity interest in the property, they are not a legal owner — and therefore, not a party to the listing or purchase agreements. After all, one cannot legally sell something they do not own.

By the very nature of the real estate contract, Realtors enter into contractual relationships and have contractual duty only to the titled owner(s). Further, escrow and title companies only owe duties and recognize the person on title. All entities in a real estate transaction only recognize titled owners.

What this means practically for a non-titled spouse in a divorce case:

• They have no authority over list price or price reductions, choice of brokerage, length of listing, commission paid, marketing, open houses, lockbox, or the sign in the front yard.
• They have no authority over offers, counteroffers, repairs, length of escrow, closing costs paid to buyers, or even the choice of buyer.
• The Realtor has no obligation, duty, or permission to take instruction from or communicate any of the particulars of the transaction to them or to their attorney. In short, their role in the listing and sale transaction is nothing more than that of a tenant’s.
• And perhaps the biggest dilemma for the non-titled party is that they have no control over the distribution of proceeds from the sale.

Note that a lis pendens does not give back a non-titled spouse’s authority. It’s only a red flag to the closing officer that it must be released. By the time a lis pendens is addressed, these real estate-related contractual terms have already been agreed to.

These are just some of the issues that arise when only one party is on title. If you represent one such party and the house is to be sold, you may want to consider appointing a CDRE™ and include verbiage that the CDRE is to communicate equally with both parties — and if there’s a disagreement, they are to notify counsel before any documents are executed.

If you have a case with real property issues or one that needs to be listed, give me a call at the number below or send me an email  — I’m happy to help!