Divorce & Real Estate Part II

Part I of this article identified some of the issues brokers encounter when listing property which is, or which might become, the subject of a divorce. This article continues to identify issues and discusses some of the general solutions.

Access To The Residence May Be Blocked

A divorcing spouse who does not want the house to be sold may try to block access by removing lock boxes and interfering with scheduling showings. A real estate broker may file a document with the divorce court seeking permission to intervene in the divorce case. Once the broker is made a party to the case, the broker has a right to demand an inspection of the property, and can seek a court order dictating the terms regarding showings, lock boxes, etc. Violation of the court order may result in jail or fines being imposed on the disobedient party.

Divorce Should Be Kept Confidential

The fact that sellers are going through a divorce is one which should not be disclosed by a seller’s agent or a transaction-broker. A seller’s agent and a transaction broker are both prohibited from disclosing what the motivating factors are for the party selling the property. However, a transaction-broker or seller’s agent who fails to disclose information about the other party which would constitute fraud or dishonest dealing could be subject to liability. While a buyer may later complain that the broker did not disclose the sellers’ divorce, on balance, it is safer not to disclose the divorce.

You May Have to Testify In Court

If you prepared a comparative market analysis (“CMA”) for the sellers, you may be subpoenaed to testify in court concerning the value of the residence. Brokers who provide CMAs or in-court testimony should carefully review statutes concerning real estate appraisers. Acting as a real estate appraiser without first obtaining the required license may result in criminal prosecution.

If you are required to testify in court, you will not be paid for your time, unless you are testifying as an expert. If you testify as an expert, you may need to provide certain information before trial, including: a written report; a resume; a list of cases in which you testified as a witness in the past four years, and a list of publications authored by you in the past ten years.

Solutions

You may be able to file a document with the divorce court to become involved in the divorce case and protect your commission. For example, if you are receiving conflicting instructions from a divorcing husband and wife, you may intervene in the divorce case and seek appropriate court orders regarding the sale.

Preventive measures can be taken to limit problems. For example, at or about the time you enter into the listing agreement, check the county records to see who actually owns the property. Sometimes, a divorcing spouse will list the property for sale, but not disclose to the broker that the other spouse is also in title to the property. You can also state in the listing agreement that your client is required to notify you immediately if a divorce, legal separation or annulment action is commenced so that you can take appropriate steps.

Gregg A. Greenstein is a shareholder in the law firm of Frascona, Joiner, Goodman and Greenstein, P.C., a Colorado law firm. His practice areas include Real Estate, Litigation, Family Law, Divorce, and Adoption. Contact Gregg Greenstein.

Disclaimer -- Content is general information only. Information is not provided as advice for a specific matter, nor does its publication create an attorney-client relationship. Laws vary from one state to another. For legal advice on a specific matter, consult an attorney.

GREGG A. GREENSTEIN