Real Estate and Divorce
The house is usually the largest asset, the largest debt, and the one decision that carries the most feeling. It is also the one most often handled badly in a judgment.
Property is where this firm's two main practice areas meet. A divorce judgment can award the house to one spouse, but a judgment does not convey title, does not remove anyone from a mortgage, and does not bind a lender. Those are separate steps, and when they are left vague or unaddressed the parties end up back in court years later, or discover the problem at a sale they cannot complete.
The firm handles the property side of divorce with the same attention it applies to a property dispute, because that is exactly what an unresolved marital home becomes.
Title, debt and the judgment
| Element | What has to happen |
|---|---|
| The judgment | Awards the property and states the terms, including timing, refinancing obligations and who pays what in the meantime. |
| Title | A deed has to be prepared and recorded to move ownership. The judgment alone does not clear the record. |
| The mortgage | Only the lender can release a borrower. A refinance or assumption is normally the only route, and the judgment cannot compel the lender. |
| Property tax | Transfers between spouses under a judgment are commonly exempt from uncapping, but the correct forms still have to be filed. |
Until the mortgage is refinanced or assumed, both people remain liable to the lender. A missed payment by the spouse who kept the house damages the credit of the one who left, and it can block them from qualifying for their own mortgage. The judgment should set a refinance deadline and state what happens if it is missed.
What happens to the marital home
- One spouse buys out the other. Requires agreement on value, a refinance to release the departing spouse, and a recorded deed.
- Sell now and divide proceeds. Cleanest financially. Requires agreement on listing, price, agent, repairs and how costs are shared.
- Defer the sale. Sometimes used so children can finish school. Needs detailed terms on who pays what, who maintains it, how it is valued later, and what triggers the sale.
- Offset against other assets. One spouse keeps the home and the other takes retirement or investment assets of comparable value, with tax differences accounted for.
Investment and other property
Where the parties own rental property, land, a vacation home or commercial real estate, the questions expand. Income producing property has to be valued on its income and on the tax embedded in it. Entities holding property have their own transfer restrictions. Rental property carries tenants, leases and deposits that have to be dealt with correctly, and a transfer that ignores an existing lease creates a problem with a third party who was never part of the divorce.
Property acquired before the marriage, or inherited, raises characterization questions that turn on how it was titled, funded and maintained during the marriage.
How this work runs
- The property pictureWhat is owned, how it is titled, what is owed on it, and what it is realistically worth.
- Feasibility checked earlyWhether a buyout can actually be financed, before a settlement is built on the assumption that it can.
- Terms drafted properlyDeadlines, refinancing obligations, interim costs, and consequences if a deadline is missed, rather than an award with no mechanics.
- Transfer completedDeed prepared and recorded, tax forms filed, and the mortgage addressed, so the judgment is actually implemented.
Questions about property in divorce
The judgment gave me the house. Why is my ex still on the mortgage?
Because a court cannot rewrite a contract with a lender who is not part of the case. Removing them requires a refinance or an assumption the lender approves. Until that happens both remain liable to the bank regardless of what the judgment says between you.
What if I cannot qualify to refinance?
Better to find out before the settlement is agreed rather than after. If a refinance is not achievable, the realistic options are a sale, a deferred sale with clear terms, or a different division of assets. A judgment built on a refinance that never happens creates a problem for both people.
Can we just both stay on the deed for now?
You can, and it needs to be documented carefully. Continued co ownership after a divorce is workable only with written terms on payments, maintenance, valuation, who may live there, and what triggers a sale. Without those, it commonly ends in a partition action years later.
Will transferring the house trigger a property tax increase?
Transfers between spouses pursuant to a judgment are commonly exempt from uncapping in Michigan, but the exemption depends on the transfer being handled and documented correctly. This is worth getting right at the time rather than discovering on a later tax bill.
A judgment does not transfer title or release a mortgage.
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