Divorce affects couples' real estate

Mailbag

April 11, 1999

Dear Mr. Azrael:

My question concerns a deed on a property taken out by joint tenants in entireties.

Subsequent to the execution of that deed there was a divorce, and the property is still held by both myself and my ex-spouse. I'm wondering if I need to change that joint tenants by entireties or does it change automatically. How would I deal with that?

Karl Goslin Artemas, Pa. Dear Mr. Goslin:

Couples who get divorced need to carefully consider the effect their divorce will have on real estate they acquired together while married.

Husbands and wives usually title their home, and perhaps other real property, as tenants by the entireties. This form of tenancy means the husband and wife own the property together. One spouse cannot sell or mortgage any interest in the property without the other signing the contract, deed or mortgage.

A judgment or tax lien against only one spouse does not constitute a lien on real property owned as tenants by the entireties. Only spouses can own property as tenants by the entireties. Once there is a divorce the parties are legally considered to own the real property as tenants in common. This tenancy means that each ex-spouse owns a one-half interest in the property.

A property interest owned as tenant in common can be sold or mortgaged without the consent of the other tenant(s) in common. A judgment or tax lien against a party owning property as tenant in common is a lien against that party's interest in the property.

Because divorce affects the way real property is titled, careful planning may avoid undesirable results. Let's say a husband and wife own a house worth $150,000. A creditor of the husband holds a judgment against the husband for $10,000. When a husband and wife own the home as tenants by the entireties, a creditor cannot enforce the judgment by attaching and selling the parties' house.

If husband and wife divorce, the creditor's $10,000 judgment automatically becomes a lien on the husband's one-half interest as a tenant in common. A creditor can enforce its judgment by attaching and selling the husband's one-half interest.

In the example cited, the husband and wife could have avoided a lien against the home by transferring it to the wife before their divorce, as part of a property settlement. That way, the $10,000 judgment will never be a lien on the house.

Specifically for you, Mr. Goslin, after divorce, you and your ex-spouse own the real property as tenants in common.

The two of you are both still liable for 100 percent of any mortgage debt you created on the property during your marriage. Each of your one-half interests is subject to the claims and liens of your individual creditors. Each of you can sell, transfer or will your one-half interest. Either of you probably can force a sale of the property by instituting a court action.

In short, after the divorce, you and your ex-wife have a new ballgame as far as ownership of your real estate is concerned.

Questions?

The Sun invites you to send real estate questions to Mailbag. Questions will be answered by Jonathan A. Azrael of Azrael, Gann and Franz of Towson.

Questions -- including name, address and daytime telephone number -- may be sent in the following ways:

Mailing address: Real Estate Mailbag, Fifth Floor, 501 N. Calvert St., Baltimore, MD 21278-0001. Fax: 410-783-2517. E-mail: real.estate@baltsun.com

Call our Sundial audio-response number, 410-783-1800. Enter code 6170 after the greeting.

Pub Date: 4/11/99

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