Closing Explained: Part 7, Divorce Decrees & Title

It’s surprising how often buyers, sellers, real estate agents, and mortgage loan officers ask us why the title company needs a certified copy of a divorce decree for recording to close a transaction. It may seem odd, but this is completely understandable and very common.

A question we always get is, “The property has already been deeded to the ex-wife, why do we need to record the divorce decree?” In Minnesota, we have the “one to buy, two to sell” rule when dealing with real estate transactions. With this comes statutory “marital interest,” which means if you are married, your spouse retains a marital interest in the real estate. When a married couple becomes divorced, the court legally dissolves the marriage and awards the property accordingly with the relevant details. Until the court disposes of the interests of each ex-spouse, both ex-spouses technically still have a “marital interest” in the land or other physical property.  Recording of the divorce decree also gives notice to others that the couple are divorced, whether the marital interest in the land was addressed within the divorce, and that there is no lingering interest of an ex-spouse, such as a lien in favor of the ex-spouse who didn’t get the land.

It’s important to remember that documents recorded with the County Recorder or Registrar of Titles are public, and anyone can view them. If a divorced couple doesn’t want the details of their divorce on the public record, they can have the judge sign a “Summary Real Estate Disposition Judgment.” This document delivers a bit more discretion as it only deals with the real estate involved. Through this, couples can choose to leave out their personal details like income, children’s names, etc. During sensitive times, this document can create comfort in a confidential situation and is easy to obtain.

If you are selling or refinancing real property, and you’ve gotten a divorce, be prepared for your closer to ask you for a certified copy of your divorce decree or summary real estate disposition judgment. If you provide this well before your closing date, it’s a lot less likely there will be a delay in closing due to any issues from the divorce.

I hope this topic helped provide clarity for sellers, buyers, loan officers, and real estate agents. Oftentimes, bringing up divorce decrees can be a very sensitive subject. At TitleSmart, we strive to help all parties be aware of what they may need to produce for a successful closing. Our goal is to create an easy, stress-free transaction, and for all parties to feel comfortable in what they’re sharing.

– Cindy