Division of Real Property with Promissory Note


#1

These are all issues that can be resolved through a separation agreement and property settlement. If they are not addressed by agreement before divorce, then both parties lose the ability to force the other to take action. Therefore it is advisable that you consult with an attorney individually to fully address the outstanding real estate issue before divorce.

Lisa M. Angel
Board Certified Family Law Specialist
The Rosen Law Firm
4101 Lake Boone Trail, Suite 500
Raleigh, NC 27607
(919) 781-1741 direct voice
(919) 256-1660 direct fax
(919) 787-6668 main voice
(919) 787-6361 main fax
NCdivorce.com
email: angel@rosen.com

The response posted above is based upon the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with an attorney, fully explain your situation, and allow the attorney sufficient opportunity to research the applicable law and facts required to render an accurate opinion. The basic information provided above is intended as a public service but a full discussion with an attorney should be undertaken before taking any action.


#2

I have not completed the process, yet, for obtaining an absolute divorce. Everthing was divided equitably by our separation agreement except for real estate and child custody. We just completed the child custody part and have a workable Judgement for that. All of our joint accounts have been closed except for the home mortgage and home equity loan, and all cash payments and distribution of non-real property and vehicles to one another have been completed, so the only thing outstanding is the division of the real estate property.

We have agreed to split the current equity in the home equally, with one party getting the ownership of the home and sole responsibility for the mortgage, maintenance, and all related liens, and signing a promissory note to pay the other party a specified amount (half the current equity) when the first party sells the home.

So, I have three related questions:

  1. What recourse would the party who gives up their half of the house have if the other party chooses not to sell for an extended period of time, or if the party retaining the house dies before selling the house sometime in the distant future?
  2. What would be involved in terms of time and expense if the party who retains, then sells the home does not immediately pay the other party the promised half of the equity under a signed and notarized promissory note? Would one party have to sue the other for that payment?
  3. How can the party who is not assuming ownership of the home file a lien on the property to ensure payment out of escrow at time of closing of half of the equity as specified in the promissory note? What agency would this lien need to be filed with, and would the mortgage holder (bank) need to be involved? Would this be a prudent step to insure against future need for litigation?