Germans getting divorced in Germany - what happens to lot


#1

We are both Germans and live back in Germany.

We jointly bought an empty lot for later retirement on Lake Norman, paid for out of my funds. No mortgage on the lot.
Wife committed adultery last summer, still is with her friend and then moved out in December. Seems like divorce will happen later this year.
I still plan to later build a house on the lot and spend part of my time there, she has no interest anymore.

We are trying to negotiate a separation agreement in Germany whereby she would deed her 50% of the lot over to me in exchange for some shares. I cannot afford to pay half market value and she said she did not want full value. In case she accepts the agreement I have a question I post separately.

But there is more to the agreement like alimony etc. So if we do not come to an agreement, she continues to own 50% of the lot, and a German divorce judge will not touch that issue. For him we both just continue to own 50% so nothing to settle there. What could happen then?

To plan my negotiation tactics I need to know my risk. What would she have to do e.g. to then force a sale of the property.

Could she go to a NC court and force a forclosure of the property to get 50% of the value, or could she force me to buy her out or what could happen? How lengthy and costly of a process would that be for her and me?
If she can’t force a sale or foreclosure I might just keep her as a 50% owner, of course then her share grows in value if I ever build a house on the lot, also not so good ? Or could I limit that by showing that the house was build after a divorce etc?

Or if she could force a foreclosure would this be an opportunity for me to buy her out “cheap” as the market is pretty down now? How much can be expected these days in such a sale? Half of the tax value or full tax value or what should I expect?

Sorry if those where too many questions, but thanks for shedding some light on what is an even more complicated issue of you live abroad!


#2

This issue really needs to be dealt with as part of your Separation Agreement in Germany. Germany can indeed enforce an agreement with respect to property the two of you own, even if it is here in the US.
If you plan to keep the lot and build a home there, your wife needs to be removed from the deed prior to you doing anything with the property. If you do build with your wife still on the deed she could, down the road sue to partition ( force sale) the property in order to get her 50% share, which will be a much higher value down the road after improvements are made to the land.
Your wife could not foreclose on the property as she would not hold a mortgage on the land, but she would be half owner. If you do nothing with the property as part of your separation agreement you will not have the rights to proceed under the laws of equitable distribution in the future. This means that the value of the property would be the value at the time of partition, not at the date of separation, as your marital relationship would not be taken into account, you would simply be treated as joint owners, each owing 50%.
My best advice is to pay her out for her share of the property now in exchange for her signing a North Carolina Special Warranty Deed conveying her interest in the same to you. You may want to consider taking a mortgage on the property to pay her for her share of the value.


#3

Erin,

thank you very much for the comprehensive reply.

At present it looks like my wife might sign the suggested separation agreement, although I will not know for sure until it is signed. I have set her a deadline of end of February.

In case she signs it, this will mean she will also sign all documents necessary to deed her 50% of the lot over to me. So here comes my second question for that case:

Will the Special Warranty Deed you suggest be enough, or do we or she need to sign something else. The real estate lawyer we used 4 years ago when buying the lot mailed me a while ago a “Free Traders Agreement” we should sign in addition to a “General Warranty Deed”, but I got confused as to if this agreement would work retroactive for property acquired before the FTA was signed, and the lawyer never got back to my answer. From googling on Special Warranty Deeds I saw an example, where the separation agreement was referenced in the Special Warranty Deed, so would you reference our German separation agreement in the deed?

I understand you work out of Charlotte, so would you be able to draft the deed and what else is necessary and file it in Catawba County and what would be your total fee for this?

Thanks a lot!


#4

You do not need a Free Trade Agreement unless you plan on buying another piece of land before you are divorced.
The Special Warranty Deed is used rather than a General Warranty Deed as the transfer is not an actual sale and there are no excise taxes. The language in the deed should refer to the rights she is releasing . As an example:
In is intended that this conveyance is made pursuant to North Carolina General Statutes, Section 39-13.3© for the purpose of severing the existing tenancy by the entirety and conveying said property in fee simple to Grantee. It is intended that this conveyance is made pursuant to the provisions of North Carolina General Statutes, Section 52-10 and Section 29-30(a)(2) to extinguish any claim by the Grantor of any marital interest in said property which shall be the sole and separate property of Grantee, and it is the intent of the parties that this extinguish any present or future claims of Grantor for equitable distribution which may arise under North Carolina General Statues, Section 50-20 et. seq. The purpose of this conveyance is to sever the tenancy by the entirety in the property described herein pursuant to N.C.G.S. § 39-13.3 © [or, in the alternative, to transfer ownership pursuant to N.C.G.S. § 39-13.3 (a)] and to vest sole title in the name of Grantee, and to allow Grantee to henceforth convey and encumber said property or any portion thereof without the consent or joinder of Grantor. Grantor hereby relinquishes: (1) All rights to administer the Grantee’s estate as provided in N.C.G.S. § 28A-4-1 with respect to the real property described herein; (2) All right of intestate succession to the Grantee’s estate as provided in N.C.G.S. § 29-14; (3) The right to an elective life estate in the Grantee’s estate as provided in N.C.G.S. § 29-30; (4) The right to dissent from Grantee’s will as provided in N.C.G.S. § 30-1; and (5) The right to a year’s allowance in the Grantee’s estate as provided in N.C.G.S. § 30-15. It is the intention of the parties hereto that the property described herein shall be considered separate property of the Grantee pursuant to the Equitable Distribution Act (N.C.G.S. § 50-20 et. seq.) and Grantor relinquishes all right or claim to said property provided in said Act. This deed is made pursuant to a Property Settlement Agreement between the parties hereto, and is for valuable consideration set out in said agreement.

We here at Rosen do not work on an hourly basis, which all you would need to complete the deed. I suggest you contact an attorney who does real estate law to draft the deed.