What do you do if your ex-spouse fails to refinance the marital property as stipulated in your decree for divorce? In Part 1 of this series (see: Partition Action In Ohio Breaking Up Is Hard to Do: Especially if you own Real Estate together and Aren’t Married) we described the problems with unmarried couples owning real estate and we discussed partition actions as a remedy. In Part 2 of this series (see: Breaking up is Hard to Do especially when Divorcing, Own Real Estate and Both are on the Loan) we discussed the problems in a divorce when both parties are on the loan for the marital property. Major problems exist if an ex-spouse receives the marital home in a divorce but fails to refinance the loan when the ex-spouse is still an obligor on the loan. Both spouses remain liable to the lender. In addition to the risk of the ex-spouse defaulting on the loan, the liability for that loan will remain on the other spouse’s credit report making it difficult if not impossible to obtain financing for another home.
In the recent case, Tenney v. St. Clair, the Sixth Appellate District of Ohio provided us with an insight on a remedy for a party to a divorce, when the ex-spouse cannot or will not comply with a decree to refinance the real property from the marriage. In this case, the parties divorce decree awarded the real property to the Husband contingent upon refinancing the property within 60 days and Husband’s payment of $28,300 as Wife’s equity interest in the real property. The Husband failed to perform on both obligations. The Wife filed an action for Partition of the real property.
An action for Partition is utilized to divide or sell the real property owned by co-tenants. An action for Partition is controlled by Ohio statute under O.R.C. 5307. The Wife claimed that the property could not be divided and therefore should be sold as the alternative provided under the statute. Her lawyer filed a motion for summary judgment claiming that she was entitled to compel a partition of the property as a matter of law and therefore a trial on the merits was not necessary. Her Husband’s lawyer answered arguing that the partition complaint was an impermissible collateral attack on the decree of divorce and moved to have the partition action dismissed.
The trial court agreed with the Wife and held that the award of right and title to the property to the Husband was contingent upon the Husband obtaining financing within 60 days, and because this obligation was not fulfilled, the Parties remained as co-tenants to the property. Therefore, the trial court concluded that the Wife was entitled to file the Partition action. The trial court ordered the sale of the property.
The Husband appealed the trial court’s decision to the sixth Appellate District. The appellate court stated that the case turns on whether the parties’ property rights were finally and completely adjudicated in the divorce proceeding. If they were, the wife could not bring the partition action. Upholding the trial court’s decision on summary judgment for the Wife, the appellate court held that since the Wife did not receive payment for her interest in the real property, her rights were not fully adjudicated in the divorce proceeding. The appellate court stated that the action for partition was a viable alternative to ensure satisfaction of the Wife’s rights under the divorce decree.
When real estate is involved, it is imperative to have an attorney knowledgeable in the area to properly advise you. When a divorce occurs and there is real estate involved, it is imperative to have an attorney that is not only knowledgeable about divorce law, but also real estate law to effectively maneuver you through the complications of your situation.