One of the biggest issues in any divorce or separation is what will be done with real property – a house, a condominium, even a rental unit. The common issues to be resolved are: Who gets the property during and after the divorce? Who is responsible for paying the mortgage and real estate taxes? Is the property sold to a third-party, or can one spouse buy out the other’s interest?
With the post-2008 housing meltdown issues involving underwater homes, short sales, foreclosures, insolvency, cancelled debt income, and exposure to deficiency judgments have become part of the divorce landscape.
The purpose of this blog post is to help potential clients living in the Bergen-Passaic and Hudson-Essex areas understand how the New Jersey real estate and divorce laws impact ownership and occupancy of their marital real estate. This post is the first in a series of related posts dealing with the topic of divorce and the marital home. As always, your questions are welcomed by telephone at 844-431-3380 or via e-mail using the contact form on this page.
The Deed
When you acquired your residence you received a deed at closing. The deed is the document that spells out who has ownership rights in your property. If you don’t have a copy of your deed you can always get a copy from the County Clerk in your county of residence. If you live in Bergen County you can get a copy of your deed at the Bergen County Clerk’s Office, located at One Bergen County Plaza, Hackensack, New Jersey 07601. If you live in Passaic County you can get a copy of your deed at the Office of the County Clerk/Registry Division, Passaic County Administration Building, 401 Grand Street, Room 113, Paterson, New Jersey 07505. Hudson County deeds are available at the Hudson County Register’s Office, 257 Cornelison Avenue, 4th Floor, Jersey City, New Jersey 07302. Essex County deeds can be obtained from the Essex County Register of Deeds located at Essex County Hall of Records, 465 Martin Luther King, Jr. Boulevard, Newark, New Jersey, 07102.
A typical front page of a deed is set out below.
________________________________________________________________________
DEED
Prepared by: (print signer’s name below signature)
_________________________________________
BRIAN D. ITON, ESQ.
ATTORNEY AT LAW – STATE OF NEW JERSEY
This Deed is made on XXXXX, 201__
BETWEEN
XXXXXXXXXXXXXXXXXXXX, MARRIED
whose post office address is
XXXXXXXXXXXXXXXXXXXXXXXXXXX, NEW JERSEY
referred to as the Grantor,
AND
XXXXXXXXXXXXXXXXXXXXXXX, GRANTEE LINE
whose post office address is
XXXXXXXXXXXXXXXXXXXXXXX, NEW JERSEY
referred to as the Grantee,
The words “Grantor” and “Grantee” shall mean all Grantors and all Grantees listed above.
1. Transfer of Ownership. The grantor grants and conveys (transfers ownership of) the property (called the Property) described below to the Grantee. This transfer is made for the sum of XXXXXXXXXXXXXXX AND SUCH OTHER GOOD AND VALUABLE CONSIDERATION. The Grantor acknowledges receipt of this money.
2. Tax Map Reference. (N.J.S.A. 46:15-1.1) Municipality of XXXXXXXXX, Block No. XX, Lot No. XX, Account No.
____ No property tax identification number is available on the date of this Deed. (Check Box if applicable.)
3. Property. The Property consists of the land and all the buildings and structures on the land in the Borough of XXXXXXXXX, County of XXXXXXXXX, and State of New Jersey, more particularly described as follows:
________________________________________________________________________
To determine who has ownership rights in your property you will need to look at the grantee line in the deed. The grantee line sets forth the name of the person or persons who acquired the property, and how they own the property. Normally, the property will be held as either:
- Single
- Husband and wife (H/W) or married
- Joint tenants (with or without ownership percentages)
- Joint tenants with a right of survivorship (JTWROS)
Ownership as Single Person
If you purchased the property as a single person, and then your spouse moved in before or after you were married, then the property is generally, pre-marital property owned by you. However, in some limited circumstances: (e.g. your spouse helps to paydown the mortgage during the marriage, or your spouse helps to substantially improve the value of the property) they may have a claim for a part of the increase in value attributable to their efforts. (It should be noted that a house is usually viewed as a passive asset whose value fluctuates based on market conditions. The spouse who is claiming that they helped increase the value of the house has the burden of proving their contribution, and the amount of the increase in value due to their efforts).
Ownership as Single Person “In Contemplation of Marriage”
As well, if you purchased the property in your sole name “in contemplation of marriage” then the property may be subject to equitable distribution. “In contemplation of marriage” means that you were engaged, or as the definition states “contemplating”, or moving towards marriage. The real question is as the time that the property was acquired was it purchased with the idea that it would eventually be the marital residence. This is a fact specific question which requires a detailed examination of the facts and circumstances.
Ownership as Husband and Wife or as Married
If you purchased the property as husband and wife or as married, then the property is marital property subject to equitable distribution during the divorce. It does not matter if only one spouse’s name is on the deed, or if one spouse put up 100% of the deposit and the other spouse put up nothing, with very few, extremely limited exceptions, once you make a marital purchase of a home it is considered joint marital property subject to equitable distribution.
Ownership as Joint Tenants or Joint Tenants with a Right of Survivorship
If you purchased the property as joint tenants or joint tenants with a right of survivorship prior to your marriage, and then you subsequently got married the property is subject to equitable distribution. If you purchased the property as joint tenants or joint tenants with a right of survivorship, and you did not get married, then if you split up each of you will own 50% of the property, unless you specify alternate ownership percentages on the deed, (e.g. 60% to owner 1, 40% to owner 2). It should also be noted that if you purchased the property as joint tenants and one of you dies, the deceased person’s interest in the real estate goes to their heirs or estate not the other joint tenant. Whereas, if you purchased the property as joint tenants with a right of survivorship and one of you dies the deceased person’s interest in the real estate goes to the other joint tenant (i.e., the survivor gets the deceased person’s share of the property).
How the Method of Acquiring the Property Can Determine Whether It Is Subject Equitable Distribution
As stated above, if you acquired the property by purchase prior to the marriage the property is generally yours subject to your spouse’s mortgage paydown claim, or claim that their actions helped increase the value of the property. However if you acquired the property by inheritance, even during the marriage, the inherited property is generally not subject to equitable distribution. Similarly, if you acquired the property by gift, it is generally not subject to equitable distribution.
I have been a divorce lawyer in northern New Jersey, concentrating my practice in Bergen, Passaic, Hudson and Essex counties, for over 20 years. If you have any questions about what impact New Jersey divorce laws have on real estate that you acquired before or during your marriage, don’t hesitate to call my office at 844-431-3380. Or e-mail me your questions using the blog contact form.