Getting Settled - Real Estate Services

Unmarried man and woman owned property together. She wanted out and quit claimed her interest to him. Later, she discovered that she was still on the mortgage. She has tried to convince him to refinance and get her off the mortgage, but he has not done so. What can she do?

Answer:

There is probably not much that she can do at this point. If she had not quit claimed the property to him and if she was still on title, she could file a partition action. In a partition action, one or more parties who own property together ask the court to divide the property between them. If the court can divide the property physically, it will do so. However, in this case, in part because of the mortgage, the court would probably have been unable to make a physical division. If that is the case, the court will order that the property be sold and the proceeds shared. If she could have filed such an action, she either would have forced him to settle by refinancing the house and getting her off the mortgage or she would have forced a sale of the house, getting her off the mortgage.

Now that she has quit claimed her interest in the property to him, there is little she can do to get off the mortgage . . . unless she can get a court to set aside the quit claim deed. This problem arose from a misconception that many people who own property together, both married and unmarried, have. They believe that if they lose their ownership interest in property, either by deed or by divorce decree, that they also lose their liability on the mortgage. That is not true. The obligation to the mortgage company exists regardless of whether one party transfers their ownership interest to the other or not. Consequently, if the owning party fails to make timely mortgage payments, it destroys the credit rating of the other party. If the mortgage company is not paid, it can sue both parties to collect the amount owing.

This issue is big and complicated. The woman needs assistance that exceeds the scope of a real estate license. She should be strongly encouraged to seek legal counsel.

12/6/04