Legal Question in Real Estate Law in California
Wife Divorce
Wife signed a contract with me to grant me her house once our divorce is finalized.
Can this contract be enforced after the divorce is finalized?
2 Answers from Attorneys
Re: Wife Divorce
If you make that a part of the marital settlement agreement and the judgement of dissolution. You could also request that the court retain jurisdiction to enforce the agreement.
Re: Wife Divorce
Well, maybe. California's Family Code permits, even encourages, divorcing spouses to handle their own property settlement issues, to draw up enforcible property-settlement agreements, and even to make contracts changing the ownership of individual items of property. When you say "her house," I assume you mean that this house was or is her separate property, and you have a contract with her under which you are to receive title to it as part of a property settlement.
The issues that will come up include:
1. Is the contract enforceable under ordinary real estate contract law? This requires offer and acceptance ("meeting of the minds"), consideration, and, to transfer real property, an adequate description of the property and signature of any party against whom enforcement is sought. It need not be notarized. The most likely failing here may be that no consideration is specified. Also, if there is debt against the property, the lender's rights and remedies may have an impact, such as triggering an acceleration of the due date on the loan.
2. Is a contract between husband and wife regarding property valid? Generally, yes; see Family Code sections 1500 and 1620. However, husband and wife during marriage are in a fiduciary relationship and one cannot take unfair advantage of the other, by contract or otherwise, as to their property and finances. See also Family Code section 852 on particular requirements for property transfers between spouses.
3. Finally, there likely will be issues as to how this contract fits in, if at all, to an overall plan to divide the couple's property. The general rule is that a divorcing couple's community assets and liabilities will be divided equally, unless the parties agree otherwise. If this contract looks to the divorce judge like a piece of a marital settlement agreement, it may affect how the rest of the property and debts are divided. Or, the court may treat this contract as having nothing to do with the 50-50 split of community property and liabilities. The result may depend upon whether the couple also has an agreement covering the rest of their property and financial affairs (perhaps including spousal support and custody issues), how much other property there is, and the circumstances under which the home-transfer agreement was negotiated, the consideration given, and the parties' intent.
In other words, there is no one-size-fits-all answer, and if this comes before a court, the judge will try to assure a fair outcome to both within the laws and principles mentioned above.