Welcome to another episode of the exEXPERTS DIVORCE etc… Podcast where we give you all kinds of information and tips on everything divorce. Why? We’ve lived it, so we get it! We’re T.H. & Jessica.
Jessica: Welcome to this episode of ExEXPERTS podcast, and today we’re really excited to introduce Jill Sodafsky, the Law Office of Jill Sodafsky, who I can personally vouch for as my real estate attorney. She’s here today to talk to us about real estate when it comes to divorce. A lot of it is still relevant regardless of whether or not someone’s married or even if they’re single, but this is a really important topic and a very important subject matter for anyone who is going through divorce to know where you stand with where you live and what your options are. So Jill, welcome. Thank you so much for being here.
Jill: Don’t let the ominousness of the fact that the clouds just rolled over, it got real dark on my end, be a precursor to the conversation.
T.H.: Welcome, Jill.
Jill: Thank you.
T.H.: Let’s just start asking you questions. You live in a house with your family, now divorce has presented to you in one form or another. What are some of the most important things you should be thinking about in terms of the house or apartment, your home, or whatever that looks like, as far as now I’m going through a divorce?
Jill: I think it’s really important to be honest with yourself about your circumstances and whether or not it’s going to be amicable, whether or not it’s going to get contentious, whether or not you guys are on the same page, and what other items you’re going to have to think about in terms of separating. If you’re in an amicable situation and the parties are on the same page, then you don’t have to worry about each getting a separate real estate attorney to represent you. Your interests are aligned. But if it’s going to be contentious, or if you know from the get-go that it’s going to be problematic in some shape or form, you might want to consider getting another real estate attorney so that you’re each represented by somebody else. Especially when you’re selling property, it’s really difficult to do with two real estate attorneys. That’s obviously not the goal and that’s not the hope, but I’ve had circumstances where I’ve represented parties who are getting divorced and I’ve had circumstances that run the gamut from really amicable ones. It was just me representing both of them and at the end of the day, they just told me how they wanted the fund separated, and it was easy peasy. Then I’ve had circumstances where I’ve had one spouse or the other contact me and ask me to do something behind the other’s back or want something included in the contract that protects them over the other. I just have to have a very real conversation with them and let them know that I represent both of them and I can’t legally put one above the other. If that’s a real concern for them, then they need to seek other representation or have a conversation with their soon-to-be ex about what their expectations are so that we can make sure that the contract addresses that.
Jessica: I just want to make it clear for anyone listening that Jill’s not talking about your divorce lawyers and needing two lawyers for representation for your actual divorce.
She’s talking about specifically forget your divorce lawyers, you both have your home lawyers for that, but then when it comes to the sale of your property, if that’s where it goes, she’s talking about you may in fact each need individual representation and each have a separate real estate attorney for the sale of a property.
Jill: Right. And also, by the way, a lot of times people come to me before their divorce attorney. I get people when they’re contemplating divorce and they’re thinking about how they’re going to parse out their assets. Sometimes I get people who have just finished the process and so there’s a court order that’s going to dictate how things need to get delegated. That’s actually fine because at that point you don’t need to each have a real estate attorney, because I have in writing what my role is, what my steps are, what my marching orders are, and I just follow those. But what I’m specifically talking about is when you don’t necessarily have that yet, and you’re trying to figure out what you’re going to do next. You might not be in agreement, but at the end of the day, we’re really just trying to get the property sold so that the parties can move on with their lives or move on to the next thing that they need to distribute and just get the property portion out of the way.
T.H.: Are you ever brought in through to the negotiation process? If they’ve hired a mediator, why wouldn’t they just bring you into that so that you’re representing them as far as getting rid of the home and do it all at once? It almost sounds like you’re a mediator just for the sale of your home. Do you go into the whole negotiation process? Wouldn’t that be more efficient?
Jill: I don’t come in with what you’re talking about with mediation, that step of it, but I’ve definitely had instances where clients are getting divorced and the divorce attorney reaches out to me, and I have lots of conversations with the divorce attorney. But you have to remember, a lot of times when it gets to that contentious point, they’re not ready to sell yet, because they’re still having so many battles internally, that they haven’t put it on the market, so they’re not ready for me. Unless we’re talking about a perfect situation in which people had decided to sell a property and then decided to go through a divorce, so now they’ve already named me and they know that I’m going to be a part of that process. Most times in those contentious issues, I’m not coming in until after a court has decided or there’s just some sort of an agreement that the parties have come to with the divorce attorney themselves about how to proceed. I definitely help out with the divorce attorney, they’ll call me and we’ll talk about it. Sometimes there are two divorce attorneys because things do get contentious, and I’ll be on a call with all of them doing a conference call trying to figure it out so that my next steps are really clear once it actually is ready to come to me.
T.H.: Does client privilege apply to you then in this case? If one party went to consult with you and then, in the end, you can’t represent both of them because it’s contentious, you’re obligated to the first party that’s come to meet with you going through a divorce?
Jill: Right. That’s a really tricky question, because quite frankly, thank goodness I’ve never really had to deal with it because usually the parties will come to me together and say we are getting divorced. I’ve not had a situation where they’ve come to me and wanted me to represent them together and then it’s gotten to a point where they’ve separated and someone has gotten another counsel. But I’ll tell you that for the most part, I’m not privy to so much personal information in those instances that it would affect the party that I’m not representing anymore. However, if that ever happened, quite frankly, I would simply recuse myself from the transaction and just say, at this point, when you guys came to me vs. where you are now, the situation is very different. I think it’s in both of your best interests if you get two other attorneys to represent you in this sale.
T.H.: That’s actually really good advice and a red flag to look out for if you’re in this situation because you don’t want to have a conflict of interest. They want an attorney like you who will do the right thing and step away from the situation. That’s just a good tool and advice for someone to go to use.
Jessica: I want to know, now for anyone who already either is getting divorced, is finishing finalizing their divorce, or it’s over, and now they’re on their own, and now they actually want to move forward with securing a new home for themselves, and they come to you because they need some guidance on that kind of thing. I think a lot of times, and in a lot of places, there’s a lot of crossover in some ways between the lawyer and even a real estate agent. What would some of the most important first steps for someone to really think about if they want to try to move forward with buying a house or an apartment of their own?
Jill: Well, first of all, I have to acknowledge it’s really funny because my job encompasses the best of the real estate, legal aspect, and also being a counselor because people can’t differentiate when they’re really up in their fields and they’ve got so much going on emotionally. It’s really hard for them to see the forest through the trees. They need somebody that they can put their emotions on and that they can talk to you about those things. I love that part of the job. We’re talking specific to New York City by the way, to New York law, but I will say that what happens is my client will say to me, usually when they’re selling, either I’m going to take some time and rent and look at things and kind of reevaluate, or I’m selling and I’m using the proceeds from the sale to purchase. If they’re taking time to reevaluate, I typically won’t hear from them until they’re they’ve already got their feet under them and they’re ready to move on to the next steps. But if they have a decision at the beginning that they want to do both, then what they’ll say to me is, someone will contact me separately and say, even though me and my spouse are separating or divorcing and we’re selling, I would like to talk to you about my purchase now. That’s happened before. They’ll say, maybe we’re using an agent, or my partner picked the agent for the sale, and I don’t want to mix that energy with the new process. I need a referral from you, or what do you recommend? Quite frankly, the questions with respect to divorce and with going and finding another property are going to be the same questions that I get for the most part when there’s no divorce and it’s just a first time homebuyer or somebody who’s trying to navigate the circumstances for the first time, in terms of do I need my own agent? Is this going to be something that they’re going to be made aware of? Can this be private? Do you have to tell them that I’m doing this? Which by the way, the answer is of course, no. Even if I’m representing two people in a sale, you’re your own individual person on a purchase, and it’s a completely separate transaction. As long as the funds were legally obtained and I’m working within the confines of the money from that sale and whatever additional steps you want to take financially, that has nothing to do with that prior transaction. That’s completely separate. You want to put together a good team, whether your broker or your attorney, you want to find someone you’re comfortable with, someone that meshes with you personality-wise. I can be a smartass, and I can also be a bulldog. I have certain aspects of my personality that people are either going to mesh well with or be turned off from. I think that’s why it’s important to talk to a few different attorneys and get a really good sense. Talk to people who have been through it before. Who do they recommend? Who have they used? Reach out, have those conversations, and have a very frank, transparent conversation. I always lead with full transparency. I always talk about money first, because I found that no matter what I have to say, that’s really the question that people want to start with. Just be really open to the conversation and also pay attention to how you feel. As the client, when you talk to somebody, if you don’t get a good vibe, don’t dismiss your instincts. There’s a reason you have them.
Jessica: Yes, but I will say, and we always talk about the importance of making sure that you’re interviewing the experts that you’re going to work with as part of your team. I will say though, coming from my own personal experience with Jill, first of all, the money is totally worth it. And secondly, I do think that with anything in life, if you have a meeting with someone and you click and mesh immediately like we did, you don’t have to go out and meet three other people. Trust your gut. If you don’t feel a good vibe, then it is important to go and talk to some other people. But don’t feel like there’s a specific you have to meet with this number of people in order to find you know your people.
Jill: I’d also say, by the way, be really open to what these experts that you’re speaking to are saying to you because there’s a reason that they’re known in their field for what they do. There’s a reason you are coming to them from the beginning, right? For example, when I’m dealing with clients that are not married yet and are looking to buy a property together, because it’s happening so much these days, whether you’re roommates or you are in a relationship, you have to protect your interests because no matter what we know now, we don’t know what three years later that relationship is going to look like.
Jessica: That’s right.
Jill: That’s why you guys are here. Nobody goes into any kind of relationship, whether friendship or otherwise, with an expectation that that relationship is going to end. But they do sometimes, and you have to be prepared for that. I’ve had clients contact me who were dating, who have asked me about how to protect their interests. One couple, in particular, one of the parties was super adamant and anxious about wanting to protect his interest in the property should the relationship go south. I said we’ve been talking for five minutes and this is the biggest thing that you have to say right now. Are you sure you want to purchase together? Because sometimes you go into a process –
Jessica: That’s a sign!
Jill: Yeah. It’s a big sign. And I say if you don’t think that you’re going to navigate the actual process of purchasing together, well, that’s the easiest part of the whole thing.
Jessica: They’ve got to reevaluate the situation.
T.H.: That’s what I was going to also ask, which is associated with this. When you’re going through a divorce and you’re learning all these things on either side, the man about the woman, the woman about the man, the money, or whatever, the first thing that would come to my mind as far as your property is making sure your name is on the deed of that house or that apartment. What are some red flags or things that people should be checking as far as their home and ownership and stuff like that as they’re sorting through their financial and asset situation? What should they be looking out for?
Jill: When you’re purchasing a property together, depending on what kind of property it is, if you’re in New York City and you buy a co-op, you’re looking at a stock and lease. It’s not actual ownership; it’s shares of a corporation. When you’re buying a house or a condo, you’re looking at an actual deed. The problem is that sometimes when you’re purchasing, you can’t both go into it equally, and someone’s got more money they’re coming to the table with.
Sometimes when you’re buying, you need a guarantor, or the money is going to come from maybe a gift from your parents or something like that. There’s different ways you can take ownership of property. There’s three ways. One, if you’re married, you’re taking ownership as tenants by the entirety. Let me also just be clear in saying all these things that, although I very much know what I’m talking about, and I would obviously want to rely on what I’m saying until you speak to a real estate attorney about your own specific circumstances, you can’t take what I’m saying as gospel, because every circumstance is unique, which is what I love about my job. Every day is different, and every piece of information is unique dependent. Just take it with a grain of salt for what it is, maybe a starting point, but certainly, seek your own legal counsel for that. Tenants by the entirety is when you’re married, and they use that instead of saying, husband and wife, wife and wife, husband and husband, they don’t do that anymore and now it’s tenants by the entirety. Then there’s joint tenants with right of survivorship, which actually was created to give the same protection to same-sex couples that heterosexual couples had because they couldn’t be called married because they weren’t legally married. Then you’ve got tenants in common. Tenants in common just mean that god forbid one of the partners passes, it goes through their will however they delineated who would be their next of kin. Whereas with joint tenants, by operation of law, you both own 100% individually, so that if something happened to one of you, you don’t have to go through probate court, you don’t have to go through all that rigmarole, and automatically it would pass to you by operation of law. There’s three different ways to own, and what I would say is this is a really good test for couples that are not already married. How do you want to take ownership? Do you want to go in, even though you’re not going in 50/50, that you both owned 50/50? If something happens to one of you, is it supposed to go to the other? Is that what the plan is, or if you’re not married, you want it to go to someone in your family like a brother, sister, friend, parent, or whatever if something were to happen in that relationship? And so it’s a really good idea, and I recommend it. I always ask my clients what their relationship is as soon as we start talking because if you are not legally married, you want a side agreement. We want to talk about that. We want to have all those really uncomfortable conversations now, and we want to lay it out crystal clear so that if the relationship goes south, you all know already what the plan is. Are you going to allow someone to live there and pay rent? Are you going to force the sale, because you can’t agree to that? Who’s going to cover the maintenance cost? Who’s going to cover the mortgage? Who’s going to cover the insurance to handle all those things? When you’re happy and you’re excited and you’re in love, it’s a lot easier to make those decisions than when you are not.
T.H.: We’ve spoken to a lawyer about prenuptial and postnuptial agreements. So you get married, and then once you’re married if you then decide to get a house, and like you said, so I put in 40%, he puts in 60%, and we’re agreeing even though we’re married, that if anything should happen, he gets his percent and I get my percent of whatever we end up with and went in with. But my question really was, for example, if you’re both on the deed of the house, can she or he sneakily take your name off of it?
Jill: No. Basically, when your names are both on it, you can’t do anything without the other’s approval, even if it’s just 1% ownership, which a lot of times people will do. They’ll get 1% and the other person 99% because the one with 1% is actually giving more money but isn’t going to be an active owner, but you can’t do anything without that. I’ll also say, just to briefly touch on mortgage stuff, that it’s really important to know that if you are on a deed and that is how you got your mortgage, and you want to change the deed, you have to get the bank’s approval or it will accelerate that clause in the mortgage that makes the mortgage all come due immediately. Obviously, the bank’s not going to really know that unless they’re searching or you’re late on payments, but you want to be really transparent with them. For example, say I buy a property and it’s just me, and I want to add someone to the deed, I can do that all day long, that’s not going to change. If I have a mortgage and my name is on a deed, I can do that all the time. Now, when it comes time to have two people on a deed and now they’re divorcing, and they want to remove someone’s name, because they don’t want to be responsible anymore unless you refinance or pay off that mortgage and sell it, you can’t just take your name off if it’s on the bank documents. It has to be confirmed first.
T.H.: That’s good to know, because you become very suspicious of everything, even if it’s amicable, you might wonder. It’s nice to know that’s not one of the things you have to worry about.
Jill: Yeah, absolutely.
T.H.: And make sure your name is on it when you do buy it.
Jessica: That’s right.
Jill: Don’t take someone’s word, by the way, that they’re doing it for this reason now and that they’ll change it later. Because number one, that happens a lot by the way, and there are reasons for it, right? Sometimes it happens, because you’re buying in a co-op in New York City, and co-ops don’t like to see that you have another property if you haven’t sold it yet, because they might think that you’re buying this as a pied-à-Terre and they don’t want that. They might say, look, you own this just in your name even though we’re together, so let’s just keep you off of it. We’ll say that you might be an occupant, but I’ll be the one who buys it, and we’ll change it later. The problem with that is financial by the way. You have to pay a co-op attorney, you have to change the docking lease, and you have to alter the transfer tax documents at a later date. There are a lot of costs that are incurred with that on top of the other ramifications. You would obviously want to seek legal guidance on that. But absolutely, if the goal is for both of you to be named on paper and you want to make sure that someone can’t take that property out from under you, you both need to be named on the deed or the stock and lease.
Jessica: There’s so much more to dive in on all of this, but we definitely need to wrap it up. Jill, this is such amazing information, and thank you so much for bringing it to the ExExperts community, because it really is such a crucial topic for people to be able to know and understand what their options are and what their rights are with these kinds of things. If someone wants to reach out to you directly and speak to you, what are the best ways for them to find you?
Jessica: We’re going to have all of that information on our site as well. We’re definitely going to schedule another time to have you come back and dig even deeper. Thank you so much for taking the time.
Jill: Thank you for having me. I appreciate it. It’s been lovely.
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