Why Does My Spouse Have to Sign the Deed?

Sometimes, when we're handling a real estate closing, a seller wants to know why their spouse has to sign the new deed if the spouse was never on the original deed.

In North Carolina, when a man and woman become husband and wife, the law gives them some automatic rights in each other's property. One of those is the right receive a share in a deceased spouse's estate. This means that, ordinarily, your spouse can't entirely write you out of the will. Sometimes this right can be overridden by a properly done prenuptial agreement or separation documents, but it stays put otherwise.

The spousal right in property happens automatically as soon as you marry, and cannot be taken away by the other spouse just by deeding the property away. For instance, if only a husband signs a deed over to someone and then dies, his wife could still be a partial owner of the property along with the person the husband deeded to. On the other hand, if the wife also signs the deed, then she voluntarily gives up any rights she has in the property.

Any time an attorney is conducting a real estate closing, that attorney will need to have both the husband and wife sign the deed unless a valid pre-nuptial agreement, separation agreement, or other document showing the other spouse no longer has rights in the property is presented. Even then, some lenders tend to be overly cautious and still will insist that both spouses sign.

This answer does not cover all the issues that may come up about spousal rights in property. If you have other questions or comments, please post.

Get it in Writing

I often have clients who have entered some sort of business arrangement with someone but never got the details in writing. If you do this, you are courting disaster, whether the other person is a family member, a friend, or a stranger (sometimes, the closer the person is to you, the worse the problem can be).

Too often, each person who enters this type of arrangement walks away with a completely different understanding of the agreement. the best protection for everyone is to have a well-written contract that sets out the details. Otherwise, you have nothing to show to a court if you wind up having to enforce the agreement later. I sometimes joke that a verbal contract is "worth the paper it's written on" for this reason.

The cost of having a competent attorney put your agreement in writing is a whole lot less than the cost of losing what you thought you had, so before you shake hands on the deal, see a lawyer.

Do you have a horror story to add or a question? Please feel free to post.

I Want to Lien Somebody

Question: Somebody owes me money and I want to put a lien on their property. How do I do that?

Answer: A lien is a document that gets put on record saying that someone has claimed rights in someone else's property pending the payment of a debt. There are several ways that liens can be placed on real estate in NC, but simply going out and filing a paper that says somebody owes you money is not one of them.

If a person owes you money and you can prove it in a court of law, then the judgment you win in court becomes a lien on any property that person owns, subject to some exceptions. Exceptions include any statuory or constitutional rights that may protect some of their assets from seizure, and the fact that your judgment has to be against both the husband and wife for you to go after certain property they may own together (known in NC as a tenancy by the entirety property).

Another type of lien is a Deed of Trust, or mortgage, that puts property up as collateral for a loan. This type of lien was covered in Post One. The property owner has to agree to let this type of lien be placed on the property.

Governmental liens might come up because taxes or assessments have gone unpaid. The governmental body that wants the lien has to follow certain steps before the lien can be effective.

Certain people who provide material or labor for the improvement of real estate can place what's called, in NC, a mechanic's lien, against the property if they are not paid. There are very strict rules about how this can be done, but it provides some protection for people in the building industry. I believe much confusion about liens may come from misunderstandings about this process, which leads people to believe they can simply file a paper against anyone who owes them money.

No matter how or why the lien was filed, it doesn't do much until you enforce it. You acutally have to take the steps to have the person's property legally seized and sold to produce the cash that is owed to you. However, if the person sells the property in the meantime, your lien is public notice to anyone who buys it that the property is subject to such seizure. Often, this means that you will be paid out of sale proceeds so that your lien can be cancelled.

Once the debt that caused the lien to be filed has been paid, you are obliged to cancel the lien from the public record.

As always, if you still would like more information or want to comment, please feel free to post.