A divorce is a difficult experience for any person to endure, especially with the added pressure of carrying the debt of a large asset such as the family home. What happens when a former spouse who has been awarded sole use of the community property by the court can no longer make payments on the loan and an impending foreclosure is looming? Well, that depends largely on the former spouses' ability to cooperate with one another.
When the community regime has yet to be partitioned or is not yet available to be partitioned, there are two ways in which immovable property can be sold. First, the former spouses can each concur in a “juridical act” to sell the property. A juridical act is a “manifestation of will intended to have legal consequences.” Great! So, what does that mean? Well, simply put, it means that each spouse must sign the sales contract in order for the sale it to be valid.
The second, more likely scenario, occurs when a former spouse, likely due to some underlying issue, refuses to sign the sales contract. What do you do then? According the Civil Code, when a former spouse refuses “arbitrarily” to concur in a juridical act, then a spouse may receive permission to sell the home without the other spouse's concurrence - but only upon demonstrating to the court that the sale of the home is necessary, in the best interest of the family, and that the other spouse is arbitrarily refusing, is absent, or is incapable of concurring.
An example of the second scenario occurred in Johnson v. Johnson, 2011-1855 La. App. 1 Cir. 5/4/12, 2012 WL 1580633 (La. Ct. App. 1st Cir. 2012), where the Louisiana First Circuit of Appeal upheld that a former husband could act alone to sell community property without the wife’s signature because it was shown that she was acting “arbitrarily” in refusing to sell the property. It is important that spouses not unilaterally take it upon themselves to enter into a sales contract without the other spouse’s permission or at least without receiving the court’s permission. Not only would this “clout” the title, it would open the selling spouse to a claim by the former non-selling spouse. For example, in Nicaud v. Fonte, 504 So.2d 79 (La. Ct. App. 5th Cir. 1987), the Louisiana Fifth Circuit Court of Appeal held that a sales contract that lacked the wife’s signature in the sale of community property real estate was relatively null. The court returned the parties to the status quo and awarded the purchaser damages in the form of out of pocket expenses and legal interest.
If you have any questions regarding transfers of real estate in Louisiana, please contact Joseph Marriott at joseph@qtsnola.com or (504)834-7171.