Legalities and emotions when your clients are selling due to divorce

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This article was featured on Property Professional. Read more 

Dealing with clients going through a divorce can involve many unexpected twists and turns, from both a legal and emotional perspective.

It can be a minefield for property practitioners to navigate as they will have no idea of the triggers that may escalate into major disputes between divorcing or divorced couples, and this is regardless of whose name is on the Title Deed.

One legal aspect that may not be immediately apparent is the potential involvement of two divorce attorneys in the property sale. Attorneys John Smith & Associates, litigation attorneys and MDW Cape Town Inc – Conveyancers, explain that the process is typically straightforward when the spouses are using the same divorce attorney to draft a settlement that includes an agreement on the property sale.

The property dispute

The waters can, however, get quite murky if the parties are married in community of property where the property is registered in both parties’ names or if they are married out of community of property with the inclusion of the accrual system and the estate of the party in whose name the property is registered has shown a greater accrual than the estate of the other party. This gives the other party a claim in terms of the Matrimonial Property Act, read with the Divorce Act, against the party in whose name the property is registered.

While it may seem logical for the agent to be directed by the party whose name is on the Title Deed, if the other party believes that the owner is attempting to dispose of the property at a price significantly below market value, which could prejudice their claim, they have the right to obtain one or more valuations of the property. These valuations are then submitted to the respective attorney. If the Deed holder does sell at a price that is significantly below the market value indicated by these valuations, the other party is entitled to approach the Court on an urgent basis to interdict the owner from selling or otherwise disposing of the property.

When the property Deed is in both parties’ names, and they are in conflict about the property sale, the agent cannot fulfil the sale’s mandate. Mediation may seem to be the best recommendation, but this is not legally binding. Instead, the agent should request that the dispute be resolved via the attorneys.

The two legal companies—John Smith and MDW—agree that most divorce actions are acrimonious. It is usually only when the parties start paying their legal bills that sanity starts to prevail, and compromises are made.

Navigating emotions

In the meantime the emotional charges that both parties may demonstrate can become heightened if the property is a reluctant sale as part of the divorce agreement, or a necessary evil in advancing the divvying up immovable property. It is likely that the individuals will not have the same outlook on their separate futures and, ultimately, the goals they wish to achieve once the property is settled.

Whether this is made clear to the agent at the start of a property sale negotiation or if it is only revealed during the interactions, it will become clear that each party has their own perception of how they reached the point of divorce. This can become very uncomfortable if those details are revealed to the agent in an attempt to garner sympathy or support.

With little to no soft training around navigating emotional conflict, an agent may feel very conflicted but must never lose sight of reaching at least, an agreeable selling price and commission structure.

Being aware of the potential issues and sensitive to the general behaviours of conflicted divorced/divorcing couples does help, which is why we sought professional advice from Professor Gertie Pretorius. She has been a registered counselling psychologist for some 42 years and a research psychologist for the past 15 years. She is also a Visiting Professor at the Department of Psychology, Faculty of Humanities at the University of Johannesburg.

Professor Pretorius works daily with divorce, high-conflict divorce, and psycho-legal matters pertaining to conflicts about residence and the care and contact of children from divorce (previously known as custody disputes). As such, she is well qualified to provide context and forewarnings to property practitioners who, she says, have an important, and perhaps unlikely, role to play in the divorced/divorcing home sale process, not least of which is when one party may wish to sabotage the selling process.

“This happens especially when one individual is still attached to the other while the other has already ‘moved on’. Yet another stressor is that emotions may still be raw, which can manifest in either an urgency to sell or a need to hold onto the property,” says Pretorius.

Neutrality

Bearing in mind that it is not an agent’s role to mediate, nor likely do agents have the training to do so, neutrality seems key in finding a compromise between the parties. “Attempts to find neutral ground are not easy, however, especially if the agent does not have the background to the divorce, which could cause further escalations in conflict,” says Pretorius.

“While it is good to empathise with the couple (eg. “I am sorry you are going through such a difficult time”), I emphasise the importance of remaining calm and unbiased. And when arguments do arise beyond any attempt by the agent to calm the waters, it is recommended that the agent remove themself from the conversation, allowing the couple space to argue, but with the reassurance that you are there to assist in the process of the geographic separation, which you do understand may be difficult.”

It may be tempting to become involved, especially when it is clear that there may be physical threats or signs of abuse, but “under no circumstances should an agent badmouth one or the other party, or try to step into the fight. Trust can only be established if you remain neutral while trying to de-escalate the conflict. This may mean meeting up with them separately or at another time.”

If it becomes increasingly evident that one or the other party is attempting to garner the agent’s sympathy, Pretorius advises referring either or both to a psychologist for mediation.

Overall, a property practitioner cannot purely look at a divorced property as an opportunity for a quick listing. It has to be understood that the agent is meeting the couple at a crisis point in their lives. In the United States, there are stats showing that 50 per cent of divorce listings fail to sell with the first agent that is hired.  And, sometimes, it may just be that the agent needs to walk away.

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