Married people often put both of their names on the deed to their home. Sometimes, a parent or other person will also be on the deed with the married couple. If two is company, three is a crowd…especially during an Illinois divorce.
Why Are Multiple People On A Deed In Illinois
Both spouses on a deed to a house makes a lot of sense! If the deed is held by two spouses in joint tenancy and a spouse dies, the other spouse keeps the entire house.
If the deed is held in tenancy by the entirety by two spouses, there is a right of survivorship and the house cannot be sold if the one of the spouse’s gets sued.
Married people can use the credit or money from some third party to buy a home. That person will often insist on a stake in the ownership of the home by putting their name on the deed.
When additional people are on the deed beyond two spouses…the property is usually held by as tenants in common.
Tenancy in common is ownership “by two or more persons, in equal or unequal undivided shares, each person having an equal right to possess the whole property but no right of survivorship” Black’s Law Dictionary (11th ed. 2019)
When additional people are tenants in common on a deed in Illinois, unless there is a contract specifying what shares each person owns, they each own an equal share.
“Where two or more persons take as tenants in common…under an instrument which is silent in regard to their respective shares, there is a presumption that their shares are equal.” Castle v. Hulcher, 312 NE 2d 836 – Ill: Appellate Court, 5th Dist. 1974
What Happens To A Property With Multiple People On The Deed In An Illinois Divorce?
An Illinois divorce court cannot even make an order regarding a real estate property in an Illinois divorce if there are multiple people on the deed.
“Courts are not authorized in divorce proceedings to order disposition of property interests of third persons who are not parties to the proceeding…. Deviation from this rule denies the third party a day in court.” In re Marriage of Simmons, 409 NE 2d 321 – Ill: Appellate Court, 1st Dist. 1980
An Illinois divorce court must include the third party on the deed to a marital property if the Illinois court wishes to properly finalize the divorce.
“In distributing property, courts should seek a high degree of finality so that parties can plan their future with certainty and are not encouraged to return repeatedly to the courts.” In re Marriage of Hellwig (1981), 100 Ill. App.3d 452, 459, 426 N.E.2d 1087, 1092.
If finality can only be achieved by including a third party, then an Illinois divorce court can and will include that party.
“The court may join additional parties necessary and proper for the exercise of its authority under this Act.” 750 ILCS 5/403(d)
“[A] third-party holding alleged marital property should be brought into the dissolution proceeding by a third-party complaint and proper summons” In re Marriage of Peshek, 412 NE 2d 698 – Ill: Appellate Court, 1st Dist. 1980
There’s no way around it. The third party must be included in the divorce. It’s necessary to include in the divorce someone “whose presence in the suit is required for any of three reasons: (1) to protect an interest which the absentee has in the subject matter of the controversy which would be materially affected by a judgment entered in his absence; (2) to reach a decision which will protect the interests of those who are before the court; or (3) to enable the court to make a complete determination of the controversy” Lerner v. Zipperman (1979), 69 Ill. App.3d 620, 623, 387 N.E.2d 946. (citations omitted)
If you thought a divorce was bad, imagine having your in-laws being made parties to your divorce.
How Does An Illinois Divorce Court Allocate The Property Held By The Spouses And The Third Party?
The spouses and the third party should have a contract as to how they will all hold the property and what will happen in case they no longer become partners in owning the property…but they almost never do.
If there is a contract between the spouses and the third party, an Illinois divorce court will honor that contract.
“We must presume that the “marital property” will be distributed pursuant to section 503(b) so as to avoid the impairment of any contractual obligations owed to third parties who are not parties to the dissolution proceeding.” Kujawinski v. Kujawinski, 376 NE 2d 1382 – Ill: Supreme Court 1978
Parties will often claim there was a verbal contract or understanding about the property they all held together. This is a shame because only written contracts are binding when those contracts are about land. This concept is called “the statute of frauds.”
Illinois’ Statute of Frauds is as follows:
“No action shall be brought to charge any person upon any contract for the sale of lands, tenements or hereditaments or any interest in or concerning them, for a longer term than one year, unless such contract or some memorandum or note thereof shall be in writing, and signed by the party to be charged therewith” 750 ILCS 80/2
This means that no one cares what you meant to do about a property…unless you put those intentions in writing and signed them.
“[T]estimony cannot control the effect of the deed upon the joint tenancy but that issue must be determined as a matter of law. The deed was unambiguous and its legal effect cannot be changed by parol evidence that it was intended to have a legal operation different from that which would be imported by its terms” Jackson v. O’CONNELL, 177 NE 2d 194 – Ill: Supreme Court 1961
If there is no contract between the spouses and the other title holder(very common), an Illinois divorce court will not know what to do with the property.
“The Illinois Marriage and Dissolution of Marriage Act makes no provision for the filing of a third-party action during a dissolution proceeding to determine the parties’ rights in alleged marital property held by a third person.” In re Marriage of Peshek, 412 NE 2d 698 – Ill: Appellate Court, 1st Dist. 1980
In reality, a partition action is necessary to divide property that was not held exclusively by married parties.
Third Parties On Deeds Mean That It Is No Longer A Divorce, It Is A Partition Action Within A Divorce.
The process for dividing property in Illinois where there is no contract between the title holders is both vague and specific.
“The court shall ascertain and declare the rights, titles and interest of all the parties in such [a partition] action, the plaintiffs as well as the defendants, and shall enter judgment according to the rights of the parties…If the court finds that a division can be made, then the court shall enter further judgment fairly and impartially dividing the premises among the parties with or without owelty.” 735 ILCS 5/17-105
“Without owelty” means without “equality as achieved by a compensatory sum of money given after an exchange of parcels of land having different value or after an unequal partition of real property.” Black’s Law Dictionary (11th ed. 2019)
An Illinois partition action can only divide up a property into portions (you get the front yard, I get the house, and third-party gets the back yard). In Illinois, a partition action cannot award a party money in exchange for their share of the physical property. This makes partitions really impractical.
Houses cannot really be physically divided like an open field can. So, a partition action must order a sale of the property and the allocate the proceeds to the parties.
“If the court finds that the whole or any part of the premises sought to be partitioned cannot be divided without manifest prejudice to the owners thereof…then the court shall order the premises not susceptible of division to be sold at public sale in such manner and upon such terms and notice of sale as the court directs. If the court orders the sale of the premises or any part thereof, the court shall fix the value of the premises to be sold.” 735 ILCS 5/17-105
One non-binding case says that a property subject to a partition action cannot even be sold by a realtor…the property can only be sold at a sheriff’s sale. Stadnyk v. Nedoshytko, 2017 IL App (1st) 152103-U
A forced sale, much less a forced sale at a sheriff’s auction is not how most married couples want to allocate their marital home. Someone usually keeps the marital home after a divorce. So, parties usually come to an agreement to avoid a court-mandated disaster.
Without an agreement, either of the married owners of the property can ask the court to apply the laws in the Illinois Marriage and Dissolution of Marriage Act based on fairness (if not the letter of the law).
“Where…the primary marital asset is the marital residence, and where that asset is held in multiple tenancy between spouses, it is not an abuse of the chancellor discretion to conclude that the public policy embodied in the Marriage and Dissolution of Marriage Act would be circumvented if the partition action were to proceed.” In re Marriage of Clearman, 407 NE 2d 189 – Ill: Appellate Court, 3rd Dist. 1980 (citations omitted)
What a headache! Everyone who includes a third party on a deed and then gets divorced always regrets it. Maybe the divorcing couple could simply agree to pay the third party to sign a quit claim deed to avoid all of these civil procedure hassles.
If the divorcing couple took on debt to get rid of the third party, that debt would be divisible by the Illinois divorce court. It would not be pretty…but it would be prettier than an intervention, followed by a partition action, followed by a sheriff’s sale.
If you are trying to get your spouse and the parent, relative or friend who is on the deed out of your life, contact my Chicago, Illinois family law firm to speak with an experienced Illinois divorce attorney.