Can a Separate-Property Owner sell his house without his wife’s signature in a Community-Property State?
Texas is a community-property state. Many times, one spouse will own the home before marriage as his or her separate property. After marriage, if the parties live in the home together, then notwithstanding the separate property character of the home, the non-owner spouse acquires certain homestead rights.
The non-owner spouse’s homestead rights are possessory in nature. Without the signature and cooperation of the non-owner spouse, the owner spouse can only transfer good title to a buyer but cannot deliver possession. Therefore, it is essential to have both spouses sign the listing agreement, the contract, the deed, and other closing documents.
More specifically, see the following questions and answers:
I am not an attorney and I am not giving legal advice.
The following Q&A is based on many hours of research, reading articles and talking with real estate attorneys, etc.
Every situation and every state or location law is different. Please consult your real estate attorney for any question or concern about the subject and/or any of the scenarios discussed below.
Q1. What is the “Homestead Rights”?
A1. First let me clarify “homestead”, there are two types of “homestead s”,
(1) people use it as “homestead exemption for Tax purposes” which is irrelevant here.
(2) The one that affects the sale of separate-property is “homestead Right which is not ownership”. State of Texas (and perhaps other community-property states), gives that right to the non-owner spouse that other spouse (separate-property owner) cannot sell properties without her consent and approval, regardless if she is entitled to the property or not.
The husband, in this example, is the only owner and is the only one in the title. However, the non-owner spouse (the wife) needs to sign the deed in order the deal goes through.
Q2. What if the married couple never lived in the property together, e.g., it was an investment Property, should they both sign a listing agreement ?
A2. Somebody just had this situation, He owned it before they got married and per his statement: They built a house together and moved in it. She never spent a night in his first house. He did not have her sign the listing agreement and the title company did not require her to be at closing (she came anyway, just in case) or sign off on anything.
That particular title company explained that if she had even stayed one night in the home that they would need her to sign at closing.
Q3. If after living in the Separate-Property house, they purchase a new house and they move in to the house and claim the new house as their homestead, Can the husband sell his Separate-Property house without the wife’s signature?
A3. Still the wife needs to sign an acknowledgement and affidavit of not returning to the previous house. The reason is that, it is possible the couple decide to go back to the first house after a while.
Under some conditions, where the first house has been rented for a couple of years and there is a record of being occupied by tenants for those couple of years, and the couple now live in another house claimed as homestead, some title company may waive the requirements for spouse signature.
Q4. If they had prenuptial agreement indicating that the house will be the husbands' and will remain with the husband after the divorce, could it make a difference and resolve the issue for the husband?
A4. Prenuptial agreement within community-property state (e.g., Texas) has nothing to do with the “Homestead Right” that state gives to the spouse. Non-owner spouse still needs to sign
Q5. Can the husband sells or transfers the title to his three kids from previous marriage, without the non-owner spouse signature, do title companies insure the title?
A5. The husband cannot sell or transfer the title of the house without spouse’ consent and signature. This particular title company does not insure the title in this case.
Q6. Do you have any recommendation that helps the husband, without requiring the non-owner spouse signature?
A6. Really, the husband cannot do it without spouse’ consent and signature. If she refuses to sign and if the husband must sell, he may have to divorce her first.
Conclusion: When taking a listing agreement on a home in that situation, you should always require both spouses to sign the listing agreement and the contract. The title company will require both spouses to execute the deed in order to extinguish the homestead rights of the non-owner spouse.