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  • Writer's pictureDale Carstensen

Financial Restraining Orders

Restraining orders. They're a thing. And with divorces in the state of Oregon there are several different kinds. Did you know that there are financial restraining orders, prohibiting all parties involved in the divorce from transferring or disposing of a property in which the other party has an interest? And that such restraining orders are automatic?

Some divorces are amicable, some are contentious, but all of them have a few things in common. Every divorce has a petitioner (the leavor) and a respondent (the leavee). The petitioner files the initial petition and serves the other party. The respondent has a certain amount of time to file their response with the court. When the petition is initially filed, it sets in motion a number of events that are automatic and binding. The event we'll be discussing is the one that has to do with real estate. While it's reasonably straight forward, the consequences may take some time for both parties to understand.

ORS 107.093 (in part) says:

After a petition for marital annulment, separation or dissolution is filed... a restraining order is in effect against the petitioner and the respondent until final judgement is issued. The restraining order issued under this section shall restrain the petitioner and respondent from:
Transferring, encumbering, concealing or disposing of property in which the other party has an interest, in any manner, without written consent of the other party or an order of the court...

So you will be an involuntary homeowner until the court agrees otherwise. And depending on how backed up the courts are, this court order may not come for 6 - 18 months (thank you, COVID).

If you were reading carefully, you'll have noticed that little caveat in the last sentence of the cited statute - "...without written consent of the other party." If both of you agree (in writing!) to sell the property ahead of the court order, then yes, technically you can. However, you both must agree throughout the entire home selling process. A home can take months to sell and relationships with exes, no matter how friendly they appear, can change at the drop of a hat. Selling a home is not simply making a single decision and moving on. There are many, many decisions that will take cooperation and communication from both parties in order to succeed. What happens if one of the spouses refuses to negotiate repairs with a Buyer? Or refuse to accept a bona fide offer once the home has been prepped, staged and listed for sale? Or even worse, what if consent to sell the home is revoked altogether? Issues do arise and the worst thing that could happen is to end up in a legal battle with a buyer of your home when either your spouse or you ends up withholding consent to sell.

Ex-Spouses (or soon to by exes) almost always fall into the same dynamic. One spouse is “out” of the house, and one spouse is typically remaining “in” the house. The “out” spouse is usually highly motivated to sell. It’s common to hear they are staying with a friend or family member while the divorce is moving forward. This is the spouse that will likely be the one to initiate the conversation regarding the sale of the home. The “in” spouse is usually not that motivated to sell. After all, they are comfortable where they are, and having to move is no ones favorite thing to do. It is typical for the “in” spouse to create roadblocks for the sale of the home. The home needs to be prepped for sale, photos need to be taken, and showings to prospective buyers have to happen. If the “in” spouse is fearful for where they will be going next, or possibly concerned about the financial burden of having to move, we can expect consent from them to be paused or withheld once the big picture starts to sink in.

This is one of the main pitfalls to selling before a court order. While I can be helpful with communicating with both parties in a way that can help move this process along, my experience has shown me that the best path forward is to wait until the end of the process, and the courts have ordered a clear directive to the divorcing parties. This is one example as to why an experienced agent will be more of a consultant than a salesperson.

Divorce is expensive. We all know that. Attempting to save some money on upfront legal fees is, understandably, a top priority for couples looking to split. Saving money by “going it alone” without proper professional assistance along the way is rife with the potential for unintended consequences.

The entire point of the court order is to create a fully binding and thought-out agreement to help navigate these issues. Without a court order, the pathway forward may be a mine field. Consulting with an attorney to determine what is appropriate for your situation is vital. Working with a lawyer specializing in mediation is a great first step.

If you need a referral for an attorney or a mediator, I work with many great professionals and can assist you by putting you in touch with one that works best for your situation.

*This blog is for informational purposes only. I am not an attorney and this is not legal advice.

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