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Can You Buy A House In The Middle Of A Divorce?

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Is there a prohibition on buying a house before the divorce is completed? We know there is a statutory prohibition on selling, disposing, or giving away any marital property in the middle of the divorce without the consent of the other party or by further order of the court, absent it being done in the usual course of business, or when necessary to pay for attorney’s fees. Does that same prohibition apply to buying something, particularly a new home in the middle of the divorce?

The answer is no, there is no statutory prohibition for purchasing a new home in the middle of the divorce, however, it is difficult to do so for legal reasons that will be pointed out here;

1. The title company will most likely be insistent that your spouse sign a 766 marital property waiver and will not allow you to proceed to closing without that signed sworn to affidavit. Before considering purchasing a new home in the middle of the divorce, you will need to sit down and talk to your spouse to insure that they will cooperate with signing the 766 waiver. If not, it is probably not advisable to proceed with the purchase.

2. Since you are not divorced yet, similarly to the title company requiring the 766 waiver to close in Wisconsin, any property you acquire before the divorce is final gives your spouse a marital interest in the new home. If you have a substantial down payment, that equity payment is subject to martial property division. My suggestion is you have your spouse sign a separate stipulation and order that you both would sign and submit to the court as a binding partial property division agreement for approval of the court, that your spouse is waiving any legal or equitable interest in the new home so you are protected. You could even consider attaching the 766 waiver needed by the title company as part of the stipulation.

Under Wisconsin law, while you are not prohibited from acquiring new property or a home in the middle of the divorce, without the 766 waiver, the title company will most likely not allow you to close and secondly, without the stipulation and order approved by the trial court, you are exposing yourself to having to give your spouse half the equity in the new home you are purchasing. You should certainly seek the advice of your divorce lawyer and an experienced real estate lawyer whenever making a purchase of this magnitude, before the divorce is final.

I have also seen some title companies reject closings in the middle of the divorce, even where these other two components are complied with, since they may be insistent on a judgment of divorce and being provided with a copy of the divorce decree; that is impossible to comply with in the middle of the divorce. All the more reason to make sure you discuss this in advance of any purchase of real estate with both your divorce lawyer and a real estate lawyer.

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