What Happens In An Illinois Divorce To A House You Bought When You Were Engaged?

There used to be a very specific order in which people did things: they got engaged, they got married, they bought a house and then they had a baby. At least that’s what they told us.

Now, people often get engaged, buy a house and then get married (and there might be a baby before or during all of that).

What happens to a house that is bought before marriage and/or during an engagement if the couple eventually get divorced in Illinois?

Houses bought before marriage are divided depending on who is on the deed.

If Both Parties Are On The Deed Before Marriage In Illinois

If both parties are on the deed to the house, an Illinois divorce court can divide the property.

A deed is “A written instrument by which land is conveyed.” Black’s Law Dictionary (11th ed. 2019)

The deed controls who owns the land. If both parties own the land before the divorce, an Illinois divorce court can deem the land/building non-marital property but still divide the land.

“[T]he court shall assign each spouse’s non-marital property to that spouse.” 750 ILCS 5/503(d)

Non-marital property is “property acquired before the marriage” 750 ILCS 5/503(a)(6)

“[I]t is the parties’ obligation to present the court with sufficient evidence of…the property [and its value]” In re Marriage of Smith, 114 Ill. App. 3d 47, 54 (Ill. App. Ct. 1983)

A divorce court (in theory) should deem the property to be non-marital. Therefore, the property should only divisible via a partition action (but this never happens which I will explain later).

“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. 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

This requires the sale of the property (if indivisible…and all houses are indivisible) to be done at a sheriff’s sale. Stadnyk v. Nedoshytko, 2017 IL App (1st) 152103-U

No one is going to give you a good price for your house at a sheriff’s sale (which is an auction for distressed properties, usually)

So, in lieu of going through a division of assets resulting in a sheriff’s sale, the divorce court can consider the partition action because it includes the same parties as the underlying divorce.

Illinois law encourages “the elimination of repetitious suits and the relief of courts and litigants alike from the unnecessary burden of trying the same issues pending in another action.” Skolnick, 32 Ill.2d at 59, 203 N.E.2d 428.

Divorce courts have the authority to bypass the partition act and divide the property based on the Illinois Marriage And Dissolution of Marriage Act (which provides a lot more direction).

“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)

The Illinois Marriage and Dissolution of Marriage Act allows property to be divided “in just proportions.” This means the court can consider the contributions of each spouse in acquiring the asset and the needs of each spouse after the divorce.

Even if contribution and needs arguments do not favor you in the division of a pre-marital house in a divorce, you would still prefer to use the Illinois Marriage and Dissolution of Marriage Act in lieu of a partition action in order to avoid a bargain basement sheriff’s sale price.

If One Party Is Not On The Deed Of A House Bought Before Marriage In Illinois

If one party is not on the deed to a house purchased before marriage…they are probably NOT going to be awarded any portion of that property.

Previously in Illinois, “property purchased prior to marriage but in contemplation of marriage should be classified as marital property.” In re Marriage of Jacks, 558 NE 2d 106 – Ill: Appellate Court, 2nd Dist. 1990

This is NO LONGER THE LAW. The Illinois Marriage and Dissolution of Marriage Act has since been updated.

“Property acquired prior to a marriage that would otherwise be non-marital property shall not be deemed to be marital property solely because the property was acquired in contemplation of marriage.” 750 ILCS 5/503(a)

Furthermore, the written contract is what governs all land transfers. If your name is not written somewhere associated with the land…you do not own that land in Illinois.

“No action shall be brought to charge any person upon any contract for the sale of lands, … interest in or concerning them…unless such contract or some memorandum or note thereof shall be in writing, and signed by the party to be charged therewith, or some other person thereunto by him lawfully authorized in writing, signed by such party.” 740 ILCS 80/2

Illinois divorce courts can consider contributions made by the spouse who is not on the title.

“When a spouse contributes personal effort to non-marital property, it shall be deemed a contribution from the marital estate, which shall receive reimbursement for the efforts if the efforts are significant and result in substantial appreciation to the non-marital property” 750 ILCS 5/503(c)(2)(B)

Those contributions must be proven with specific facts. “No such reimbursement shall be made with respect to a contribution that is not traceable by clear and convincing evidence or that was a gift.” 750 ILCS 5/503(c)(2)(A)

Mortgage payments do not count as marital contributions to a non-marital estate. “[A] marital estate is not entitled to reimbursement for mortgage payments toward nonmarital property when the marital estate has already been compensated for its contributions by use of the property during marriage.” In re Marriage of Crook, 813 NE 2d 198 – Ill: Supreme Court 2004

A mortgage payment to a house you do not own is indistinguishable from paying rent. Any reduction in liability and increase in equity due to the mortgage payment is merely reimbursement for the mortgage payment.

“[T]he parties benefited from living in the house for a substantial period of time, [so] the court could reasonably have found that the marital estate had already been compensated for its contributions.” In re Marriage of Snow, 660 NE 2d 1347 – Ill: Appellate Court, 4th Dist. 1996

If the mortgage against the house gets subsequently refinanced in both parties’ names without putting the deed in both parties’ names, that debt becomes a marital debt.

“”[M]arital property” means all property, including debts and other obligations, acquired by either spouse subsequent to the marriage” 750 ILCS 503(a) (emphasis mine)

That marital debt can then be allocated between the parties. Because the property is fixed to the debt…the property can be divided between the parties, too.

Buying a house is a good thing. Getting engaged is a good thing. Let’s hope it all works out. If not, contact my Chicago, Illinois family law firm to speak with an experienced Illinois divorce attorney.

source https://rdklegal.com/what-happens-in-an-illinois-divorce-to-a-house-you-bought-when-you-were-engaged/