By the Power of Homestead

Understanding Who Signs What


 Cori Lamont  |    May 13, 2019
By the Power of Homestead

This article is intended to dust off the time-honored game of “who needs to sign and what needs to be signed?” 

Who is required to sign a listing or a buyer agency agreement differs legally from who is required to sign a conveyance document, such as an offer to purchase. And this article is going to narrowly focus on when a property is owned by a married couple. 

Scenario

A couple purchased a home during their marriage, and this home was the couple’s primary residence. The couple has filed for divorce. The husband has moved out of the couple’s home while the wife remains in the property. The wife has contacted you to list the property.

Can you list the property with just the wife’s signature? 

Yes. 

The listing contract must be signed by someone agreeing to pay the commission. See Wis. Stat. § 240.10(1). The law does not require all owners to sign a listing contract in order for the listing contract to be enforceable against the owner who does sign. Therefore, technically a wife signing a listing can be liable for a commission to a firm that successfully procures a buyer. 

Prior to accepting a listing signed by one spouse, legal counsel may be consulted regarding myriad potential problems, including disclosure duties owed to prospective purchasers, homestead law, marital property law, and agency disclosures to the seller client and the seller customer.

In addition, the agent should consult company policy about the potential for knowingly signing a listing contract without all the required signatures. Proceeding without the signature of all owners typically invites the potential challenge of the sellers failing to agree to sell the property. Keep in mind that homestead law requires both spouses to sign the offer regardless if one or both spouses are on title. However, it’s a good rule of thumb to have all the sellers sign the listing even if the property is not a homestead. 

For instance, if you are listing a property with multiple sellers such as a group of siblings who have inherited a family property, the best course of action is to have all sellers sign the listing to ensure everyone is generally on board to sell the property. While there is no guarantee that a seller will agree to the offer terms just because the seller signed a listing contract, the mere fact that you know the seller is warm to the idea of selling the property reduces one element of potential drama. And reducing the element of drama always has its advantages. 

Can you Sell the home with just the wife’s signature? 

No. 

Under Wisconsin law, one spouse is prohibited solely from conveying a homestead property. 

What is a homestead? “Homestead” refers to the home or residence of a married person. In rural areas, the homestead consists of the house and surrounding land necessary for use of the dwelling as a home, but not less than one-fourth acre and not more than 40 acres. The definition is intended to be broad and covers a property as long as one or both of the spouses live there.

In Wisconsin, Wis. Stat. § 706.02 provides that both spouses must sign all documents conveying an interest in any homestead property, including the Offer to Purchase and the deed or land contract. Generally speaking, a “homestead” is the home or dwelling of a married person. 

For the offer, acceptance must be in writing to satisfy the Wis. Stat. § 706.02 requirements for a written contract conveying an interest in real estate. Wis. Stat. § 706.02 requires that a real estate conveyance document, such as an offer to purchase, must identify the parties and be signed by or on behalf of all the parties to create a binding contract.

Therefore, both spouses’ signatures need to be obtained on all conveyance documents. Generally speaking, that means everything from the offer through the end with the deed and every document in between. Even if only one spouse is on title, the property is a homestead and requires both spouses’ signatures. 

If an absent spouse wishes to abandon his or her homestead rights, that spouse may join in the conveyance or execute a separate conveyance of his or her homestead rights. 

However, if one spouse refuses to sign the conveyance documents, the other spouse will need to speak with legal counsel as to his or her legal options. 

Note that homestead status applies to residential property where both spouses live together as well as to a residence where one spouse lives alone. For example, if one spouse works in Madison and lives in the couple’s condominium during the week and the other spouse lives the couple’s Milwaukee home, each property is arguably deemed the couple’s homestead.

Can one spouse sign for the other? 

No. 

Unless the spouse has proper authority to sign for the other, such as a power of attorney, both sellers must accept the offer in writing to satisfy the § 706.02 requirements for a real estate conveyance. Spouses do not have automatic authority to sign for each other.

How do you know if someone’s property is a homestead? 

An agent should ask questions at the time of the listing to explore if the seller is married. As harsh as it may sound, a couple is married until they are divorced. In addition, reaching out to the title company confirming whose names are on the title is another way to start the investigative process. Given the Wisconsin Marital Property Act, the seller may consult with legal counsel about the implications of the pending divorce.

If the property is not a homestead, the broker must determine how title to the property is held to know who needs to sign the offer and the deed. For example, if the property is titled in the names “Mr. Seller or Mrs. Seller, husband and wife, as survivorship marital property,” then either Mr. Seller or Mrs. Seller could exercise management and control and individually convey title. Again, if the property is a homestead, then both spouses must execute the offer to purchase and all other related documents including the deed.

Who needs to sign the offer if the spouses are purchasing a property? 

Married persons may acquire property in the name of only one spouse. A binding offer will be created provided the offer to purchase is in one name, and that buyer signs the offer to purchase. It is up to the buyers to decide, with the advice of their attorney, if desired, if they wish to hold title in the name of only one spouse.

Are there exemptions in Wisconsin law to the homestead signature requirement? 

Yes. 

If only one spouse is on title and the document to be signed is a purchase money mortgage — even if the property is homestead, only the spouse on title is required to sign. 

What is the Wisconsin Marital Property Act? 

The Wisconsin Marital Property Act, found in Wis. Stat. Chap. 766, is based on the premise that everything that a married couple residing in Wisconsin acquires during their marriage belongs to them equally. The act is important in determining:

  • Ownership, which affects, among other things, how the couple’s property passes at the death of one or both spouses and the rights of creditors.
  • Management and control, which determines who has the authority to sell, lease or mortgage the spouses’ real estate. 

These rights are based upon the wording used in the deed to the property. 

The act classifies a married couple’s property acquired after (1) the couple’s marriage, (2) the couple’s establishment of domicile within Wisconsin, or (3) January 1, 1986, whichever occurs last. This is called the “determination date.” Property acquired by the spouses before the determination date is called “predetermination date property” and is treated as a separate category for probate purposes. 

What does the Wisconsin Marital Property Act do? 

The act classifies property. Each spouse generally has an undivided one-half interest in each item of marital property without regard to the monetary value of a spouse’s actual contribution to the asset. 

A spouse cannot convey his or her one-half interest in a marital property asset as a separate interest. However, Wis. Stat. § 766.51 provides that a spouse with management and control over a marital property asset — for example, a cottage titled in the name of one spouse alone — may sell the property, but the other spouse will have an interest in the sale proceeds because the asset was marital property. At death, one half of all marital property assets, with some exceptions, becomes part of the deceased spouse’s estate and may be distributed pursuant to the will of the deceased spouse. 

How are the properties classified under the Wisconsin Marital Property Act? 

Individual property 

A spouse’s individual property generally is property the spouse owned before the determination date. Property acquired by a spouse during marriage may also be individual property, as provided in Wis. Stat. § 766.31, if the property was acquired:

  • By gift or inheritance from a third person or a trust to only one spouse.
  • In exchange for, or with the proceeds of, a spouse’s individual property.
  • From appreciation of the spouse’s individual property except to the extent that the appreciation results from the application of the other spouse’s labor or skill, which might cause the property to become mixed property, according to Wis. Stat. § 766.63.
  • By a court decree or a marital property agreement designating it as one spouse’s individual property.

Income from a spouse’s property may be classified as individual property if the spouse executes a unilateral written statement stating such classification — otherwise it generally would be marital property. 

Survivorship marital property 

Upon the death of a spouse, survivorship marital property goes to the surviving spouse without probate and is not subject to the provisions of the deceased spouse’s will, as is the case with property owned in joint tenancy. Survivorship marital property is created when a deed or another document conveying title names both spouses and states that the property is “survivorship marital property.” 

If a husband and wife acquire a homestead after the determination date, it is automatically classified as survivorship marital property by Wis. Stat. § 766.605 unless a different classification is expressed in the deed or in a marital property agreement. 

Marital property agreements 

The Marital Property Act permits married couples or couples about to marry to enter into a variety of marital property agreements classifying all presently owned assets or future assets as individual property, marital property or some combination of classifications. Some marital property agreements are used to change the spouses’ management and control rights with respect to some or all of the couple’s real property assets. 

Marital property agreements may be recorded with the register of deeds and therefore become part of the chain of title. However, marital property agreements may not be recorded, and listing agents may learn about them at various times in the transaction. 

If you are listing what you believe to be a homestead and the seller then informs you that the spouse’s marital property agreement provides the homestead is the individual property of only one spouse, then only that one spouse needs to sign. 

However, agents should be made aware that some title companies may not acknowledge such marital property agreements and still may require both spouses sign the conveyance documents. Title companies insure the closing and thus exercise caution when confronted with a martial property agreement that forfeits the homestead rights of one of the spouses. Therefore, the seller may have to work with his or her legal counsel and the title company to determine who needs to sign to convey the property. 

Don’t be an ostrich — ignoring it won’t help

If you know, as a listing agent, the sellers are married and you are selling their residence, you need to figure out who signs and what as soon as possible. If you decide to do nothing and the buyer learns a few days before closing from the title company that the other spouse was supposed to be signing all along, you have a problem. Taking this example a step further, let’s say that the other spouse won’t sign or is unavailable to sign before the closing date. Closing now passes, and the seller could not close. The buyer will likely argue the seller did not provide clear title and failed to close. You now have a bigger problem because all along you knew another signature was needed, and you ignored the issue. In this situation, the listing agent could be sued and have complaints filed against them at the local REALTOR® association if they are a REALTOR® and at the Department of Safety and Professional Services claiming a lack of competency.

Understanding who needs to sign and what can be complicated. If you are unsure who signs the offer, reach out to the title company and potentially legal counsel. The one thing that cannot occur is ignoring the issue as a listing agent. 

Cori Lamont is Director of Corporate and Regulatory Affairs for the WRA. 

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