Can the Court Compel the Sale of the Marital Residence while a Divorce is Still Pending?

Posted in Divorce

The equity in a marital residence (defined as the appraised value of the residence minus the existing mortgages and liabilities) is often the largest asset to distribute in a divorce.

Perhaps you need to access the equity in the residence to meet living expenses or to pay the cost of litigation, and you want to list the residence for sale right away. On the other hand, maybe you don’t agree that the house should be sold right away because of practical concerns. The way in which the residence is distributed, and when, is therefore a common source of contention.

The New Jersey Courts were previously barred from compelling the sale of a marital asset prior to the entry of a Final Judgment of Divorce, as in Grange v. Grange, 160 N.J. Super 153 (App. Div.1978).

However, pursuant to the New Jersey Supreme Court’s holding in Randazzo v. Randazzo, 184 N.J. 101 (2005), a Court may compel that the marital residence be listed for sale as long as it would serve best interests of the parties under the circumstances of each individual case.

In Randazzo a Husband and Wife owned multiple properties, but faced significant cash flow problems after losing a towing contract with the city of Clifton New Jersey. Id. at 104.

After the Wife filed a Complaint for Divorce, the Husband consented to the sale of a jointly held property in Florida. Thereafter, the Husband opposed the sale of the property and refused to sign the listing agreement. The Trial Court entered an Order stating that the Wife’s request to sell the Florida property was moot because the Husband already agreed to the sale. Id.

The Husband further resisted the sale of the property.

Ultimately, the New Jersey Supreme Court agreed to hear the Husband’s petition partially upon the issue of whether the trial court erred in ordering the sale of the property before the entry of the Final Judgment of Divorce.

In specifically overruling Grange v. Grange, supra, the Supreme Court held as follows:
The Family Part is a court of equity. We read the statutory requirement that directs equitable distribution at the time of the divorce judgment to be limited by the portion of N.J.S.A. 2A:34-23 that authorizes the court in its discretion to “ make such order as to the alimony or maintenance of the parties, and also as to the care, custody, education and maintenance of the children.” We conclude that, consistent with N.J.S.A. 2A:34-23 and Rule 5:3-5, the trial court may exercise its discretion to order the sale of marital assets and the utilization of the proceeds in a manner as “the case shall render fit, reasonable and just.” Id.at 113. (Emphasis added)

With those parameters in mind, it is always best to agree with your spouse about when and how a jointly held asset will be distributed to spare litigation costs and acrimony. However, if you believe that it is “fit, reasonable, and just” to sell the residence before the entry of the Final Judgment of Divorce over the objection of your spouse, you or your attorney may apply to the Court to compel the sale. The Court’s ultimate decision will be heavily influenced by the individual facts of your case.

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