Q: My wife and I own a property in Oregon. It is leased to tenant for 2 years. What are tenants rights if I divorce?
Property is in both wife and my name. I wrote the lease last year under 2 year binding agreement. The divorce is likely going to force sale of house. Can the tenant retain the property until the end of lease agreement? What would need to be done to ensure the tenant is able to fulfill the 2 year lease agreement and retain the property for the 2 years?
A:
One solution is to sell the property subject to the lease. The buyer will simply have to continue the lease until it ends. This will reduce the number of buyers interested in the house and could force you to take a lower sale price.
If you break the lease, the tenant could sue you, but sometime you can negotiate a deal for an early termination of the lease with the tenant. But it will involve paying the tenant money.
Understand that the divorce doesn't have to require the immediate sale of the house. You and your wife could agree to sell the house after the lease expires as part of the divorce settlement. If the property value rises, this could benefit both you and your wife, even if you are divorced at that point.
There may be other creative solutions, such as one of you take the house and buys out the other spouse. Or maybe your tenant will want to buy the house and you can offer the house to your tenant for a lower price since there wouldn't be any real estate commission for a direct sale.
You will also want to consider that you will pay capital gains tax on a house you sell for a profit if the house wasn't used as your primary residence for two out of the last 5 years. So if you want to save on taxes, you might want ton consider how this factors in to what ever solution you come up with.
You really should be working with a divorce attorney who can look at the overall situation and help you come up with the best solution. (FYI - the lease obligation is a marital obligation that both you and your wife share even if her name isn't on the lease.)
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.
