[00:00:00] David Bulitt: Welcome to JGL Law for You. JGL Law for You is a podcast by lawyers, but not for lawyers. Only on JGL Law for You do we discuss a wide array of topics to help you navigate the many legal processes, developments in the law, other current events, and how they may affect you, your family, or your business.
[00:00:20] Today we’re talking real estate and divorce. Uh, complicated topics that sometimes co-mingle, and to help us discuss what to do, how to do it, what not to do, is a principal at Joseph Greenwald and Laake, Christopher Castellano, who for over a decade has represented clients in Maryland domestic cases, including custody, divorce, and modification actions.
Chris, welcome aboard, thanks for coming back, and this is a great discussion to have. Particularly this time of year, because, you know, we’re starting to approach the spring when houses go on the market, when some people are looking to buy houses or move to other homes for school [00:01:00] reasons or otherwise. And as you and I know, January and February are busy, busy times for people who are in unhappy relationships. So those two worlds tend to collide, right?
Christopher Castellano: Yeah, absolutely. This time of the year is one of the hottest because you’ve got a lot of those questions swirling of, you know, what should I do for this upcoming year?
David Bulitt: Let’s start and work from the top down a little bit. What are the overall concerns, the factors, the things that you want to keep in mind? Either those that are real, dollars and cents wise, or the more intangible emotional type factors?
Christopher Castellano: Right. We’re talking just about the house. When you’re dealing with a house in the context of dissolving your marriage, there’s quite a few things to take into account. You know, first you have to understand, which is why it’s always good to talk to an experienced lawyer, but you have to understand the legal parameters within which you’re working, right?
And so, a house, just like your car, just like your retirement, is an asset, and the court’s going to treat it as such. And as a result, you know, we have to look at a few key questions:
- who owns the house
- who’s on the title
- whether either party has contributed to the house
If we have a house that’s at least partly or entirely premarital, we also need to consider whether either person has contributed to the mortgage, maintenance, or upkeep. There’s a lot of different factors that go into the question of ownership of the house and how the court may treat the ownership of the house. That’s one of the first core questions that we look at.
David Bulitt: Let’s talk about that. Let’s come back to the emotional part, which is often the more difficult thing to deal with. Let’s talk about the legal aspect, at least in terms of how Maryland looks at a marital home.
Christopher Castellano: Sure. If you’ve got a home that you purchased during your marriage with your spouse, it’s going to be titled tenants by the entirety, and essentially it’s owned by both of you equally. The court’s going to treat it as such. We’re going to divide it 50/50, and we’re going to sell the house.
[00:03:00] David Bulitt: When you say 50/50 the house, what does that mean? That means that if the house gets sold that the two people would split the proceeds equally?
Christopher Castellano: Yeah, that’s right. And we’re going to look at proceeds as essentially the net proceeds of the house. So, we’re going to deal with the mortgage, we’re going to pay that off, we’re going to deal with closing costs, we’re going to deal with attorney’s fees related to the sale of the house, and any taxes that may be necessary. And the net proceeds will get divided 50/50. Now, that could be by way of an agreement, or that could be by way of a court order.
David Bulitt: Okay, and let’s go back to the titling piece, because folks sometimes do things differently. I mean, most of us think we buy a house together, we’re both getting on the deed, we’re both getting on the mortgage, but that isn’t necessarily the case in certain circumstances, right?
Christopher Castellano: Yeah, some people may find it beneficial to have it titled one way or the other. For instance, one spouse, they’re on the title just completely by themselves. And for all intents and purposes, that may be a sensible decision at the time, right? But of course, that becomes a complicated discussion if now we’re on the other end of the equation and we’re dissolving the marriage.
David Bulitt: Okay. And one of the reasons that folks may, who are married, may buy a piece of property or getting ready to get married, whatever it might be, and have it titled jointly or titled separately, or the mortgage be where there’s only one party on there, may have something to do with, what, with maybe the credit score of one of the two potential buyers or something like that?
Christopher Castellano: Well, sure. I mean, it may be credit score, in this area we’ve got a lot of military, could be various different benefits for different types of loans. There’s a lot of factors that go into how the house is titled and how the deed of trust or your mortgage are structured. But ultimately what the court’s going to look at is that marital interest. And that’s what I want to focus on next, which is, okay, we’ve identified the title, we’ve identified who is essentially living in the home, but how do we look at the value of the house, and what portion of that is marital?
David Bulitt: Let me just ask you a clarifying question for a second. Doesn’t that mean that it’s marital property as a matter of law?
Christopher Castellano: If it is titled jointly, it is considered under the statute marital property, yes.
David Bulitt: So how do you deal with situations where one person contributed more?
Christopher Castellano: The premarital or non-marital contribution to the purchase of a house is always somewhat of a sticky question. I’ve interacted with judges who have come out in different ways. But generally speaking, that type of contribution is often viewed as a gift to the marriage unless there is an agreement stating otherwise.
[00:06:00]
Christopher Castellano: Yeah, so what we’re doing next is figuring out how to value that interest, right? We touched on it a little bit before. You’re going to look at the market value of the house, and you’re going to subtract out the mortgage, any lines of credit, anything that’s attached to the house, right? And that gives you your base level equity in the property.
But then you have to take it a step further. You’ve got to ask: are there any agreements in place? Is there a prenup? Is there some understanding between the parties — even informal — that would affect how that equity is divided?
David Bulitt: So, people can come to an agreement on value themselves, or they can get an appraisal.
Christopher Castellano: That’s right. Ideally, people come to an agreement. You can use Zillow, Redfin, Realtor — all these tools — to get a rough estimate. But if there’s disagreement, then you bring in a professional appraiser. And sometimes you even have dueling appraisals, right? One side hires one, the other side hires another, and then you’re arguing over which one is more credible.
David Bulitt: Which of course adds cost.
Christopher Castellano: Exactly. And that’s why, again, going back to practicality, if you can agree on a number that’s within reason, you’re saving yourself time, money, and stress.
[00:08:00]
David Bulitt: So now we’re in a situation where there’s no agreement. Trial is coming. What’s the court going to do?
Christopher Castellano: The court is going to order the house sold. That’s the baseline. And like we talked about earlier, you’re not controlling that process anymore. A trustee is going to be appointed. That trustee is going to make decisions about the house — when it’s listed, what repairs are done, how it’s marketed.
And importantly, you’re going to be paying for that. You’re paying trustee fees, you’re paying real estate commissions, and all of that is coming out of the equity.
David Bulitt: So instead of splitting, say, $200,000, you might be splitting $150,000.
Christopher Castellano: Exactly. And that’s why, from a strategic standpoint, we use that as leverage. It’s not a threat — it’s just reality. If you don’t come to an agreement, this is what’s going to happen.
David Bulitt: And most people don’t want to give up that money.
Christopher Castellano: Correct.
[00:10:00]
David Bulitt: Let’s shift to when there are kids involved.
Christopher Castellano: This is where things get a lot more complicated, because now you’re not just dealing with money — you’re dealing with stability for the children.
Maryland allows for what’s called use and possession. That means the court can allow one parent, usually the primary custodian, to remain in the home for up to three years.
David Bulitt: And during that time, the house isn’t sold.
Christopher Castellano: Correct. The house stays in place. The kids stay there, and one parent stays with them. It’s meant to provide continuity — keep the kids in the same school, the same neighborhood, the same environment.
David Bulitt: And after that period?
Christopher Castellano: Then the house is typically sold unless the parties have agreed otherwise.
[00:12:00]
David Bulitt: What about situations where parents are more cooperative?
Christopher Castellano: If people are cooperative, there’s a lot more flexibility. They can come up with arrangements that extend beyond what the court would typically order. For instance, they may agree to keep the house longer than three years, or come up with creative arrangements like nesting — where the kids stay in the home and the parents rotate in and out.
David Bulitt: And that requires a high level of cooperation.
Christopher Castellano: Very high. That’s not something you see in contentious cases, but it can work in the right situation.
[00:14:00]
David Bulitt: Let’s talk about contributions again. If one spouse has been paying everything — mortgage, utilities, maintenance — for a period of time, how does that factor in?
Christopher Castellano: That’s often a point of negotiation. One side may say, “I’ve been carrying the house for two or three years, I should get a greater share of the equity.” And the other side may push back and say, “Well, you lived there, you benefited from it.”
And so, you get into a negotiation about what’s fair. Maybe it’s not 50/50 anymore. Maybe it’s 55/45, maybe it’s something else. It depends on the facts of the case.
David Bulitt: And if you can’t agree?
Christopher Castellano: Then you make the argument to the court, and the court decides. But there’s no guarantee how the court is going to rule on that.
[00:16:00]
David Bulitt: Let’s talk about agreements — prenups, postnups.
Christopher Castellano: Yeah, absolutely. You can absolutely have an agreement that says, “If we divorce, this is what happens with the house.” And that can cover everything from who gets the house to how proceeds are divided.
David Bulitt: And those are enforceable?
Christopher Castellano: Generally, yes, as long as they’re properly executed. That means:
- both parties had the opportunity to review
- there wasn’t coercion
- it’s not unconscionable
David Bulitt: And it removes a lot of the uncertainty.
Christopher Castellano: Exactly. It takes what could be a very contentious issue and turns it into something straightforward.
[00:18:00]
David Bulitt: Let’s talk about timing. What’s the benefit of selling the house before the divorce is finalized?
Christopher Castellano: The biggest benefit is liquidity. The house is often the largest asset, and when you sell it, you create a pool of funds that can be used to resolve the rest of the case.
Instead of arguing about, “Who gets what?” in a vacuum, you have actual dollars that can be allocated.
David Bulitt: It gives you flexibility.
Christopher Castellano: Exactly. It allows for what we call “horse trading.” You can offset assets — maybe one person takes more of a retirement account, the other takes more cash. Without liquidity, that becomes much harder.
[00:20:00]
David Bulitt: And what if the house is underwater?
Christopher Castellano: That’s a different situation entirely. If you owe more than the house is worth, then you’re dealing with potential short sales, potential losses, and that has to be factored into the overall division of assets.
But again, that’s why it’s so important to understand the numbers early.
[00:22:00]
David Bulitt: Let’s wrap with this. What should someone do before they list their home?
Christopher Castellano: First, talk to an experienced family law attorney. That’s the starting point.
From there:
- take inventory of all assets
- understand your financial picture
- determine the value of the home
- decide on a strategy — sell, buyout, or hold
And timing is key. The market matters. If you time it correctly, you can maximize value. If you don’t, you could lose a significant amount of equity.
[00:24:00]
David Bulitt: Chris, this has been a really helpful discussion. It’s a complicated topic, and I think you’ve made it much more accessible.
If people want to get in touch with you, what’s the best way?
Christopher Castellano: Yeah, they can call me directly at 240-399-7900, or they can visit JGLLaw.com. My contact information is there, and I’d be happy to speak with anyone about their situation.
David Bulitt: Thanks so much for joining us. Folks, thanks for listening. If you found this helpful, please subscribe. I’m David Bulitt, and this is JGL Law for You.