Sell Home During Divorce AZ

The Arizona Court of Appeals issued a decision in Saxon v. Riddel that impacts anyone going through an Arizona divorce. The trial court ordered the sale of community property during a divorce. The case went before the Court as a Special Action because the trial judge issued an order requiring the sale of a jointly owned mobile home park over Wife’s objection and before the entry of a Decree of Dissolution of Marriage.

The Court of Appeals began its analysis of the common law providing that a co-owner of property cannot compel the sale of such assets absent filing a civil partition action, which is a separate civil lawsuit. The fact the parties were married did not change the application of those common law principles. The court also noted neither spouse had filed a separate partition action.

The Court of Appeals ruled that A.R.S. 25-318 only permits a divorce court to order the division of the parties’ community, common, or joint property upon the entry of a final judgment of divorce, which had not yet occurred in this case. The trial court, therefore, lacked the statutory authority to order the property to be sold until the parties presented their evidence at trial and the trial court subsequently issued a final judgment of divorce.

The Arizona Court of Appeals did state the trial court would have been permitted to order the sale of property owned as joint tenancy, tenancy in common, or as a tenancy in the entirety, a separate partition action had been filed, and the partition case and divorce case were consolidated. Again, neither party failed to do so.

Sell Home During Divorce AZ | Imminent Foreclosure Exception

The Court of Appeals, however, indicated a trial court does have the statutory authority (A.R.S. 25-315) to allow it to order the sale of co-owned property before entering a final decree of dissolution of marriage. If such sale is proven to be necessary to preserve and protect the interest in that community property, such as when it is shown a foreclosure of the property is imminent, and the parties are not able to save the property from that foreclosure.

The Appellate Court concluded the trial court lacked jurisdiction to order the sale of the property over the objection of the other party during the pendency of the divorce. The ruling did, however, state the trial court may consider at trial whether the Wife’s refusal to agree to the sale was arbitrary and resulted in a detriment to the parties’ financial situation to assess that financial loss against Wife’s remaining share of the parties’ joint, common, and community property.

The takeaway from this case is that a trial court may not order the sale of a community, jointly, or commonly owned property absent an agreement between the parties. The only exception so this rule if one of the parties has filed a separate partition action and consolidated that separate action with the divorce case or evidence is presented establishing the home is in imminent danger of loss and the parties lack the financial ability to protect and preserve the equity in that property.