What to do with the marital home can be a major point of contention for divorcing spouses. Some spouses decide to sell the marital home and split the proceeds. Others decide that one spouse will keep the home after the divorce and buy the other out of their interest in the property, almost always refinancing the property in the short term to remove the other from the related loan. Both are more clear-cut approaches to the division of the marital home.
In rare instances, divorcing parties agree that they’ll continue as co-owners of the marital home long after the divorce while one party remains living in the property. As you may imagine, this scenario raises the likelihood of future conflict and litigation and, for this reason, should generally be avoided. A recent Massachusetts Appeals Court case, Oscar Bonilla v. Rosa Lidia Yanes Najera, illustrates the point.
Case Facts
In 1988, Rosa and Oscar married. They then bought a house together in Boston (hereinafter, “the former marital home”). In 2007, Oscar moved out of the house while Rosa continued to live there. The parties later decided to divorce.
In 2014, Oscar and Rosa entered into a separation agreement, which became part of their judgment for divorce.
Separation Agreement: Division of the Marital Home
In their separation agreement, Oscar and Rosa included provisions about the marital home (interestingly, both parties wanted to keep the house). Two provisions in their separation agreement are especially relevant to this case. Those provisions state the following:
- Article V: “‘The Parties acknowledge that there is one personal property located at 40 Manning Street, Roslindale, MA 02131. Both will be responsible for the expenses and maintenance of this property at a rate of 50/50. The house can only be sold or transferred by agreement of both parties’” (emphasis added).
- Article VIII, paragraph B: “‘This Agreement shall be binding upon the estate of both parties and such estates shall be liable for any obligations set forth herein'” (emphasis added).
What do those provisions mean? There was no division of the marital home. Essentially, Oscar and Rosa agreed that neither one could sell the marital home without the consent of the other, even after their divorce. Not only that–they also agreed that their estates (whoever inherits their share of the former marital home) would also need permission from the other side to sell the house. In legal terms, these provisions amount to what is known as a “restraint on alienation.” In everyday terms, “it’s complicated.”
Trial Court
In 2019, Oscar filed a “Petition to Partition” the former marital home in the Probate and Family Court. Oscar basically asked the court to force the sale of the former marital home without Rosa’s consent. He argued that the restraint on alienation in the separation agreement was unenforceable. In turn, Rosa filed her response and a motion to dismiss Oscar’s petition.
The Probate and Family Court judge allowed Rosa’s motion and dismissed Oscar’s petition. In her written findings, the judge noted that while the separation agreement is poorly drafted, it is also “‘unambiguous and binding'” and prevents Oscar from selling the former marital home without Rosa’s okay. The judge, however, did not address Oscar’s argument that the restraint on alienation in the separation agreement is unenforceable.
Oscar appealed the Probate and Family Court judge’s decision to dismiss his petition to partition. He wanted the Appeals Court to allow him to proceed with his case to force the sale of the former marital home.
Revisiting the Legalese
Before moving on to the Appeals Court’s decision, let’s revisit some important legal lingo. Below, we will again mention the following two terms: 1) “Petition to partition;” and, 2) “restraint on alienation.” Here are brief, simply stated definitions for those terms.
- Petition to Partition. A petition to partition starts a legal proceeding, known as a partition action. A partition action may be necessary when more than one person owns the same piece of real estate (i.e., they’re co-owners) and one or more co-owner(s), but not all, want the property physically divided or sold. Generally speaking, certain types of property co-owners can file a petition to partition with the court. In the petition, a property co-owner is typically asking a judge to either physically divide the real estate that the person co-owns or, more commonly, to force the sale of the real estate and divide up the profits among the co-owners.
- Restraint on Alienation. In very basic terms, a restraint on alienation is a restriction on the future sale of real estate.
Now, let’s turn to the Appeals Court’s opinion on Oscar and Rosa’s separation agreement and its provisions regarding the division of the marital home.
Appeals Court
Remember, the Probate and Family Court judge dismissed Oscar’s petition because the parties signed a valid agreement (the separation agreement) stating they needed the other’s permission to sell the former marital home. The judge, however, did not get into whether that restraint on alienation (i.e., restriction) was enforceable.
In its assessment, the Appeals Court first took a step back and made clear that, generally, any property owner with an undivided real estate interest (i.e., real property co-owner) can petition for partition. There are some exceptions, however. One such exception is a property co-owner who has:
- entered into a valid agreement
- containing a reasonable restraint on alienation.
In that scenario, that property co-owner cannot ask a court to partition the property.
So, here, we have Oscar, who entered into a valid agreement (the separation agreement) containing a restriction on his ability to sell his part of the former marital home (the restraint on alienation). The Appeals Court said that part is clear. However, that left the Appeals Court to consider: Is the aforementioned restraint on alienation reasonable?
Was the restraint on alienation in the separation agreement reasonable?
In determining whether the restraint on alienation was reasonable, the Appeals Court looked to the “Franklin factors” (factors enumerated in the case, Franklin v. Spadafora). If a restraint on alienation meets all the Franklin factors, then, generally, the court would tend to consider the restraint to be reasonable. The Franklin factors are as follows:
- “The one imposing the restraint has some interest in land which he [or she] is seeking to protect by the enforcement of the restraint;”
- “The restraint is limited in duration;”
- “The enforcement of the restraint accomplishes a worthwhile purpose;”
- “The type of conveyances prohibited are ones not likely to be employed to any substantial degree by the one restrained;” and,
- “The number of persons to whom alienation is prohibited is small.”
Appeals Court: The Restraint on Alienation Is Not Reasonable
In analyzing the restraint on alienation in Oscar and Rosa’s separation agreement under the Franklin factors, the Appeals Court concluded it is not reasonable. Here is why (referencing the list above):
- Yes, Rosa does have an interest in the property–she’s the co-owner. However, this is the only factor that supports the notion that the restraint is reasonable.
- No, the restraint is not limited in duration. Not only must Oscar and Rosa abide by the restriction during their lifetimes, but their estates must also. So, the restriction goes on in perpetuity–this is not legally allowed.
- No, Rosa did not offer a worthwhile purpose for the restriction. In fact, the Appeals Court said, “[Rosa] does not explain how keeping divorced parties and their estates economically bound to one another indefinitely accomplishes a worthwhile purpose, and there is nothing in the agreement or elsewhere in the record to suggest that the restraint serves any other purpose.”
- No, unlike in the Franklin case, the restraint here is not narrowly tailored–it applies to any sale or transfer of the property. And, Oscar, the person who is being prohibited from selling, wants to do what the agreement prohibits him from doing: Sell or transfer his interest in the former marital home.
- No, the number of people impacted by the restraint is not small. Because the restriction prohibits the sale or transfer of the property without the consent of both Oscar and Rosa, it impacts an unlimited number of people.
Appeals Court Allows Oscar to Pursue His Petition to Partition
Ultimately, the Appeals Court found that the restraint on alienation in Oscar and Rosa’s separation agreement failed to meet all but one of the Franklin factors, and so, it’s unreasonable and thus unenforceable. Accordingly, the Appeals Court held that Oscar could, in fact, pursue his petition for partition.
What will happen with the division of the marital home in this case? The Appeals Court sent this case back to the Probate and Family Court to determine just that.
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