Both the United States and Minnesota Supreme Courts have, in recent decisions, surprised the legal community by requiring a special incantation of magic words when more general verbiage (or silence) should have sufficed. SCOTUS deemed silence itself insufficient to invoke the 5th amendment right and instead required an incantation of the right to remain silent. In Marine Credit Union v. Detlefson-Delano, the Minnesota Supremes took a similar tack, holding that a quit claim deed’s broad waiver and release language is insufficient for a spouse to waive their interest in homestead property. Instead, lawyers now need to incant magic waiver language.
The facts of Marine Credit are discussed in my earlier post on this case, below. In summary, husband quit claimed homestead property to wife. Wife then signed a mortgage encumbering the property. Wife defaulted on the loan, and lender sought to foreclose. Wife defended against foreclosure, arguing that the mortgage was void because her husband never signed it.
The husband’s quit claim deed stated that husband “does hereby remise, release and quitclaim . . . all the right, title, interest and claim” in the property. To my mind, a release of “all right, title and interest” in real estate means just that, and leaves nothing behind. But, the Minnesota Supremes have concluded that this language is not enough to waive a spouse’s interest in homestead property. Instead, a spouse must expressly state an intent to waive homestead rights.
It seems to me that requiring such specific language puts the interest of specificity far ahead of common understanding and practical usage. I would have thought that my refusal to speak to a cop would signal my desire to remain silent. Likewise, I would have thought that a release of “all the right, title, interest and claim” in the property would have included a a release of a spouse’s homestead interest.
When court’s require the incantation of magic language, they not only divorce the law from common understanding and usage, but make all of our jobs more difficult. Real estate lawyers are now tasked with remembering that, if a spousal interest in homestead property is at issue, extra magic language will be necessary in order to effectuate a release.
Original Post (July 23, 2012): Grade schoolers know the often harsh rule that once you give something away you can’t take it back. The Minnesota Court of Appeals recently held that the same applies for a spousal interest in real estate.
In Marine Credit Union v. Delefson-Delano, a husband signed a quit claim deed conveying his interest in property to his wife. The husband signed the deed so that his wife could sell the couple’s property while he was out of town. The property, however, was never sold. Six months later, the wife received a loan, secured by a mortgage against the property. Only the wife signed the mortgage. The wife later defaulted on the loan. The wife defended against the lender’s foreclosure by arguing that the mortgage was invalid because her husband hadn’t signed. (Incidentally, husband didn’t have much to say since, by the time of the lawsuit, the couple were divorced and, the Court tells us, wife hadn’t heard from husband in several years.)
The Minnesota Court of Appeals held that a husband’s signature was not required to make the mortgage valid because the husband had given up his interest in the property by deeding it to the wife. According to the Court, “[H]usband’s quitclaim deed to wife was a valid, unlimited transfer of all of his interest in the homestead to wife, and, as a result, husband’s signature was not required on the subsequent mortgage.”
To many members of Minnesota’s family law bar, this decision seemed like an affront to the commonly held understanding that a spouse holds an “inchoate” interest in jointly held property, which cannot be severed without the spouses signed consent to the precise transfer at issue. In Marine Credit, the Minnesota Court of Appeals construed the law applicable to spousal interests in property and applied an exception that allowed spouses to convey property between each other.
So, what we teach our children still applies to us adults: Once you give something away, no taksies backsies.