When San Francisco decided to issue marriage licenses to same-gender couples, I became curious about the legal implications for the real estate and mortgage industries.
After conferring with folks at the legal departments of title companies, I think this is a capsule of their position: Since these licenses are, on the surface, invalid under state law, they will not vest the property as community property. They will go along with the instructions from the buyers as to the language of the vesting, except they will not vest as community property. The title policies will recite the language of the vesting verbatim. This practice, I think, distances the title industry from taking any position as to the validity of the vesting.
Title insurance companies aren’t trying to take a social position on this matter. They are stating that they are bound ultimately by state law and that state law declares these licenses to not be valid.
If subsequent rulings from courts invalidate the state law preventing same-gender marriage, the title companies will follow those rulings.
The insurance that title policies offer lenders is not compromised by any vagaries associated with the marital status of such vesting. Everyone on title is responsible for the entire mortgage whether vested as joint tenants, community property or tenants in common.
Apart from San Francisco’s marriage nouveau there are some other considerations folks should have regarding marriage and property rights. Some states (California, for example) are community property states. If a couple is married in a community property state, then moves to a non-community property state, their respective property rights may change to reflect the laws of their new state of residence. Legal advice should be sought.
Some states also recognize the legality of common law marriages. A common law marriage is one where there is mutual consent and a sharing of property such as a joint checking account, the couple hold themselves out to others as being married and they have been together for a “significant time” even though that length of time is not strictly defined.
A noted case was Marvin v Marvin, in which Michelle Marvin sued the actor Lee Marvin for what has since been called “palimony.” She eventually completely lost because the court found that she and Lee Marvin never agreed during their cohabitation to combine their efforts and earnings or to share equally in any property accumulated as a result of their efforts.
Different states that allow common law marriage have different requirements. In addition, states are required to recognize common law marriages from other states.
I have the impression that in the past some people have pursued common law marriage as a means of avoiding a divorce proceeding if and when the common law marriage ends. Several scenarios show why this is a bad idea: There will still be disputes about property rights, and you might have to do more work to show that you were or weren’t common law married, then get a divorce to dissolve it. There is no such thing as a common law divorce. If your common law spouse were killed or injured in a traffic accident that was someone else’s fault you might have to litigate the fact that you had a common law marriage and were entitled to sue for wrongful death. If your common law spouse dies intestate and you have no children, you could get into a legal dispute with your spouse’s parents, brothers and sisters as to who should inherit your spouse’s belongings.
This brings up one of the legally knotted results of the same-gender marriages. Marriage is supposed to have comity. The U.S. Constitution requires every state to accord “full faith and credit” to the laws of other states. However, some states that specifically disallow same-gender marriages also specifically do not recognize same-gender marriages performed in other states.
It would appear that the legal issues involving marriage have become as knotted as a Rastafarian’s locks and will require the ye ol’ U.S. Supreme Court to unravel them.
These are basic generalizations about property rights, which vary considerably from state to state. If you do anything out of the mainstream, make sure you minimize the extent to which you compromise your property rights. Seek legal advice. Don’t put the equity in your most valuable possession up as collateral for your opinion.
Dick Lepre is a loan agent with Residential Pacific Mortgage in San Francisco, Calif.
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