Section 236 of the New York Domestic Relations Law has recently been amended to limit the ability of both plaintiffs and defendants in matrimonial actions to transfer or encumber their real property.
Under amended Domestic Relations Law Section 236 (PART B) (2) (a) "Matrimonial Actions" are defined as:
". . . actions for an annulment or dissolution of a marriage, for a divorce, for a separation, for a declaration of the nullity of a void marriage, for a declaration of the validity or nullity of a foreign judgment of divorce, for a declaration of the validity or nullity of a marriage, and . . . proceedings to obtain maintenance or a distribution of a marital property following a foreign judgment of divorce, . . . ".
Amended Domestic Relations Law Section 236 (PART B) (2) (b) provides that:
"With respect to matrimonial actions which commence on or after the effective date of this paragraph, the plaintiff shall cause to be served upon the defendant, simultaneous with the service of the summons, a copy of the automatic orders set forth in this paragraph. The automatic orders shall be binding upon the plaintiff in a matrimonial action immediately upon the filing of the summons, or summons and complaint, and upon the defendant immediately upon the service of the automatic orders with the summons. The automatic orders shall remain in full force and effect during the pendency of the action, unless terminated, modified or amended by further order of the court upon motion of either of the parties or upon written agreement between the parties duly executed and acknowledged. "
The automatic orders required to be served with any summons in a "matrimonial action" includes the following automatic order:
"(1) Neither party shall sell, transfer, encumber, conceal, assign, remove or in any way dispose of, without the consent of the other party in writing, or by order of the court, any property (including, but not limited to, real estate, personal property, cash accounts, stocks, mutual funds, bank accounts, cars and boats) individually or jointly held by the parties, except in the usual course of business, for customary and usual household expenses or for reasonable attorney's fees in connection with this action." [emphasis added]
Effective immediately, any Stewart Title Insurance Company certificate of title, title report or commitment must contain the following requirement in Schedule B, Section I:
"Proof by affidavit required that the seller / mortgagor in the transaction being insured is not a party to any matrimonial action brought under Domestic Relations Law Section 236".
All Stewart Title Insurance Company owner / loan policies issued on or after June 30, 2010 must contain a policy exception for rights of the grantor's / mortgagor's spouse unless the transfer of title or encumbrance of title is completed pursuant to a court order or pursuant to the written consent of their spouse. Stewart Title's standard form of title affidavit has been amended to include a representation that the transferor / mortgagor in the transaction being insured is not a party in a matrimonial action brought under Domestic Relations Law Section 236.
These requirements do not apply in transactions in which the transferor / mortgagor in the insured transaction is not a natural person or in transactions in which the deed and / or mortgage being insured is executed by both a husband and wife.
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