Should a non-owner spouse sign a listing agreement?

QUESTION: I have been asked to list a piece of residential property. The home was purchased by the husband before he was married and the property is titled in his name alone.  However, the husband and wife have lived in the home for many years. Does the wife need to sign the listing agreement? I have heard that the wife will have to sign the deed in order  for any buyer to obtain title insurance. Why is that necessary if the husband is the only record owner?

ANSWER: It is absolutely true that title insurers in North Carolina will insist that a non-owner spouse of an owner-seller sign a deed to any property owned during the marriage in order  to issue title insurance to the buyer of that property. The reason for this insistence are two provisions in the North Carolina General Statutes that grant certain rights to a “surviving spouse”.

Chapter 29 of the General Statutes is known as the Intestate Succession Act. That Act deals with how property is distributed to the family members of a person dying without a will.  Chapter 29 grants surviving spouses two options: they can either accept a specified share of the decedent’s assets, or they can take what is known as a “life estate” in certain property  owned by the decedent during the marriage. However, the surviving spouse cannot elect a life estate in any property if they have joined with their spouse in conveying that property.

Chapter 30 of the General Statutes gives surviving spouses the right to claim what is known as an “elective share” of the “Total Net Assets” of a decedent, even if the decedent made  different provisions in a will. The statute was intended to make it more difficult to disinherit a surviving spouse. Property owned by a spouse during marriage will be included in “Total Net Assets” unless the surviving spouse consented to the transfer of that property in writing (such as by signing a deed).

To avoid the argument that a surviving spouse retains some interest in property owned during a marriage, title insurers invariably insist that non-owner spouses join in any conveyance  of property by a married owner.

The Guidelines for Completing the Offer to Purchase and Contract (Standard Form 2G) and the Guidelines for Completing the Exclusive Right to Sell Listing Agreement (Standard Form 101G) both make reference to the statutory provisions described above. The Guidelines advise agents that a married seller’s spouse should always join in the execution of a listing  agreement and any subsequent purchase agreement, even if the spouse is not a record owner of the property. The signature of the non-owner spouse on the contract will obligate that  spouse to join in signing the deed.