Can My Wife LEASE OUT Our Rental Property Without My CONSENT?

Q. I am recently separated, but neither my wife nor I have filed anything with the Court. I just learned she renewed the lease for a rental property we own in Joshua Tree, without my consent. I don't want to tie the property up with a long term lease, given that we will soon divorce and we may have to sell it. Can she do this?

Eddie, Twentynine Palms, CA

Eddie -

In the absence of a divorce having already been filed, either spouse has the right - acting alone - to make decisions affecting the management and control of community property. This rule is codified in Family Code section 1102. In answer to your question, subsection (a) requires that both spouses join in executing any instrument by which any leased community estate real property is rented for a period exceeding one year. This means that she can execute a lease without your express consent for one year or less. Section 1102 exists partly to protect the rights of third parties who do business with one spouse, as with the tenants of your rental; otherwise, they could not rely on the assumption of uninterrupted possession because at any time the other spouse (i.e., you) could step out of the shadows and declare the extension or renewal void despite the fact the tenant knew nothing about the status of their landlords' marriage. Despite her authority to unilaterally re-let the property, however, your wife's conduct must still meet her general fiduciary obligation standards per Family Code section 721 even though no family law case is yet pending.

Once the dissolution is filed, the Family Code section 2040 "ATROS" spring into existence by operation of law. However, they don't contain any limiting language concerning leases, although subsec. (a)(2) restrains "both parties from transferring, encumbering, hypothecating, concealing, or in any way disposing of any property, real or personal, ..., without the written consent of the other party or an order of the court, except in the usual course of business or for the necessities of life,..." Given the wording of section 1102, it is likely that unilaterally extending a year's lease will not be viewed as a violation of the ATRO's. It is certainly something you might obtain temporary restraining orders to prohibit, before the deed is done so to speak. But you will have problems getting an order undoing an already consummated lease extension, because if successful this would negatively impact the rights of third party renters who are not a party to your case without due process being afforded to them.

Keep in mind that interspousal fiduciary duties are ongoing, notwithstanding separation and/or divorce proceedings. Family Code section 2102(a), (b) expressly provides that the 721 fiduciary duties continue from the date of separation until each joint asset in question has been actually distributed or awarded to one or the other of you as part of the final resolution.

Your best remedy therefore, assuming that this lease extension actually causes you financial or other injury instead of being merely an insult (we frequently see spouses flexing different muscles as power dances), is going to be a 721 based claim. For instance, if the re-let is below fair rental value to her daughter from a former marriage, certainly you have a claim based upon the wife's self-dealing. If, on the other hand, your wife's daughter has been living there for the past five years and this is a simple expression of business as usual, your for damages recovery becomes less compelling. Spouses who ignore their fiduciary duties tend to act out on a number of fronts, giving rise to combined claims of repeated misconduct towards more than one asset or debt. Chasing the other spouse for one breach of fiduciary duty may be prohibitively expensive in terms of time and attorney fees but as with all other of life's struggles, there are tipping points; and often pushing back is the only way to get the other side to stop it, but then we know how shoving matches too often end.

In all cases where you want to protect your remedies against a financially abusive spouse as part of your divorce recovery, you want to make your objections clear and memorialize them as soon as you know you have reason to object. Silence implies acquiescence, so don't sit on your rights. At the same time, keep it simple. Rants invariably play into the side's hand.

Author: T.W. Arnold