From the Trenches to the Bench
How the Court Can Support Effective Real Estate Special Commissioner Outcomes
When the marital residence is ordered sold, the expectation is relatively straightforward: the home will be listed, marketed, sold, and the proceeds distributed according to the parties' agreements and court orders.
But from the real estate trenches, the process is not always black and white. In fact, there are many shades of gray that require experience in handling complex real estate transactions and understanding the provisions of Rule 69 agreements, divorce decrees, and court orders.
Selling a home during a divorce involves much more than putting a sign in the yard. There are often emotional conflicts, financial disagreements, uncooperative parties, deferred maintenance, disputes over pricing, and disagreements about how the equity should be distributed.
A Real Estate Special Commissioner (SC) is appointed to help the parties navigate these challenges and move the sale forward. Our goal is to resolve disagreements, facilitate the transaction, and keep the parties out of court whenever possible.
Having served as a Real Estate Special Commissioner for over a decade in several courts, I've learned that three things make an enormous difference in our ability to successfully complete court-ordered real estate transactions:
- Emergency hearings when a buyer or closing is at risk.
- Expedited hearings when disputes or noncompliance are interfering with the sale.
- Precise court orders that clearly define the parties' obligations and can be implemented by real estate professionals and title companies.
These three forms of judicial support can mean the difference between a successful closing and a failed transaction.
A Real Estate Special Commissioner: A Neutral Real Estate Professional, Not an Attorney and Not a Judge
Under Arizona Rule of Family Law Procedure 95(g), the Court may appoint a Real Estate Special Commissioner to assist parties with the division and disposition of community real property when they are unable to agree.
A qualified Special Commissioner brings together several areas of expertise: real estate sales, market analysis, negotiation, conflict management, and an understanding of the court process.
I often describe our role as a conduit of communication between the parties. We help the parties understand the real estate process, negotiate disagreements, and fulfill their obligations under the decree, Rule 69 agreement, and court orders.
What we do not have is unlimited authority.
A Real Estate Special Commissioner cannot simply make unilateral decisions because one party is being unreasonable. We cannot automatically sign contracts on behalf of a party, determine disputed reimbursements, or decide how sale proceeds should be distributed.
The Court must provide oversight to keep the authority of the Special Commissioner in check. When appropriate, the Court can grant specific authority under Rule 89, including authorizing the Special Commissioner to execute documents on behalf of an uncooperative party.
It must also be recognized that there is an inherent potential conflict of interest in the Special Commissioner's compensation structure. As Realtors, we are generally compensated only when the home is sold. Although our responsibility is to remain neutral and act in the best interests of the transaction and both parties, our compensation is tied to the successful completion of the sale.
For this reason, judicial oversight is particularly important. The Court must ensure that the Special Commissioner remains within the scope of their authority, that neither party's rights are compromised, and that all parties receive due process.
The Standard Order for Appointment of Real Estate Special Commissioner, used in Maricopa County Superior Court, provides a roadmap for the transaction. It establishes rights, responsibilities, deadlines, and procedures for resolving disputes.
When that process works as intended, the Special Commissioner can often resolve disagreements without requesting a hearing.
But when negotiations fail, we need access to the Court.
1. Emergency Hearings: When Every Day Matters
Real estate operates on contractual deadlines, and buyers are not obligated to wait indefinitely while sellers resolve their disagreements.
Consider a situation in which a home has been on the market for several months. A qualified buyer submits a reasonable offer, but one spouse refuses to sign the purchase contract.
The other spouse wants to accept. The Special Commissioner believes the offer is consistent with market conditions. The buyer has given the sellers 48 hours to respond.
What happens next?
If the Special Commissioner cannot obtain an agreement, judicial intervention may be necessary. But if a hearing cannot be scheduled for several weeks, the buyer may move on to another property.
The opportunity could be lost.
Even after a contract has been accepted, similar emergencies can arise. A party may refuse to sign closing documents, fail to vacate the home, or otherwise interfere with the closing.
A delayed closing can place the sellers in breach of contract, expose them to additional costs, and potentially result in litigation.
What We Need from the Court
When a buyer or closing is genuinely at risk, access to an emergency hearing within one to three business days, whenever practicable, can be critical.
The Special Commissioner should provide the Court with a concise report explaining the circumstances, the parties' positions, relevant contractual deadlines, and the specific relief requested.
The Court can then determine whether intervention is warranted, including whether to order a party to sign or authorize execution of documents under Rule 89.
The objective is not to bypass due process. It is to provide an opportunity for judicial review before the transaction collapses.
2. Expedited Hearings: When a Party Is Interfering with the Sale
Not every disagreement constitutes an emergency. However, some problems become increasingly damaging when allowed to continue.
For example, one spouse may repeatedly decline showing requests, refuse reasonable access to the property, fail to maintain the home, or oppose market-supported price adjustments.
These actions can substantially reduce the property's exposure to qualified buyers.
A home that should sell in 60 days may remain on the market for months because buyers cannot gain access or because the asking price is inconsistent with market conditions.
Meanwhile, mortgage payments, utilities, insurance, maintenance, and other carrying costs continue.
The Special Commissioner may attempt to resolve these problems through written communications, market reports, negotiations, and recommendations. But there comes a point when continued negotiations are no longer productive.
What We Need from the Court
An expedited or accelerated hearing within approximately 30 days can provide an opportunity to address persistent noncompliance before the property's marketability suffers further.
The Court may need to clarify showing requirements, enforce maintenance obligations, address pricing disputes, establish deadlines, or consider other appropriate remedies.
A timely hearing also reinforces an important principle: the parties are required to comply with their court orders, even when they disagree with the Special Commissioner's professional recommendations.
Interestingly, the availability of judicial intervention can itself encourage cooperation.
In my experience, once the parties understand that unresolved disputes may be presented to the judge, they are often more willing to negotiate and reach an agreement.
That is precisely what we want.
The best outcome is not necessarily a hearing. It is a successful sale without the need for one.
3. Precise Court Orders: The Roadmap to a Successful Closing
One of the greatest challenges in court-ordered real estate sales is unclear or incomplete language in Rule 69 agreements, divorce decrees, and court orders.
Realtors and title companies need precise instructions to understand their responsibilities and carry out the transaction.
For example, a decree may state:
"The Wife shall refinance the marital residence and pay the Husband his share of the equity."
But what happens if she cannot refinance?
When must the home be listed? Who selects the Realtor? Who determines the listing price? What happens if one party refuses to sign?
Without clear instructions, the parties may find themselves returning to court simply to determine how to implement the original agreement.
A more effective approach establishes the refinance deadline, the required listing date if refinancing is unsuccessful, and the process for selecting a Realtor or appointing a Real Estate Special Commissioner.
The same principle applies to repairs, possession, property access, mortgage payments, and other obligations.
The more clearly these issues are addressed at the outset, the fewer opportunities there are for disagreements to delay the transaction.
Using Home Equity as a Bank: Reimbursements and Offsets
Another particularly challenging issue involves the distribution of sale proceeds.
In divorce cases, home equity is frequently used to satisfy reimbursements, offsets, attorney's fees, and other financial obligations.
One of the most important considerations when drafting a Rule 69 agreement or decree is specifying exactly how these reimbursements and offsets are to be paid.
Are they to be paid independently of the sale of the home? Are they to be paid from the net sale proceeds? Or, more specifically, are they to be deducted from one party's share of the proceeds and paid to the other party?
These distinctions matter tremendously to the Realtor, the parties, and especially the title company responsible for disbursing the funds.
For example, consider the following decree language:
"The net proceeds from the sale of the marital residence shall be divided equally between Husband and Wife, 50/50. Husband shall retain his motorcycle and shall reimburse Wife $15,000 from Husband's share of the net sale proceeds at the close of escrow."
This language accomplishes several important things. It identifies the obligation, specifies the amount, identifies who is paying whom, and clearly directs that the reimbursement is to come from Husband's share of the proceeds at closing.
Compare that with a decree that simply states:
"Husband shall retain his motorcycle and reimburse Wife $15,000."
Does this mean Husband is required to pay Wife immediately? Is the payment due at some future date? Is it intended to be paid from the proceeds of the home sale? If so, from whose share?
Without clarification, the Realtor and title company may be left trying to interpret the decree, something neither should be expected to do.
And what happens when one spouse claims additional reimbursements for repairs made after the decree? Or when the proceeds are insufficient to satisfy all the obligations?
The Special Commissioner cannot simply decide who is entitled to the money.
Furthermore, title companies may be reluctant to disburse disputed funds or interpret ambiguous court orders because of potential liability.
Although the sellers may prefer a particular title company, the buyer's selection of the escrow company can complicate matters.
What We Need from Attorneys and the Court
Clear language identifying who receives what, from whose proceeds, when payment is due, and under what circumstances.
When reimbursements or offsets are intended to be paid from the sale of the marital residence, the decree should expressly state that.
If the reimbursement is to be deducted from one party's proceeds, identify that party and the specific amount.
If the obligation is to be paid outside the real estate transaction, make that equally clear.
When disputes remain unresolved, the order should address whether funds may be held in escrow or deposited with another authorized party pending further agreement or court direction.
The instructions should be sufficiently precise that the escrow officer can implement them without being asked to interpret the parties' legal rights.
This is particularly important because disagreements over proceeds can arise just days before closing.
A dispute over a $5,000 reimbursement should not unnecessarily jeopardize a $500,000 real estate transaction.
A Case Study: When Judicial Intervention Made the Difference
Consider the following illustrative scenario, drawn from the types of challenges Real Estate Special Commissioners encounter.
A divorce decree requires the Wife to refinance the marital residence by June 30. If she cannot refinance, the property must be listed for sale by July 15.
The Wife misses the refinance deadline and resists selling the home.
A Real Estate Special Commissioner is appointed and recommends listing the property for $500,000 based on a comparative market analysis.
The Husband agrees. The Wife wants $520,000.
After negotiations, the parties agree to test the market at $510,000, with a reduction to $500,000 if the home does not receive offers.
But the problems continue.
The Wife declines eight of ten showing requests, refuses open houses, and fails to maintain the property in market-ready condition. She also refuses to execute the agreed price reduction.
After approximately 45 days on the market, the Special Commissioner requests an accelerated hearing.
The Court orders compliance with showing requirements, maintenance obligations, and timely execution of documents.
Then, on day 75, a buyer submits a $475,000 offer with a 48-hour response deadline.
The Husband wants to accept. The Wife refuses.
An emergency hearing is requested and held on the second business day.
After considering the circumstances, the Court orders the Wife to execute the required documents within 24 hours, with Rule 89 authorization available if she fails to comply. The Court also addresses possession, sanctions, and disputed reimbursements.
The transaction can now move forward.
This example demonstrates why different types of judicial intervention are necessary at different stages of a real estate sale.
The first hearing addressed ongoing conduct that was interfering with marketing the property.
The second addressed an immediate contractual opportunity that could have been lost.
Both served a distinct purpose.
Best Practices: What the Special Commissioner Should Bring to the Court
Judicial support is most effective when the Special Commissioner provides organized, objective information.
When requesting a hearing, the Special Commissioner should identify the specific issue, explain efforts to resolve it, and provide documentation supporting the requested relief.
That may include the current status of the listing, the positions of both parties, market analysis, showing activity, buyer feedback, communications, and relevant contract deadlines.
The Special Commissioner should distinguish between professional real estate recommendations and matters requiring a judicial decision.
For example, we can provide an opinion regarding whether an offer is consistent with market conditions. But when the parties disagree about accepting that offer, the Court may need to resolve the impasse.
I also recommend including the Special Commissioner in hearings that directly affect the property sale.
The Realtor is often in the best position to explain current market conditions, buyer behavior, transaction deadlines, and the practical consequences of a delay.
This information can help the Court make informed decisions.
The Importance of Appointing a Qualified Special Commissioner
Not every experienced Realtor is qualified to serve as a Real Estate Special Commissioner.
The role requires more than traditional real estate expertise.
A Special Commissioner must understand the limits of their authority, maintain neutrality, communicate effectively with parties in conflict, document their actions, and know when judicial intervention is appropriate.
Attorneys should interview prospective candidates and consider their real estate experience, conflict management training, courtroom experience, and familiarity with divorce-related transactions.
I also recommend submitting the candidate's professional CV to the Court.
The Standard Order for Appointment of Real Estate Special Commissioner is equally important. It provides a framework that balances the Commissioner's responsibilities with the parties' rights and the Court's oversight.
Case-specific provisions can be added when necessary, while preserving the integrity of the standard order.
A Team Effort
The real estate market does not operate on the Court's calendar.
Buyers have choices. Interest rates change. Property conditions deteriorate. Contractual deadlines expire. And the longer a home remains unsold, the greater the potential financial and emotional consequences for the parties.
Real Estate Special Commissioners are trained to manage the real estate transaction, communicate with the parties, negotiate disagreements, and work toward a successful closing.
But we cannot resolve every conflict independently, nor should we.
The Court provides the essential oversight that protects the parties' rights and ensures compliance with its orders.
When attorneys draft precise agreements, judges provide timely access to hearings when warranted, and qualified Special Commissioners manage the real estate process, the entire system works more effectively.
The result is fewer unnecessary delays, fewer failed transactions, less litigation, and a greater opportunity for both parties to preserve their equity and move forward with their lives.
Ultimately, that is our shared goal: to get the marital residence sold, distribute the proceeds appropriately, and help the parties move on.
Chris Carter Kent, REDS-AZ, Real Estate Special Commissioner
Associate Broker, Compass
