More often than not, you will find that you cannot sell community or separate
assets in California once a divorce, legal separation or nullity suit
has commenced. Once a Petitioner spouse has filed a divorce petition and
the Respondent spouse has been served with the divorce petition and summons,
there are four automatic temporary restraining orders (ATRO) that take
effect. Essentially, both spouses are restrained from selling, transferring,
disposing etc. any property or assets without the other parties written
consent or a court order.
Family Code 2040(a)(2).
The ATROs remain in effect until there is either a final judgment, the
case is dismissed or through further order of the court.
Family Code 233(a).
There are limited exceptions to this rule. Although restraining orders
may seem negative, the rationale is actually to level the playing field
of spouses by putting community and separate property interests on hold
while the courts figures out how property and assets will be divided.
Violating the ATROs can lead to fines or jail time.
The exceptions to the ATRO's regarding property include:
Usual course of business exception: this is a narrow exception. If selling property is part of a spouse's
"usual course of business" then it can fall outside the scope
of the ATRO. Some examples might include a spouse who deals in real estate
or property management might be able to claim selling a property had no
relation to the marriage and was in the usual course of business. It is
not enough that a spouse 'always managed' the property and then sells it.
Necessities of life exception: using community or separate assets or property to pay for the necessities
of life. For instance, food and rent are generally considered necessities
of life and outside the scope of ATRO's. However, this is not automatic.
Payment of community obligations are not always protected as 'necessities
Payment of attorney fees and costs exception: parties may use community funds to pay reasonable attorney fees and costs
to retain legal counsel in the family law proceedings. Use of community
funds must be accounted for, so you should keep careful records of the
Each case is different. What may be reasonable to one spouse or party
may be unreasonable to the court. Spouses can always play it safe by asking
the other spouse for written consent or asking the court for permission
to use property or assets.