Protection from Creditors - Real Estate Prenup

This Addendum ensures that the property interests of non-debtor co-owners are protected in the event a creditor pursues a claim, judgment, or lien against any individual co-owner. It is intended to prevent involuntary loss of co-owned real estate due to another party’s financial or legal troubles and to uphold the stability of the ownership structure.

1. No Individual Authority to Encumber Shared Title

No Co-Owner may encumber, pledge, or otherwise place a lien on the Property beyond their individual interest without the express written consent of all Co-Owners. Any such unauthorized encumbrance shall be void as to the interests of the non-consenting Co-Owners.

2. Creditor Risk Containment Clause

If a creditor of one Co-Owner obtains a judgment, lien, or foreclosure action against that Co-Owner’s share in the Property, such action shall not impact the possessory, financial, or operational rights of the other Co-Owners.

To the extent permitted under CPLR §5206 and case law such as Graffeo v. Paciello, the parties agree that:

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The non-debtor Co-Owners shall retain their rights of possession and management

The creditor shall be limited to a charging lien on the debtor Co-Owner’s net equity only and shall not force sale of the Property unless partition rights are preserved and explicitly permitted in this agreement.

3. Forced Sale Protection Period

The parties agree to waive the right to file for partition for a period of at least 5 years from the date of property acquisition. During this period, no creditor or heir shall be permitted to enforce a partition action unless unanimously approved by all original Co-Owners

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4. Right of First Refusal in Case of Foreclosure

In the event of a foreclosure, auction, or involuntary transfer of a Co-Owner’s interest to a creditor or assignee:

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The remaining Co-Owners shall have 30 days to purchase the interest at the foreclosing party’s accepted bid or appraised fair market value (FMV), whichever is lower.

Filing of bankruptcy.

Pending litigation that may materially impact their share in the Property. Failure to provide such notice shall trigger default protections under the prenup and may constitute grounds for a forced buyout.

5. Mandatory Notification

Each Co-Owner agrees to notify the others in writing within 5 business days of any of the following:

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Receipt of a notice of default or judgment.

Filing of bankruptcy.

Pending litigation that may materially impact their share in the Property. Failure to provide such notice shall trigger default protections under the prenup and may constitute grounds for a forced buyout.

6. Anti-Circumvention and Successor Binding

This Addendum shall bind and inure to the benefit of all successors, assigns, heirs, estate representatives, and creditors of the Co-Owners. Any successor-in-interest to a Co-Owner’s share shall be required to sign a joinder agreeing to be bound by all provisions of the Real Estate Prenup and this Addendum as a condition of holding any interest in the Property.

7. Dispute Resolution

Any dispute arising under this Addendum, including claims of breach or disputes with creditors or successors, shall be resolved in accordance with the Dispute Resolution process outlined in the Real Estate Prenup. Binding arbitration shall be the final method of resolution

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Signature & Acknowledgement

By signing below, the Co-Owners confirm that they have read, understood, and agree to the terms of this Addendum, which shall be made part of the Real Estate Prenup

Co-Owner A:

Name

Signature

Date

Co-Owner B:

Name

Signature

Date

Co-Owner C (if applicable):

Name

Signature

Date

Co-Owner D (if applicable):

Name

Signature

Date

Protect Your Investment, Secure Your Partnership

Protection From Creditors Addendum

1. No Individual Authority to Encumber Shared Title

2. Creditor Risk Containment Clause

3. Forced Sale Protection Period

4. Right of First Refusal in Case of Foreclosure

5. Mandatory Notification

6. Anti-Circumvention and Successor Binding

7. Dispute Resolution

Signature & Acknowledgement

Co-Owner A:

Co-Owner B:

Co-Owner C (if applicable):

Co-Owner D (if applicable):

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