How are Rental Properties Handled During Divorce?
Rental properties often prove to be a stable and welcome source of income during a couple’s marriage. Deciding what will happen to these kinds of assets after divorce can, however, become quite complicated. Fortunately, this is exactly the type of issue an experienced Fort Lauderdale property division lawyer is equipped to handle.
Florida law requires that all of a couple’s marital property (assets acquired during marriage) be equitably divided upon divorce. While equitable can mean a 50-50 split between the parties, this is not always the case, as judges are ultimately guided by what would be fair. Often, couples are able to reach these agreements without the help of a judge, in which case, the agreement need only be approved. Otherwise, the court will step in and decide what would qualify as an equitable division of a couple’s marital property.
Is the Property a Marital Asset?
How an asset gets divided depends largely on whether it qualifies as a marital asset and was acquired during the marriage itself, or is actually separate property, meaning that it was brought into the marriage by only one of the parties and will remain in the sole possession of the original owner. While this may seem like a relatively simple analysis, it can actually become quite complicated when dealing with rental properties. This is due to the fact that, even when one spouse owned a rental property prior to marriage, he or she will likely share any income that stems from that rental with the other spouse. Furthermore, if both parties used marital funds to make mortgage payments or repairs, the property could change from a purely separate asset to a partial or even complete marital asset.
Don’t Forget to Address These Issues
When determining how to deal with a rental property during divorce, it is important for the parties involved to address specific issues, including:
- What their plans for the property entail, which in turn, may hinge on whether the property is commercial or residential;
- Whether either of the parties want to continue renting the property;
- Whether either party wants to retain the property and use it as a residence, thereby converting it to a non-rental property;
- Whether the parties could, or are interested, in co-owning the asset and dividing future income; and
- The value of the property both as a rental and a permanent residence.
The answers to these questions will dictate the kind of arrangement that a couple comes up with. If neither party wants to maintain and rent the property, for instance, they could decide to sell the asset and share the money equally. Alternatively, one party could agree to give up another asset of an equal value in exchange for retaining the property. To ensure that this kind of arrangement is fair, however, the parties will need to consult with an appraiser or real estate broker who can place a value on the property itself and assess the market value of continuing to use the property as a rental.
Do You Need Help Dividing Your Assets?
An experienced divorce attorney can provide you with the advice and guidance that you need to divide your marital assets. Please call dedicated Florida property division lawyer Sandra Bonfiglio, P.A. at 954-945-7591 to learn more.