The Bursting Bubble Dealing with the Marital Home During a Real Estate Recession

Back in the day, divorcing couples could easily sell their house and split the money. But now, with the housing market in bad shape, it’s harder to sell a house for a good price. People are stuck with houses they can’t sell or afford to buy out their ex-spouse. So, one person often has to stay in the house until the market gets better. If a couple divorces, a judge can give one of them the right to live in the family home for a while. This is usually done to help take care of the kids or to keep the home in good condition. During this time, both people still own the home, but the one living there has the right to use it. If the person living there keeps the other person from using the home, they might have to pay rent. If the home makes money, both people get a share of it. When more than one person owns a property together, they have to share the costs like taxes and mortgage payments. Sometimes, it’s not clear who has to pay what, especially in cases involving both family and real estate law. Courts have tried to figure this out, but it’s still confusing. In the Barrow case, Mrs. Barrow was awarded half of the marital home, but her ex-husband continued to live there. When she asked for half of the rent that he should have paid, the court said no because she didn’t officially ask him to leave. In the Kelly case, Mrs. Kelly was given exclusive possession of the home, and when she asked for half of the mortgage payments and maintenance expenses, the court said yes because she had the right to live there alone. Mr. and Mrs. Brandt made an agreement about their house when they got divorced. The agreement said that Mrs. Brandt could stay in the house and would pay for things like the mortgage and taxes. When the house was sold, she wanted to be reimbursed for the money she spent. The court said she should be reimbursed because it’s the law, even though the agreement didn’t talk about it. One judge thought this was unfair and another judge thought Mrs. Brandt shouldn’t get any money back. This case led to changes in the law later on. In the case of Goolsby v. Wiley, the court ruled that even though the final judgment didn’t mention it, the former wife was still entitled to be reimbursed for the costs she paid for the home while waiting for it to be sold. This is because there was no specific language in the judgment saying she wasn’t entitled to reimbursement. This decision was made based on similar cases in the past. If you and your spouse are getting a divorce and you both own a house, you won’t automatically get money from the sale of the house unless your divorce agreement says so. The court will consider things like who’s living in the house, if they’re getting alimony or child support, and other factors to decide who gets money from the sale. The law made after 1997 hasn’t cleared up the confusion from before that time. The law treats agreements and judgments about divorce differently. If an agreement doesn’t say anything about who pays for things like the house, then there’s no right to get money back when the house is sold. The law now takes priority over common practices for sharing expenses. For example, Mrs. Brandt wouldn’t get any money back for the expenses she paid while living in the house because the agreement didn’t say she could. But if the court decides who has to pay for what in a judgment, then the law says it has to look at certain things before making a decision. In recent court cases, it’s become important for the trial court to specifically address the issue of credits and setoffs in the final judgment. If the judgment is silent on these issues, it may not be assumed that the court considered them. It’s important for the judgment to explicitly state whether the out-of-possession party is entitled to a credit for rental value. This is especially important when possession of the home is awarded for the benefit of the parties’ children. In one case, the court ruled that the out-of-possession party is never entitled to a credit for rental value when possession is awarded for the benefit of the children. Another case illustrated that the grounds upon which possession is being awarded are significant, and the judgment should state these grounds. Overall, recent cases have shown that silence in the final judgment is not enough, and it’s important for the court to affirmatively address the issue of credits and setoffs. The court in a case called Ascherman made a decision about who gets to deduct mortgage interest and taxes on a house during a divorce. They said the person who pays those expenses can deduct them on their taxes. But it’s important to follow the rules of the IRS and figure out how to split the deductions fairly. It’s important to consider the tax benefits when dividing property in a divorce. From 2008 to 2009, Congress passed two laws that gave tax credits to first-time homebuyers. If you bought a home during this time, you could get a credit of up to $8,000. If you got the credit, you might have to pay it back if you sell your home within three years. When going through a divorce, you should think about how these tax credits will affect your decisions about the house. You should also consider how much money you might get from selling the house and whether you can afford to keep it. If the mortgage is more than the house is worth, you should think about whether you want to take on that debt. Sometimes when a couple gets divorced, they have to figure out what to do with their house. If they can’t afford to buy each other out, they might decide to sell it now or wait until the housing market gets better. They’ll have to decide on a price and who gets to live in the house until it’s sold. If one person gets to live in the house, they might have to pay the other person for their share or get a discount on what they owe. It’s a tough time for people going through a divorce, and their lawyer should help them keep their house if they can. This article talks about how to divide property and debts when a married couple gets divorced in Florida. It mentions cases where courts have decided who gets credit for paying certain expenses. It also mentions a tax credit for people who pay mortgage interest. It’s written by a lawyer who specializes in family law. We want our members to understand their responsibilities to the public, make the justice system better, and improve the study of law.

Source: https://www.floridabar.org/the-florida-bar-journal/the-bursting-bubble-dealing-with-the-marital-home-during-a-real-estate-recession/