While it is typically not recommended, in some instances divorcing couples opt to retain joint ownership of the marital home, even after the divorce is finalized. Typically, this approach is taken if the home is underwater meaning that the debt exceeds the value of the home. The parties retain ownership of the home hoping that the value of the property will increase, and the property can be sold in the future, hopefully at a profit. When this approach is taken, one party will be granted exclusive use and possession of the marital home and will be responsible for most or all of the expenses related to the marital home. Unfortunately, disputes often arise over how the parties are to split the proceeds or losses from the sale of the marital home in the future.
Once the divorce is finalized, the parties will own the property as tenants in common. This means that each person owns a divisible one-half interest in the property. However, the property can only be divided, or sold, pursuant to the terms of the marital settlement agreement or final judgment. As such, the tenants in common have joint responsibilities and have a mutual obligation to pay the charges upon the property. It is impermissible, therefore, to require one spouse, by his or her payments on the house, to increase the equity of the other spouse. This provision only makes sense as “the law does not, and cannot…give one spouse a vested interest in the other spouse’s future earning ability for purposes of distribution of marital property.” Hallman v. Hallman, 575 So. 2d 738, 738 (Fla. 5th DCA 1991). If the trial court were to have ordered one spouse to continue to pay the mortgage, but not give him or her credit for the reduction in the debt, it would be giving the one spouse an interest in the future earnings of the other spouse as the spouse would benefit by the reduction in marital debt.
“When a final judgment requires only one spouse to make the mortgage payments on a jointly held home until such time as the house is sold and is silent as to whether the spouse who pays the mortgage is to receive credit, the right to a credit arises by operation of law.” Tinsley v. Tinsley, 490 So. 2d 205, 206 (Fla. 3d DCA 1986). “A trial judge may order one party to make the total mortgage payments on a jointly held home without receiving credit in return. However, to do so, there must be a basis in the record for relieving the spouse of his obligation, and it must be explicitly stated in the final judgment” Id. at 206. “A person who makes mortgage payments on a home jointly held with an ex-spouse as tenants in common is entitled to a credit for the ex-spouse’s share of the ownership expenses. The fact that possession of the marital home is awarded to one spouse…has no effect upon the ownership by the parties who hold the property as tenants in common, and the right to reimbursement is only postponed until the property is sold.”
If you are considering waiting to sell the home until years after the divorce, the language in the agreement or final judgment must be extraordinarily clear as to how all expenses will be split and who will receive credit for those expenses upon the sale of the marital home. Otherwise, if the language is ambiguous, it could lead to unnecessary and protracted litigation in the future.
After a divorce is finalized, if you and your ex-spouse still own a home together in Florida, there are several legal and practical considerations to keep in mind regarding the ownership and potential sale of the property:
