What Happens to Jointly Owned Rental Property After Divorce?

A rental property can be one of the more valuable assets a couple owns, and one of the trickiest to untangle in a divorce. Who keeps it? Who keeps collecting the rent? And does it even matter whose name is on the deed?

Is the Rental Property Marital or Separate?

Before a court can divide anything, it has to decide what category the property falls into. Under Florida law, assets acquired during the marriage, whether by one spouse individually or both jointly, are generally treated as marital property subject to division. Real property held by the parties as tenants by the entirety is presumed to be a marital asset regardless of when it was acquired, and the spouse who disagrees carries the burden of proving otherwise.

So what if one spouse bought the rental before the wedding? That does not automatically keep it separate. If marital funds were used to pay down the mortgage, cover renovations, or manage the property during the marriage, some portion of its value may still count as marital, even if only one name appears on the original purchase documents.

How Florida Courts Divide Jointly Owned Real Estate and Common Outcomes for Divorcing Co-Owners

Florida is an equitable distribution state, which means courts start from the premise that the total marital assets should be divided equally, then adjust based on relevant factors if a strictly equal split would not be fair.

There is rarely a single template for how these cases resolve. Sometimes one spouse buys out the other’s interest and keeps the rental as an investment. Sometimes the property is sold, with proceeds split according to the court’s distribution order. In other cases, particularly when refinancing isn’t realistic, former spouses continue as co-owners for a period of time under a written agreement that spells out who manages the property and how income and expenses are shared.

Each option carries its own practical and financial tradeoffs. A buyout requires enough liquidity or financing to pay the other spouse their share, or a refinance transaction to pull cash from the equity in the property. A sale ends the shared ownership cleanly but depends on market timing. Continued co-ownership can work, but it requires the kind of cooperation that is not always realistic between former spouses.

Contact Us for Guidance

Untangling a jointly owned rental property is rarely as simple as splitting the equity down the middle, and the stakes are high enough that guesswork is not a good strategy. What is this property actually worth today? How much of its value is marital? Those are questions worth answering carefully before any agreement is signed.

Don’t face these questions without professional guidance. Contact our Fort Lauderdale property division lawyers at Haber | Blank LLP for an in depth consultation before moving forward.

Source:

flsenate.gov/Laws/Statutes/2018/61.075