In today’s economy parties to a divorce often agree to sell the marital home in their marital settlement agreements.  Often the sale of the marital home takes considerable time following settlement to accomplish and the parties must make arrangements for payment of maintenance expenses pending the sale.  It is important to be very careful when making these estimations because both parties will be bound to the literal marital settlement agreement, even if certain events are not anticipated at execution.  For example, in one recent case the parties agreed to split prepayment penalties, real estate taxes, assessment, association fees, and insurance until the home was sold.  They also agreed to resolve a dispute with the roofing company at closing.  Ultimately, the Wife in this case resolved the dispute without input of the Husband.  The Husband argued that since he was not involved in the resolution of the dispute he should not be liable for half of the cost.  The Fourth District Court of Appeal found

[t]he MSA [marital settlement agreement] required that the dispute between the parties and the roofer be resolved, not that they both make the decision to resolve the dispute.” Reilly v. Reilly, 37 Fla. L. Weekly D1970 (Fla. 4^th DCA 2012).

The marital settlement agreement further provided that the Husband pay the Wife $15,177 from his share of the proceeds of the sale of the home for equitable distribution resulting from the distribution of retirement accounts to the Husband.  Unfortunately, there were no proceeds from the sale of the home and thus the Husband argued he should not be liable for that payment.  The appellate court again found for the Wife stating

[p]ayment from the closing proceeds is not a conditions precedent, only a source for the payment.” Reilly v. Reilly, 37 Fla. L. Weekly D1970 (Fla. 4^th DCA 2012).

When drafting a marital settlement agreement it is very important that you consider the implications and consequences of even simple clauses in the agreement.  If you are signing a marital settlement agreement it is imperative that you seek legal counsel.

See, Reilly v. Reilly, 37 Fla. L. Weekly D1970 (Fla. 4^th DCA 2012).

Dustin Michael Butler is an Attorney with Martin Law Firm, P.L., whose practice focuses in Family Law and Civil Litigation.  He is admitted to practice law in the State of Florida and the Federal Court for the Middle District of Florida. He primarily practices in Lee County Florida in Cape Coral and Fort Myers, Florida.

Florida law is well settled that absent a contractual agreement releasing the liability on the promissory note, parties are responsible for the debt even after the foreclosure process is complete.  Therefore, a trial court cannot factor the speculative release of the debt in its award of equitable distribution.

A recent case out of the Third District Court of Appeal deals with this very issue.  The Husband wanted to let the marital home go into strategic foreclosure due to being underwater on the home by approximately $76,000.  However, the Wife did not want to have her reputation tarnished.  The trial court found that most people in their situation would elect strategic foreclosure and since the Wife insisted on keeping the house she should solely be liable for the debt.  The Appeals Court reversed finding this rationale legally insufficient.  Specifically, since Florida law is well settled that absent a contractual agreement releasing the liability on the promissory note, parties are responsible for the debt even after losing the collateral, the Appeals Court found the liability to be marital.  Further, as the trial court’s rationale was not within the statutory guidelines for deviation from an equal division, the Appeals Court found the trial court’s rational legally insufficient.  

See, Bryne v. Bryne, 37 Fla. L. Weekly D688 (Fla. 3d DCA 2012).

Dustin Michael Butler is an Attorney with Martin Law Firm, P.L., whose practice focuses in Family Law and Civil Litigation.  He is admitted to practice law in the State of Florida and the Federal Court for the Middle District of Florida. He primarily practices in Lee County Florida in Cape Coral and Fort Myers, Florida.

Sometimes the Court will allow one party to stay in the marital home while the minor child(ren) finish high school or reach majority.  It is important that the trial court set a specific enddate for the exclusive use and possession of the marital home though.  The Court can even order the mortgage to be split as part of equitable distribution and not as an inclusion in child support. 

Specifically in one recent case out of the Second District Court of Appeals the parties had a minor child.  The Court ordered that the minor child and mother could remain in the home until the minor child reached eighteen.  The trial court further ordered that the father pay child support and pay half the mortgage.  Once the child reached eighteen the home could be sold and the proceeds split.  The father appealed this decision and the Second District Court of Appeals found that the court had set a specific endpoint and that the requirement that he pay half the mortgage was not a part of his child support.

In the current economic times it sometimes does not make financial sense to sell the marital home immediately.  This is one solution which is sometimes explored in Florida Divorces.

See, Philips v. Philips, 37 Fla. L. Weekly D496 (Fla. 2nd DCA 2012).

Dustin Michael Butler is an Attorney with Martin Law Firm, P.L., whose practice focuses in Family Law and Civil Litigation.  He is admitted to practice law in the State of Florida and the Federal Court for the Middle District of Florida. He primarily practices in Lee County Florida in Cape Coral and Fort Myers, Florida.

More than likely yes, however the language in the agreement will be very important.  Florida’s Constitution provides for significant protections to homestead property provided certain requirements are met.  This protection extends to the sale of the home to purchase a new home.  However, in the case of a divorce, sometimes the parties agree to sell the marital home and divide the funds. 

Language in this agreement can be very important.  In a 1996 Fourth District Court of Appeal Case the husband agreed:

Judgments, Liens, and Lawsuits Satisfied: The Husband shall satisfy any and all outstanding judgments pending against him from his share of the proceeds received from the sale of the marital property.  Husband shall further be responsible for any and all potential claims, lawsuits, or judgments pending against him individually or in connection with his profession.”

Myers v. Lehrer, 671 So. 2d 864 (Fla. 4^th DCA 1996).  In that case the Court found that the Husband’s share of the proceeds were subject to claim by third party creditors.  However in a recent case out of the Third District Court of Appeal, the Court found different language to provide protection from creditors, specifically, from a previous marriage’s child support claim. In that case the parties agreed:

The parties agree that any lien or encumbrances on the marital home not specifically listed in the parties’ Marital Settlement Agreement or Addendum thereto as liens or encumbrances to be paid shall be the sole responsibility of the Husband and shall be paid from his share of the proceeds.  This shall include, but not be limited to, lien(s) from the Husband’s attorney and any loans taken by the Husband except those listed in the Marital Settlement Agreement and Addendums thereto.”

Kerzner v. Kerzner, 36 Fla. L. Weekly D2608 (Fla. 3rd DCA 2011). In Kerzner, the Husband, once the liens were satisfied, intended to reinvest his share of the funds into a new home.  The Court found the lack of the language “any and all outstanding judgments pending against,” from the Myers, case made it distinguishable and Husband’s share was protected from creditors other than creditors of the marital home. 

As previously mentioned, the specific creditor at issue here was his previous Wife claiming past due child support.  This is an important secondary point from this case that even child support claims are unable to collect on Florida Homestead. . 

See, Kerzner v. Kerzner, 36 Fla. L. Weekly D2608 (Fla. 3rd DCA 2011). See also, Myers v. Lehrer, 671 So. 2d 864 (Fla. 4^th DCA 1996). 

Dustin Michael Butler is an Attorney with Martin Law Firm, P.L., whose practice focuses in Family Law and Civil Litigation.  He is admitted to practice law in the State of Florida and the Federal Court for the Middle District of Florida. He primarily practices in Lee County Florida in Cape Coral and Fort Myers, Florida.

The short answer is the spouse vacating the home should usually be given some sort of credit to offset the value of remaining in the home.  Typically, the Court accomplishes this in two ways.  One way is through spousal support, the other is through equitable distribution.  A recent case dealt with this issue through equitable distribution. The court ordered the marital home sold; however, it permitted the husband to remain in the home until it was sold, provided he paid the mortgage, taxes, and other maintenance fees.  The court did not allow the husband any offset in the equitable distribution finding only that it was offset by the fair rental value of the home. The court did not make any findings as to the amount of the fair rental value for the home.

Mortgage and other maintenance expenses do not necessarily equal the fair rental value of the home.  When the court is making a distribution such as this it is necessary for it to determine the fair rental value and make an offset equal to the deficiency or excess of the payments made by the spouse remaining in the home and the fair rental value of the home.

See, Tuomey v. Tuomey, 36 Fla. L. Weekly D2539 (Fla. 5th DCA 2011).

Dustin Michael Butler is an Attorney with Martin Law Firm, P.L., whose practice focuses in Family Law and Civil Litigation.  He is admitted to practice law in the State of Florida and the Federal Court for the Middle District of Florida. He primarily practices in Lee County Florida in Cape Coral and Fort Myers, Florida.

Florida Statute § 61.075 provides for an equitable distribution of marital assets.  Absent findings of fact to support an unequal distribution of assets, the division should be relatively equal.  In many marriages the major, and sometimes only, asset is the marital home.  This often causes problems in equitable distribution because it is not possible to actually divide the home in half.  If the parties do not have other assets equal to the value in the marital home to offset awarding the home to one party it may be necessary to sell the marital home.

Recognizing that the division of marital assets sometimes requires an equalizing payment in excess of the liquid funds available at the time of divorce, Florida Law provides that this payment may be made in installments.  See Fla. Stat. §61.075(10) (2010).  However, in a recent case the trial court awarded the marital home to the husband, attempting to award the wife her share of the assets through installments payments of $300 a month.  At this rate, she would not have received her full share for eighteen (18) years.  The Second District Court of Appeal found this effectively deprived her of her share of the equitable distribution in violation of Florida Law.

It is important to note that the court may justify and unequal distribution as an award of alimony.  However, the court in this case did not make the requisite findings to justify this distribution.

See, Fotinos v. Fotinos, 36 Fla. L. Weekly D2287 (Fla. 2d DCA 2011).

Dustin Michael Butler is an Attorney with Martin Law Firm, P.L., whose practice focuses in Family Law and Civil Litigation.  He is admitted to practice law in the State of Florida and the Federal Court for the Middle District of Florida. He primarily practices in Lee County Florida in Cape Coral and Fort Myers, Florida.