How Are Property Improvements Handled During A Divorce?
During a divorce, property is distributed based on it being separate or shared property. The marital property is always owned by both the spouses so it is going to be split between the parties in an equal manner. The separate property, also known as non-marital, is just owned by a partner and will go to the owner after the divorce.
One problem with divorces is that there are different laws in different regions. This is why you want to be sure you hire a local specialist like harshbergerlaw.com/divorce-attorney/. However it is quite obvious you will need an attorney. Even so, you do want to learn more about the situation you are in so let’s see what has to be remembered.
Property Improvements – How Are They Handled During The Divorce?
Quite a common situation that appears with divorces is when there is one spouse that made some solo property improvements. As an example, one spouse could have spent some cash to upgrade a marital home’s roof. In such a case we need to ask if the spouse will be reimbursed or not. In order to determine who should receive improvement reimbursements, some factors are considered:
- If the target of the improvement was a property owned by a spouse.
- If the target of the improvement was a separate or shared property before the made improvements.
- If separate funds or community funds were used by the spouse.
What Do Courts Consider When Making A Choice?
Although state laws do vary, the court normally rules based on some pretty simple guidelines.
In the event that there is one spouse that is making an improvement to own property:
- When community funds were utilized, the community will receive a reimbursement.
- When community funds were not used, the other party is not going to collect on property value increase.
In the event that one spouse made improvements to the separate property of the other spouse:
- If separate funds were contributed to improve property owned by the other spouse, reimbursement may be in place.
- When community funds were utilized, there are jurisdictions that see this improvement as being a gift.
In the event that one spouse makes improvements to a shared property, the court normally makes the assumption that the improvement had the purpose of benefiting communal property. Because of this, property is going to be equally distributed among the parties.
Other Factors That Might Be Considered
A difficult point that normally appears when allocating improvement cost is properly determining property value after and before improvements. Expert appraisers are normally consulted in order to make calculations. This is especially the case when it is very difficult to determine the amount that one of the spouses spend while making improvements.
Courts also think about whether or not improvements converted the separate properties into community properties. This is mainly true when a property retains separate property characteristics. Also, there are improvements that are not going to increase property value. Improvement can even decrease property value. For instance, when homeowner association rules are broken, the improvement leads to property value drops.