There used to be a very specific order in which people did things: they got engaged, they got married, they bought a house and then they had a baby. At least that’s what they told us.
Now, people often get engaged, buy a house and then get married (and there might be a baby before or during all of that).
What happens to a house that is bought before marriage and/or during an engagement if the couple eventually get divorced in Florida?
Houses bought before marriage are divided depending on who is on the deed.
If Both Parties Are On The Deed Before Marriage In A Florida Divorce
If both of you are on the deed, a Florida divorce court can (and almost certainly will) treat the house as a marital asset and divide it, even though you bought the house before the wedding.
A deed is “A written instrument by which land is conveyed.” Black’s Law Dictionary (11th ed. 2019).
The deed controls who owns the land. If both parties own the land before the divorce, a Florida divorce court cannot divide the land without dividing the house. All real property is considered unified if both parties are on the deed.
“All real property held by the parties as tenants by the entireties, whether acquired before or during the marriage, is presumed to be a marital asset…” Fla. Stat. Ann. § 61.075 (6)(a)(2) (West).
Under Florida’s equitable distribution framework, a Florida divorce must presume that division of marital assets is equal.
“[I]n distributing the marital assets and liabilities between the parties, the court must begin with the premise that the distribution should be equal…” Fla. Stat. Ann. § 61.075 (1) (West).
Marital assets include “the contribution of each spouse to the acquisition, enhancement, and production of income or the improvement of, or the incurring of liabilities to, both the marital assets and the nonmarital assets of the parties.” Fla. Stat. Ann. § 61.075 (g) (West).
So, the Florida court can also consider the contributions of each spouse to the acquisition and enhancement of the asset and the needs of each spouse after the divorce. Fla. Stat. Ann. § 61.075 (1)(b, g) (West).
To divide the property, the court may order the sale of the property, award one spouse exclusive occupancy in specific circumstances, or spouses may plead for partition (the land is physically divided). Knott v. Knott, 395 So. 3d 1147, 1150 (Fla. Dist. Ct. App. 2024).
If One Party Is Not On The Deed Of A House Bought Before A Marriage In Florida Divorce
If one party is not on the deed to a house purchased before marriage, that house will be considered a non-marital asset awarded exclusively to that party in the event of a divorce. The party not on the deed is probably NOT going to be awarded any portion of that property unless a portion of the house becomes a marital asset. Florida courts can consider contributions made by the spouse who is not on the title.
Marital assets include “the enhancement in value and appreciation of nonmarital assets resulting from the efforts of either party during the marriage or from the contribution to or expenditure thereon of marital funds or other forms of marital assets, or both.” Fla. Stat. Ann. § 61.075 (6)(a)(1)(b) (West).
This includes active appreciation, where a property’s value is increased from direct efforts by the parties, like renovations. These improvements must be significant.
For example, in a dispute about equitable distribution of the home, Former Wife presented evidence of improvements she had made to the home even though the title was in Former Husband’s name. Former Wife had personally fixed the roof, cleaned the gutters, fixed pavers, retiled 500ft of tile, and contributed $75,000 from a personal injury settlement to renovate the home. The court held that this entitled her to equitable distribution of the value of the home. Bernstein v. Bernstein, Not Reported in So. Rptr., 1, 4 (Fla.App. 4 Dist., 2023).
It’s important to note that “improvements or expenditures of marital funds to a nonmarital asset does not transform the entire asset into a marital asset; rather it is only the ‘enhancement in value and appreciation’ which becomes a marital asset.” Strickland v. Strickland, 670 So.2d 142, 143 (Fla. 1st DCA 1996).
When marital funds are used to pay down a mortgage on a premarital home, this commingling of marital and non-marital assets can create a marital interest in the property. Fla. Stat. Ann. § 61.075 (6)(a)(1)(c) (West).
“[P]assive appreciation of the marital home that accrues during the marriage is subject to equitable distribution even though the home itself is a nonmarital asset.” Kaaa v. Kaaa, 58 So. 3d 867, 870 (Fla. 2010)
Finally, a portion of the passive appreciation can be considered marital assets. The court calculates how much of the passive appreciation can be marital by subtracting the value of the property on the date of marriage or acquisition (whichever is later) from the value of the property on the valuation date during the dissolution of marriage. Fla. Stat. Ann. § 61.075 (6)(a)(1)(c)(I) (West).
But, any increases in market value due to “inflation or fortuitous forces,” and not from active improvements, is not calculated. Passive appreciation does not include active appreciation efforts. Straley v. Frank, 612 So.2d 610 (Fla.App. 2 Dist., 1992).
“The total marital portion of the property consists of the marital portion of the passive appreciation, the mortgage principal paid during the marriage from marital funds, and any active appreciation of the property…not to exceed the total net equity in the property at the date of valuation.” Fla. Stat. Ann. § 61.075 (6)(a)(1)(c)(IV) (West).
This marital portion of the property must be divided equitably between the parties, even if one spouse’s name isn’t on the title.
“[T]he mortgage on the home and the home equity line of credit were both paid down by marital funds. Accordingly, any increase in the property’s equity due to these payments is a marital asset subject to equitable distribution.” Nathey v. Nathey, 292 So.3d 483, 485 (Fla.App. 2 Dist., 2020).
If both spouses aren’t contributing marital funds or making improvements, it is unlikely that the spouse who is not on the title can argue for an equitable division. In O’Dell v. O’Dell, the parties maintained separate checking accounts and the husband paid the mortgage while the wife paid for the children’s needs, credit accounts in her name, utilities, and groceries. The court held that the wife had not made significant financial contributions or improvements to claim an equitable division of the marital asset. O’Dell v. O’Dell, 583 So.2d 1087, 1089 (Fla.App. 5 Dist., 1991).
But, liabilities incurred during the marriage, like debt, can be divided too. Fla. Stat. Ann. § 61.075 (6)(a)(1)(a) (West).
If the mortgage against the house gets subsequently refinanced in both parties’ names without putting the deed in both parties’ names, that debt becomes a marital debt.
That marital debt can then be allocated between the parties. Because the property is fixed to the debt… the property can be divided between the parties too.
If the house is deemed to be marital, the allocation of the value of the house can be made by refinancing the property and paying the other spouse their portion of the value, by selling the house, or by reallocating other assets in lieu of one spouse’s share of the house.
A spouse who has the children most of the time will likely get first dibs on keeping the marital property.
“[T]he court shall first determine if it would be in the best interest of the dependent child to remain in the marital home; and, if not, whether other equities would be served by giving any other party exclusive use and possession of the marital home.” Fla. Stat. Ann. § 61.075 (1)(h) (West).
“As a general rule, a trial court should award the primary residential parent exclusive use and possession of the marital residence until the youngest child reaches majority or is emancipated…” Ortiz v. Ortiz, 315 So. 3d 149, 153 (Fla. Dist. Ct. App. 2021), quoting Walker v. Walker, 274 So.3d 1156, 1162 (Fla. 2d DCA 2019).
It is important to remember that courts only perform the analyses above in “any contested dissolution action wherin a stipulation and agreement has not been entered and filed.” Fla. Stat. Ann. § 61.075 (3) (West).
So if you and your spouse had a valid premarital agreement, you must abide by its terms.
For example, in Felice v. Felice, the parties had executed a valid premarital agreement which awarded the husband the marital home as well as “any and all equity…including any enhanced value and appreciation, and that the former wife is not entitled to any interest or equity in the former husband’s home.” Here, even if Former Wife had made significant improvements, she would not have been able to argue for an equitable distribution. Felice v. Felice, 194 So.3d 1037, 1039 (Fla.App. 2 Dist.,2016).
Buying a house is a good thing. Getting engaged is a good thing. Let’s hope it all works out. If not, contact my Naples, Florida family law firm to speak with an experienced Florida divorce attorney.
