When a couple divorces, there are several things they must work through in order to reach a settlement agreement, including the division of their property. Sometimes, parties may make certain payments contingent on other financial events, like the sale of the marital home. Thus, what happens if the house is put up for sale, but no one buys it? Issues like this highlight just how important it is to negotiate thoroughly and draft carefully any marital settlement agreement that you sign. When it comes to marital settlement agreements, it pays to have an experienced Florida property division attorney on your side.
A recent case involving this type of settlement agreement dispute involved the divorce of Jonathan and Angela. The couple worked out a marital settlement agreement in their divorce case that stated that they agreed to sell their marital home. They later amended the agreement to dictate that the home had a fair market value of $725,000 and an outstanding mortgage of $328,000. They agreed that each spouse was entitled to 50% of the equity in the home, meaning that each spouse was entitled to $198,500.
To accomplish this distribution, the agreement required the wife to sign over her one-half interest in the home to the husband. The husband agreed to pay the wife $80,000 within 10 days and the remaining $118,500 when the sale of the home closed.
This was in 2007. The housing market crash that occurred around that time had a substantially negative impact on many homes, including this one. Six years later, the house still hadn’t sold. The wife went back to court, asking the judge to order the husband to make the $118,500 payment immediately. The husband argued that the agreement did not require him to make the $118,500 payment until he either sold or refinanced the property. The husband testified that he had attempted several time to refinance the mortgage, but he was unsuccessful. At one point, the home’s fair market value was listed at less than $370,000.
The trial court concluded that the husband was not obligated to pay the wife immediately because the deal required a sale or refinance of the property first. The court determined that the husband had been diligent in his efforts to sell or refinance the home but had been unsuccessful. Based upon that evidence and the terms of the agreement, the wife wasn’t entitled to the relief she requested.
The wife won her appeal, however. The court explained that the $198,500 sum was part of the couple’s equitable distribution. The wife agreed to a pair of payments ($80,000 and $118,500) in exchange for giving up her interest in the home. The settlement agreement stated that the two payments were sums “due to the Wife.” In other words, the sale or refinance was not a condition that had to occur before the husband had an obligation to pay, but instead it simply provided a source for the payment. The agreement did not, however, state what would happen if the property didn’t sell or wasn’t refinanced (and that source of funds therefore wasn’t available). For a resolution of that, the appeals court sent the case back to the trial court for additional hearings and receipt of additional evidence.
There are several things you can take away from this couple’s litigation, but perhaps one of the main things is remembering that every term in your marital settlement agreement has the potential to be a monumental provision with a major impact on your life in the future, and it should be negotiated accordingly. Whether you are negotiating a marital settlement agreement or litigating a disputed settlement agreement, reach out to the skilled South Florida equitable distribution attorneys at Sandy T. Fox, P.A. for the diligent representation your case deserves. Our team has been representing people in divorce, equitable distribution, and other family law cases for many years. Contact our attorneys online or by calling (800) 596-0579 to schedule your confidential consultation.
More blog posts:
Equalizing Payments, Marital Home Quit Claim Deeds, Equitable Distribution, and Your Florida Divorce Case, Fort Lauderdale Divorce Lawyer Blog, May 18, 2017
Transferring Homes into Trusts and the Impact on Your Florida Divorce and Equitable Distribution, Fort Lauderdale Divorce Lawyer Blog, Dec. 20, 2016
Photo Credit: ErikaWittlieb, [CC0 License], via Pixabay