Dividing Rental Properties in a Divorce

Dividing Rental Properties in a Divorce

No one goes into a marriage with the thought of getting a divorce but unfortunately, some marriages do end up in a divorce due to a myriad of reasons. Every state has their own requirements and procedure for the divorce process. If you are facing divorce, then you may have many questions surrounding the process, as well as the requirements and other circumstances that you will need to go through. There are many different elements that must be determined in a divorce, including child custody, child support, alimony, property division, and other assets. Many clients have questions regarding the division of property, specifically rental properties and how they will be divided in a community property state, such as California.

California is considered a community property state, which refers to a married couple that owns or owes together throughout the marriage. Community property is different from property that was owned or owed by one spouse prior to the marriage. In California, all community property is divided 50/50 by the courts if the issue is determined by the judge. 

Any property that was earned or accumulated during the marriage is considered community property and it can include any assets purchased with the money that was earned during the marriage, regardless of which spouse earned the money. Debt is also considered community property if it was accumulated during the marriage. Examples of community property may include homes, rental properties, vacation homes, vehicles, furniture, appliances, mortgages, debt, etc.

Dividing Rental Property in a Divorce in California

The process in which the court determines the property division is based on when a couple acquired the property. For example, if a rental property was owned by one spouse prior to the marriage, then the rental property remains separate property and is not community property. On the other hand, if the rental property was purchased during the marriage, then it is considered community property and is subject to 50/50 division by the court. 

However, there is an exception to this; only if there was a clause in a prenuptial agreement that excluded one party from the joint ownership of the rental property. 

Can Community Rental Property Be Negotiated?

Yes, there are several ways community rental property can be negotiated if both couples agree to a settlement and not leave the decision to a judge. Some examples include:

  • Selling the rental property and splitting the sale profits evenly.
  • Negotiating trades, such as offering something of equal value in exchange for one spouse to have full ownership of the rental property.
  • Keeping the rental property in both names and operating them together, which is only a viable option for divorced couples who can amicably communicate during and after the divorce has been finalized.

Contact Us to Speak With an Experienced Divorce Lawyer

At LLM Family Law, our team has extensive experience in representing clients in complex divorce cases, such as property division in a divorce in California. Our team has the skills, knowledge, and experience to protect your best interests. Contact our team to speak with a trusted divorce lawyer in Los Angeles!

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