How is Rental Property Divided in Tennessee Divorce?

Real estate has been a hot topic over the past several years. Many individuals have reaped the benefit of snapping up rental properties and utilizing them as an asset. But how does divorce affect this? HGTV star Christina Haack recently made headlines when she accused estranged spouse Joshua Hall of diverting thousands of dollars in rental income from her account into a private account in his name. Married couples usually purchase any such rental properties by using their marital funds. So, what does it mean when a couple gets divorced? Who is entitled to the rental property? Is it the person who maintains the property? The one who manages relations with the renters?

Well, the simplified answer is that the division and distribution of rental properties in a divorce will work in a manner substantially similar to that of dividing all other marital property.

Market Value

Both parties will first need to agree on what the fair market value of the property is. Utilizing the services of a non-biased third party is often advisable here. A professional such as a surveyor or home appraiser can assess the market value of a piece of property and give their professional opinion of what the asset is worth. While the parties may agree to what they believe the value of the property to be without engaging with a third-party professional, it is not generally advisable. If one party is insisting on not having a third party involved, you really need to ask yourself why. Having a non-biased third party involved prevents one party from manipulating the other, and is a good way to ensure equitable distribution. The confidence that this brings can help to relieve tensions and pressure on this and property division issue and on the overall property division situation as a whole.

In addition to helping parties to understand the market value of a property, appraisers can help parties determine whether the property is an asset, liability, source of income, or a combination of those things. Determining how the property is valued will help you navigate your way to the best agreement on how the property – or its liquidated value – should be distributed.

Division

Once you come to an understanding of the value of the property, the parties will need to come to an agreement on how to fairly divide it. Often, the rental property will be considered as one piece of the overall estate. The parties will have to agree on how to fairly divide the property as part of the overall estate. Often, one spouse will keep the rental property as a piece of their share of the overall marital estate. For instance, maybe a divorcing couple owns a family home worth $600,000 as well as two rental properties worth $300,000. It may make sense in that scenario for one person to take ownership of the marital home, while the other party takes sole ownership of both rental properties.

Another option is to sell the property and divide the profits. If the parties cannot come to an agreement on how the rental properties should be divided, the judge will exercise their discretion and make the decision for the parties.

Rental Income

The parties will need to manage rental income during the property division process as well. If parties can agree on how to handle this amicably, it will of course help the entire process run more quickly and smoothly. One option is for the parties to agree to put any rental income funds into a separate escrow account. This is where a third party is entrusted with managing the account and the funds will generally be held until after the property division decisions are made and the divorce is final. (With property expenses and the like being taken from those funds).

Contact Fort, Holloway Rogers

Divorce and dividing an estate can be tricky – but you do not have to do it alone. Our experienced Franklin property division attorneys at Fort, Holloway & Rogers can help you navigate the toughest of situations. Contact our team today to begin discussing the details of your own case.

Source:

newsweek.com/entertainment/celebrity-news/christina-hall-accuses-estranged-husband-josh-hall-taking-thousands-her-account-1930367