Posted by Nydia Streets of Streets Law in Florida Dissolution of Marriage

It is generally understood that property a spouse owns prior to marriage is non-marital property belonging to that spouse. During a marriage, sometimes it becomes necessary for the non-owning spouse to sign mortgage documents related to the non-marital property. A recent appellate case examines how this act affects each spouse’s interest in the non-marital property.

In the case Frederick v. Frederick, 2D17-3668 (Fla. 2018), the former wife appealed a finding that mortgage taken out on the former husband’s non-marital property was a marital debt. There was no dispute the former husband owned a property before marriage which did not have a mortgage at the time the parties got married. Subsequently, the former husband decided to make improvements on the property and sought a mortgage to do so.

The mortgage holder required that the former wife co-sign the mortgage. However, the former wife was not on the deed or the promissory note related to the property. The testimony indicated the former husband used a portion of the mortgage funds to remodel the property, but there was no indication as to where the rest of the funds were spent. In the final judgment, the trial court characterized these mortgage funds as a marital debt to be paid by each spouse.

On appeal, the appellate court reversed this decision, holding it was error to assign the debt as marital. The court reasoned: “Often a lending institution will require a mortgage to be joined by a spouse in order to place a valid lien on the property in favor of the lending institution. The mere act of signing the mortgage, and thereby waving any potential spousal claim in the event of foreclosure, does not impute liability under the note.”

Additionally, as to the trial court’s failure to treat the pay down of the mortgage as a marital asset, the appellate court reversed, holding, “ Here, as in Somasca, the trial court erred in failing to give the Wife a credit for one-half of the $7360.97 of marital funds used to pay down the [former husband’s pre-marital property] mortgage. Although the trial court has discretion to use the date of filing valuation to determine that the property had depreciated in value, the court was not permitted to disregard the equity increase that occurred during the marriage. There is no question that the marital funds in this case were used to pay down the mortgage by $7360.97, resulting in an increase in the value of the Husband's equity in the property. “

If you are facing a similar issue in your Florida divorce case, contact a Miami divorce attorney to help you understand your rights and obligations. A consultation can assist you in learning about your next best steps.